Complaint No C03199 [2014] NZREAA 46 (14 February 2014)

Last Updated: 22 November 2014

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

And

In the Matter of Complaint No: C03199

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 14th day of February 2014

Complaints Assessment Committee: CAC20010

Chairperson: Marina Neylon Deputy Chairperson: Alison Wallis Panel Member: Denise Bovaird

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. This is a complaint made by the Complainant against the Licensee. The Licensee is a licensed

Salesperson under the Real Estate Agents Act 2008 (the Act) engaged by the Agency.

1.2. The complaint concerns the conduct of the Licensee in regard to the Complainant’s

prospective purchase of the Property.

1.3. The complaint alleges;

i. That the Property was not “on the market” at the time when the Complainant viewed it with the Licensee. If this allegation is true, the Licensee would be in breach of Rule 9.6 which states that a property cannot be marketed unless the owner authorises this through an agency agreement.

ii. That the Licensee misled the Complainants by stating that she would present their offer

in 2 days and then sold the Property to another party before that time had elapsed. If proven this would be a breach of Rule 6.2 which states that a Licensee must deal fairly with all Parties engaged in a transaction.

iii. That the Licensee failed to act in the best interests of the Vendor (client) in that she did

not gain the best offer for the Property. If proven, this would be a breach of Rule 9.1 which states that Licensees must act in the best interest of the client and in accordance with the client’s instructions.

1.3 The outcome sought by the Complainant is that the unconditional offer for the Property be declared invalid and that the Licensee pays compensation to the Complainant for his time and other costs.

1.4 The Committee notes at the outset that the Complainants preferred outcomes are not available under the Act, however, this has not affected our investigation of the complaint.

2. Material Facts

2.1. The Property comprises 3 x 2 bedroom units and a 3 bedroom house on 1147m2 land. The Owner (Mr R) listed the Property with the Agency on 10 July 2013. The listing salesperson was the Licensee. A copy of the listing agreement has been submitted in evidence.

2.2. Mr R occupied one of the units, another was vacant and the two remaining units were tenanted.

2.3. The Complainant and his wife (Mrs Z) viewed the Property with the Licensee at 12pm on 22

July 2013. Another group of Buyers was also present at this viewing. The Complainant and the other Buyers both showed interest in buying the Property.

2.4. The Licensee emailed a copy of a sale and purchase agreement, multi offer form, sales statistics and the certificate of title to the Complainant on that afternoon.

2.5. The Complainant picked up a blank sale and purchase form from the Agency office at around

5pm on 22 July.

2.6. At 8pm, the Licensee presented an unconditional offer from another Buyer (Ms J) for $1.85 million to Mr R. which was accepted.

2.7. The Complainant contacted the Licensee at approximately 9pm to confirm that he had an offer to present. At that point, the Licensee told the Complainant that the Property had just been sold.

2.8. The Complainant visited Mr R at the Property on 23 July stating that he had made a conditional offer of $1.91 million which the Licensee had failed to present and complaining about the conduct of the Licensee.

2.9. The Complainant contacted the Authority with his concerns about the Licensees conduct and completed a complaint form on 24 July 2013.

2.10. The Licensee submits that the Complainant and his wife threatened to shoot her over the incident and she was advised by her Manager to go to the Police. The Licensee did contact Police who advised the Licensee to take out a trespass order against the Complainant.

2.11. On 1 August 2013 a security company attempted to serve a trespass notice on the Complainant who was away on business. The Complainant’s wife became upset by this and the Complainant contacted the Agency by email on 6 August to complain that the trespass notice was an unacceptable response to his concerns.

2.12. On 7 August 2013 the Authority contacted the Licensee to inform her that a complaint had been made against her by the Complainant. On the same day the security company served the trespass notice on the Complainant. The Complainant denies threatening the Licensee in any way.

3. Relevant Provisions

Real Estate Agents Act 2008

S72 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.

Professional Conduct and Client Care Rules 2012

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

Rule 9.1 A Licensee must act in the best interest of a client and act in accordance with

the client’s instructions unless to do so would be contrary to law.

Rule 9.6 Unless authorised by a client, through an agency agreement, a Licensee must not offer or market any land or business, including by putting details on any website or by placing a sign on the property.

4. Discussion

4.1. The Committee has carefully investigated and considered all the matters raised by the Complainant. In order to making a finding of unsatisfactory conduct against the Licensee, the Committee must be satisfied that the evidence before us has proven, on the balance of probabilities, that the Licensee has breached the Act or the Rules.

4.2. In relation to the first allegation that the Property was not on the market at the time the Complainant went to view it, it appears to the Committee that there has been a misunderstanding by the Complainant.

