Kurosz-Boyes - Complaint No C04473 [2014] NZREAA 331 (16 December 2014)

Last Updated: 7 July 2015

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

And

In the Matter of Complaint No: C04473

In the Matter of Robert Kurosz-Boyes

License Number: 10015689

Decision of Complaints Assessment Committee

Dated this 16th day of December 2014

Complaints Assessment Committee: CAC302

Chairperson: Alison Wallis

Deputy Chairperson: Deborah Clapshaw

Panel Member: Sue Matehaere-Patten

Complaints Assessment Committee

Decision finding unsatisfactory conduct

1. The Complaint

1.1 This is a complaint made by the Complainants against Robert Kurosz-Boyes (the Licensee).

1.2 The Licensee is a licensed real estate salesperson under the Real Estate Agents Act 2008 (the Act)

who is employed by Advantage Realty Ltd, Papamoa, trading as Harcourts Ltd, (the Agency).

1.3 The complaint concerns the conduct of the License in relation to the sale and purchase of the

Property.

1.4 The Complainants allege that the Licensee misled them in regards to the price the previous owners had paid for the Property, giving the impression the Complainants were receiving a better deal than they were actually getting, when compared to their offer.

2. Material Facts

2.1 On 21 June 2013, the Complainants were looking to buy a property, in the $300,000 - $400,000 price range and were working with the Licensee to find suitable properties.

2.2 After looking at property in this price range, the Licensee then suggested they look at the Property, as, although it was higher in price, it offered a sea view, a full site and the v endors were very keen to sell.

2.3 The Complainants asked the Licensee what they thought the Property would sell for and he responded by saying “in between the late $600,000s and the early $700,000.” The Licensee added that this would be very good value as the current owners paid $880,000 for the Property when they purchased it in 2006.

2.4 The Complainants arranged for a viewing the next day, and decided it would be good buying if they could buy it for $180,000 less than what the owners paid for it.

2.5 The father of one of the Complainants was also present at this second viewing and advised the Committee’s investigator, that the Licensee said on about two occasions during this visit that the previous owners had paid $860,000 for the Property. This was confirmed by the brother of one of the Complainants who was also present at this visit.

2.6 It was agreed the Property would need a new roof, new carpet and generally “needed a bit doing to it.”

2.7 On 5 July 2013, the Complainants entered into an agreement for sale and purchase for the Property.

The initial offer of $630,000 was negotiated upward and a price eventually agreed by all parties of

$715,000. Throughout the negotiation, the Licensee reiterated that the vendors were hurting as they were looking at losing $160,000 based at a purchase price of around $700,000.

2.8 The Complainants proceeded to discuss the proposition with their solicitor and the bank who both agreed it was a good buy, based on the information given.

2.9 A valuation was commissioned by the Complainants. This showed the value to be $720,000.

2.10 On or around that time, a friend of the Complainants gave them a property report, which showed the sale in 2006 recorded as $780,000.

2.11 The Complainants drew this to the attention of the Licensee and asked why he has misled them on the vendors’ purchase price. He responded that if they were not happy with the purchase, they could pull out.

2.12 In her statement on 13 March 2014, the vendor stated that she has no recollection of telling the Licensee what she had paid for the Property, but that the sale price was available on several online property information websites.

3. Relevant Provisions

3.1 The Committee has considered s72 of the Act which provides for unsatisfactory conduct and provides as follows:

Section 72 Unsatisfactory conduct

For the purposes 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 Real Estate Agents Act (professional conduct and Client Care) Rules 2012 (the Rules) set out the standard of conduct and client care that agents, Branch Managers and salespersons (licensees) are required to meet when carrying out real estate agency work and dealing with clients. Whilst these rules are not meant to be an exhaustive list, they set minimum standards that licensees must observe and a reference point for discipline.

In relation to this complaint, the following rules may apply:

• Rule 5.1 (standards of professional competence)

• Rule 6.4 (standards of professional conduct)

4. Discussion

4.1 To make a finding of unsatisfactory conduct against the Licensee, the Committee must be satisfied on the balance of probabilities that a breach of the Act or the Rules has occurred.

4.2 The Licensee in his phone conversation with the Committee’s investigator stated he "said something along the lines of I think they bought it for $880,000....I do not ever recall ever actually mentioning that figure of $880,000 again.”

4.3 He stated that lots of figures were discussed when dealing with the Complainants, and does not recall saying the figure but may have.

