Complaint No C04201 [2014] NZREAA 284 (2 October 2014)

Last Updated: 3 April 2015

In the Matter of Part 4 of the Real Estate Agents Act 2008

And

In the Matter of Complaint No: C04201

In the Matter of Licensee One

License Number: XXXXXXXX

Licensee Two

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 2nd day of October 2014

Complaints Assessment Committee: CAC307

Chairperson: Miles Maitland Deputy Chairperson: Graham Rossiter Panel Member: Jane Parker

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 The Complainants wished to sell their residential property (the Property) and engaged a suitable Agency to do this following a personal recommendation. Following the subsequent settlement of the Property, the Complainants wrote an eight page letter to the sales manager at the Agency detailing their many concerns.

1.2 A meeting at the Agency resulted in an “offer” of $2,500 being made to compensate for “time and costs in regards to the spa pool”. This offer was declined, with the Complainants stating that, as the offer was neither fair nor reasonable, they would seek judgment from the REAA. The Agency increased their offer to $3,500. This was also declined.

1.3 The Complainants have identified nine issues that concern them. We have identified the main issues as:

(a) the Property being left unsecured following an inspection

(b) the spa pool being included in the list of chattels as being in working order, instead of being “as is –where is”

(c) failing to secure the deposit

(d) failing to advertise the Property for five weeks during the marketing programme

(e) there were some other “concerns” raised. These for the most part were completely beyond the control of the Licensee, so cannot correctly be part of this investigation.

1.4 The Complainants are looking for a refund of fees paid of $12,000, indicating they will pursue this through the Disputes Tribunal if necessary.

2. Material Facts

2.1 The Complainants appear to have been happy with the work done by Licensee One, and state in their complaint that it was...”only when Licensee Two took over that it went pear shaped”.

2.2 This Committee understands that selling a home can be a tiring and stressful affair for most, if not all, vendors, and that is one of the reasons that most people hire the services of salespeople, with appropriate levels of skill and ability. That said, it is almost inevitable that unexpected things might happen that can be some cause for concern to anxious and stressed vendors. That appears to this Committee to have been the case here, resulting in a request by the Complainants for “compensation”.

2.3 All licensees who were involved in the various aspects of this Property transaction have been given the opportunity to address the Complainants’ concerns. This Committee has considered a large volume of evidence and submissions from the parties. We are satisfied, as best we can be, that whilst there may have been a degree of possible misunderstanding on the Complainants’ part, had they chosen to raise their concerns at the time the events in question occurred then there may have been no complaint.

3. Relevant Provisions

3.1 The Committee has considered the provisions of the Act, set out below:

Section 72 Unsatisfactory conduct

For the purpose of this Act, a licensee is guilty of unsatisfactory conduct if the licensee carries out real estate agency work that –

(a) falls short of the standard that a reasonable member of the public is entitled to expect from a reasonably competent licensee; or

(b) contravenes a provision of this Act or of any regulations or rules made under this Act; or

(c) is incompetent or negligent; or

(d) would reasonably be regarded by agents of good standing as being unacceptable.

3.2 The Committee considered whether Rules 6.2 and 6.3 of the Real Estate Agents Act

(Professional Conduct and Client Care) Rules 2009 (the Rules) had been breached.

Rule 6.2 A licensee must act in good faith and deal fairly with all parties engaged in a transaction.

Rule 6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.

4. Discussion

4.1 Both Licensees have stated that their normal policy is for agents to leave a property exactly as they find it, unless very clear instructions are given to the contrary. Licensee Two, on the one occasion that they visited the subject Property with a potential buyer, found it insecure upon arrival, with the windows open and the alarm switched off. It was believed that the vendor was probably close- by at a nearby neighbour’s house, waiting for the agent to finish her inspection and leave the Property. The Licensee left the Property, on her departure, exactly the way she found it. We can find no fault with this action. It appears to be consistent with the appropriate industry standard.

4.2 A spa pool was included in the Sale and Purchase Agreement as a chattel, and initialed by the parties. A clause was added acknowledging that the spa was not compliant with local council requirements as it was unable to be locked. This clause was also initialed by the parties. We are aware that prior to settlement and possession the vendors spent a little time ensuring that the spa was, in fact, compliant and also in good working order. The Agency firm, after a meeting with the Complainants, offered, as a “goodwill gesture for any possible stress and anguish,” the sum of

$3,500, which we note was declined by the Complainants.