4.3. The Licensee and her client, Mr R, state that the Property was officially listed in July but that the Licensee knew that the property was available for sale since late 2012. The Property had not been actively marketed during that time because of the difficulty in gaining access to all 4 units.

4.4. The Committee accepts that what the Licensee intended to convey to the Complainant was that the Property had not been actively marketed. The Complainant misunderstood the phrase “on the market” to mean that the Property was not under an agency. The evidence clearly shows that the Property was under an agency agreement at the time the Complainant viewed it.

4.5. There is also a completely differing view of events between the parties in relation to the viewing and as to the time that the Licensee intended to present offers to the owner, Mr R.

4.6. The Complainant submits that on 20 July Mrs Z called the Licensee about another property that the Licensee was marketing. The Licensee recommended that the Complainant and his wife consider the Property. The Complainant submits that the Licensee intimated that the Property had not “been on the market” and that the owner wanted between $1.8 and $1.9 million which was a very “good bargain” and the Complainant “could make money and even resell it right away”. The Complainant agreed to view on Sunday at 3pm but did not keep the appointment.

4.7. Another appointment was scheduled for 12pm on Monday 22 July as the Licensee had arranged to show another group of Buyers whom she described to the Complainant as “a friend of a friend”. These Buyers told the Licensee in front of the Complainant that they wished to make an offer. The Complainant and the Licensee then arranged for the paperwork to be emailed over that afternoon so that the Complainant could also make an offer.

4.8. The Complainant stated that his understanding was that the Licensee would not present the offers until 23 July. The Committee notes that this is a 24 hour period, whereas earlier, the Complainant refers to a 2 day period for making his offer. This inconsistency sways the Committee towards the Licensee’s version of events. The Complainant and his wife spent the

afternoon and early evening doing research and completing their offer.

4.9. When the Complainant telephoned the Licensee at around 9pm on the evening of 22 July, she told him that the Property had already been sold. The Complainant states that “we were so upset and felt we had been cheated”. The Complainant went to see the seller in person the next day to try to get his offer accepted.

4.10. The Licensee has quite a different version of events. She submits that during the viewing, the Complainant and his wife did not seem very interested in the Property. They complained about the condition of the units that they could view and that they were concerned that the other two units could not be seen until after they had made an offer.

4.11. The Licensee submits that the Complainant wanted to purchase the units below the $1.8 million guide price and that the Complainant suggested that the Licensee cut the Agency out of the deal and that he (the Complainant) would pay her. The Licensee states that she refused his suggestion and said that the owner wanted more than $1.8 million.

4.12. The Licensee submits that she made it clear to the Complainant that she would present any offers received at 8pm on 22 July. When she had not received the Complainant’s offer by that time she assumed that he did not want to make an offer.

4.13. It seems unlikely to the Committee that the Licensee would want to lose the opportunity of second offer if she knew she could gain one. It would double her chance of a commission and there is no evidence to suggest that there was any reason for favouritism for the Eventual Purchaser. The Complainant’s argument that the Eventual Purchaser was a friend of the Licensee has no evidential support.

4.14. The Committee has insufficient evidence to conclude which version of events is correct. It is possible that the Complainant gave the impression that he was only interested in the Property if he could gain it for the right price, that being under $1.8 million. It is also possible that the Licensee was unclear about when she would present the offers. In either case the Committee has concluded that we have insufficient evidence to find that the Licensee’s conduct has met the threshold for unsatisfactory conduct.

4.15. The Committee notes that the Complaint was extremely upset when he found out that he had missed out on the opportunity to buy the Property. The fact that the Complainant went to visit the seller, directly indicates this.

4.16. The Seller has given evidence that he was happy with the offer he received and that he trusted the Licensee. As the Complainant went to the Seller with a conditional offer of

$600,000 more for the Property, the Committee finds the evidence provided to us by Mr R to

be very helpful. The Committee cannot find against the Licensee for breaching Rule 9.1 if the client is satisfied with the service and submits that he would not have accepted the conditional offer despite the higher price.

4.17. The allegations by the Licensee that threats were made against her life by the Complainant and his wife have shocked and disturbed the Committee. The idea that any real estate transaction should cause such a depth of feeling and animosity is truly worrying. The Complainant denies the threats were made, and the Committee is satisfied that the Police advice in this situation has been appropriate.

4.18. The Committee has determined that the issues raised by the Complainant do not reach the threshold for unsatisfactory conduct and we have determined to take no further action on the complaint.

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)(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 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. Any application for an order preventing publication must be made to the Real Estate Agents Disciplinary Tribunal (the Tribunal).

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

Marina Neylon

Chairperson

Complaints Assessment Committee

Real Estate Agents Authority

Date: 14 February 2014