4.4 He advised he did not obtain the sales statistics before quoting them.

4.5 He disputes what the Complainants are saying as there are two different figures being quoted,

$860,000 and $880,000.

4.6 The Licensee also stated that the price was dropped only in recognition of the roof repair which was needed.

4.7 In order to comply with 5.1 of the REAA Professional Conduct and Client Care Rules 2012, a licensee must “exercise skill, care, competence and diligence at all times when carrying out real estate agency work.”

4.8 It is evident that the Licensee did not comply with this Rule prior to discussing the price the vendors had paid for this Property. He had not taken steps to check the information, and was careless in making such statements when a competent licensee would be fully aware of the likelihood of the statements being relied upon.

4.9 Although the evidence is in dispute to a slight degree, the Committee prefers the evidence of the Complainants because it is supported by several members of the Complainants family. Despite the question of what exactly the figure mentioned was, it appears clear to the Committee that statements about price were made reflecting a price paid by the vendors well above what was actually paid.

4.10 Furthermore, in order to comply with 6.4 of the REAA Professional Conduct and Client Care Rules

2012, a licensee must “not mislead a customer or client, nor provide false information....”

4.11 It is evident that the Licensee also did not comply with this Rule prior to discussing the price the vendors had paid for this Property. In fact, by disclosing an incorrect prior sale price, he misled the Complainants in relation to the perceived value offered by the low sale price they had negotiated.

5. Decision

5.1 After conducting an inquiry 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)(b) of the Act that it has been proved, on the balance of probabilities that Robert Kurosz-Boyes has engaged in unsatisfactory conduct.

6. Orders

6.1 The Committee will conduct a separate hearing on the papers to decide what orders, if any, should be made under section 93 of the Act.

Section 93 provides:

Section 93 Power of Committee to make orders

(1) If a Committee makes a determination under section 89(2)(b), the Committee may do one or more of the following:

(a) make an order censuring or reprimanding the licensee;

(b) order that all or some of the terms of an agreed settlement between the licensee and the complainant are to have effect, by consent, as all or part of a final determination of the complaint;

(c) order that the licensee apologise to the complainant; (d) order that the licensee undergo training or education;

(e) order the licensee to reduce, cancel, or refund fees charged for work where that work is the subject of the complaint;

(f) order the licensee:

(i) to rectify, at his or her or its own expense, any error or omission; or

(ii) where it is not practicable to rectify the error or omission, to take steps to provide, at his or her or its own expense, relief, in whole or in part, from the consequences of the error or omission;

(g) order the licensee to pay to the Authority a fine not exceeding $10,000 in the case of an individual or $20,000 in the case of a company;

(h) order the licensee, or the agent for whom the person complained about

works, to make his or her business available for inspection or take advice in relation to management from persons specified in the order;

(i) order the licensee to pay the complainant any costs or expenses incurred in respect of the inquiry, investigation, or hearing by the Committee.

(2) An order under this section may be made on and subject to any terms and conditions that the Committee thinks fit.

6.2 The Committee requires the Case Manager to obtain a record of any previous disciplinary decision in respect of the Licensee under either the Real Estate Agents Act 1976 or the Act, if any such decision exists, and provide it to the Committee, the Licensee and the Complainant.

6.3 The Licensee and the Complainant may file submissions on what orders, if any should be made. The Complainant may file submissions within 10 working days from the date of the decision. These submissions, if any, will then be provided to the Licensee, with a timeframe for filing final submissions.

7. Publication

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

7.2 The Committee has deferred making any decision on publication until its hearing to decide what orders, if any, should be made.

8. Right of Appeal

8.1 A person affected by a determination of a Complaints Assessment Committee may appeal by way of written notice to the Real Estate Agents Disciplinary Tribunal (the Tribunal) against a determination of the Committee and must do so within 20 working days from the date of the determination.

8.2 The Committee has yet to finally determine this complaint because the parties are being given an opportunity to make submissions on orders before the Committee determines what orders should be made, if any.

8.3 The Committee considers that the 20 working day appeal period does not commence until it has finally determined this complaint by deciding what orders should be made, if any.

8.4 Appeal is by way of written notice to the Tribunal. Further information on filing an appeal is available by referring to the Guide to Filing an Appeal at www.justice.govt.nz/tribunals.

Signed

Sue Matehaere - Patten

Complaints Assessment Committee

Real Estate Agents Authority

Date: 16 December 2014