4.3 A real estate agent has a duty of care to collect a deposit. Buyers can be somewhat tardy in their obligations in this regard for a variety of reasons, frequently citing the acts or omissions of other parties. This Committee has carefully assessed all aspects of the events relating to the attempts to collect the deposit, and cannot find fault or error by the Licensees involved. It was their duty to do their best to collect a deposit. They did that.

4.4 No real estate agency likes spending money unnecessarily on advertising and it appears to be standard practice to suspend most if not all print media advertising once a property goes under offer. This generally results in cash saving for a vendor who has probably funded most if not all of such a programme. We understand that when the initial offer was received, the advertising was suspended. When this offer failed, a second offer came in directly behind it. There was no need for the Agency to recommence advertising in this instance as the second offer subsequently became unconditional. We would assume that if there is a credit due to the Complainants, it would by now have been paid out to them. Again, we can find no fault with the Agency’s actions.

4.5 The other issues raised are:

a) Being advised not to seek legal advice before signing a contract. The Licensee strongly denies this assertion which we assume relates to a meeting on the evening of 29 April

2013. There is a ‘warning’ statement (in very large print) on the Agreement for Sale and Purchase about the parties obtaining professional advice prior to signing. Because there had been a prior agreement on very similar terms, we can only assume that the Complainants were fully aware of what they were signing for and needed no further legal advice.

b) Failure to provide necessary documents in a reasonable time frame. We assume this relates to the Builder’s Report that was requested be made available. Such a report is the property of the purchaser and he or she is under no obligation to supply such a document to any other party. We note that Licensee One did ask for the report to be made available, but this was not readily forthcoming. No fault or blame can be levelled on the Licensee for this.

c) Deposit taken against Complainant’s instructions. The Licensee did what they are required to do – to remind the purchaser of their obligations to pay the deposit as soon as was possible and in terms of the contract they had signed. We can find no fault with the process that was followed.

d) Not acting in the vendor’s best interests. We have no evidence at all to support this contention.

4.6 In summary and conclusion, the Licensees have acted appropriately and appear to have given an appropriate level of service resulting in a successful sale. They, and the Agency, are entitled to their fee for the work performed under the terms of the listing agreement.

5. Decision

5.1 After conducting an enquiry into the complaint, pursuant to section 89(1) of the Real Estate Agents Act 2008 (the Act), the Committee held a hearing with regard to that complaint. In accordance with section 90(1) of the Act, the committee conducted the hearing on the papers, and pursuant to section 90(2) the Committee’s determination was made on the basis of the written material before it.

5.2 The Committee has determined under section 89(2)(c) of the Act to take no further action with regard to the complaint or any issue involved in the complaint.

6. Publication

6.1 One of the Committee’s functions pursuant to section 78(h) of the Act is to publish its decisions.

6.2 Publication gives effect to the purpose of the Act of ensuring that the disciplinary process remains transparent, independent and effective. The Committee also regards publication of this decision as desirable for the purposes of setting standards and that it is in the public interest that the decision be published.

6.3 The Committee directs publication of its decision, but omitting the names and identifying details of the Complainant (including the address of the Property), the Licensee and any third parties in the publication of its decision.

6.4 The Authority will publish the Committee’s decision after the period for filing an appeal has ended unless an application for an order preventing publication has been made to the Real Estate Agents Disciplinary Tribunal (Tribunal). Such an application can only be made as part of an appeal to that Tribunal. In order to ensure publication of the decision does not take place it is important that you serve a copy of your application on the Authority. Publication of the decision will not take place until the Tribunal has made a decision on the application.

7. Right of Appeal

7.1 A person affected by a determination of a Committee may appeal to the Tribunal against a determination of the Committee within 20 working days after the date of this notice.

7.2 Appeal is by way of written notice to the Tribunal. You should include a copy of this Notice with your Appeal.

7.3 Further information on filing an appeal is available by referring to the Guide to Filing an Appeal

at www.justice.govt.nz/tribunals.

Signed

Graham Rossiter

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 02 October 2014