Complaint No C03018 [2014] NZREAA 49 (18 February 2014)

Last Updated: 23 November 2014

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

And

In the Matter of Complaint No: C03018

In the Matter of Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 18th 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 Complainants against the Licensee. The Licensee is a licensed

Salesperson under the Real Estate Agents Act 2008 engaged by the Company.

1.2. The complaint concerns the conduct of the Licensee in her dealings with the Complainants. The Licensee assisted the Complainants to purchase Property 1. The Licensee also listed the Complainants property for sale at Property 2.

1.3. The Complainants state that when they needed to arrange a building inspection, the Licensee

“recommended one particular Building Inspector, Mr G. He carried out our inspection on Property

1 and it was grossly inadequate”.

1.4. The Complainants also allege that the Licensee was not working in their best interest when she listed Property 2. They cite two specific matters which gave them this impression. Firstly, in relation to the initial appraisal, the Complainants say that the Licensee recommended a price in the high $200,000’s which was well below their expectations. Secondly, the Complainants state that the Licensee tried to persuade the Complainants to accept a low offer from a Purchaser who was a licensed real estate person.

1.5. There is no specific outcome sought by the Complainants.

2. Material Facts

2.1. In March 2013 the Complainants entered into an agreement to purchase Property 1 through the Licensee. The agreement had a number of conditions including a Building Inspection Report and the unconditional sale of Property 2.

2.2. The Complainants asked the Licensee if she knew a builder who could complete the building report for them. The Licensee supplied the Complainants with contact details for Mr G. Mr G carried out the building inspection which the Complainants subsequently approved.

2.3. The Complainants listed Property 2 with the Licensee on 21 March 2013. The listing authority sets out an appraisal range of between $330,000 and $365,000 but is not supported by comparable sales data. The listing authority is not signed by one of the Complainants.

2.4. Property 2 was listed as negotiable over $355,000. The Licensee introduced Potential Buyers, Ms M and Mr R, to Property 2. Ms M is the holder of a real estate salespersons license. The Buyers made an initial offer of $340,000 which was conditional upon a LIM, Building Report and finance. The Complainants refused $340,000 and counter offered at $360,000 which the Buyers accepted.

2.5. A valuation of Property 2 was completed for the Buyers. The valuation was required by the Buyers’ Bank and was not a requirement of section 134 of the Act. Ms M did not need to comply with this as neither she, nor her company were receiving any part of the commission for the sale.

2.6. The sale and purchase agreements became unconditional and proceeded to settlement. The Complainants moved into Property 1 and found that there were five containers in the roof space to deal with leaks as well as illegal wiring around beams.

2.7. The Complainants took Mr G, the Building Inspector, to the Disputes Tribunal and were awarded

$9,000 in damages.

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 5.1 A Licensee must exercise skill, care, competence and diligence at all times when carrying out real estate agency work.

Rule 6.1 A Licensee must comply with fiduciary obligations to the Licensee’s client.

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

Rule 10.10 A Licensee must submit to the client all offers concerning the grant, sale, or other disposal of any land or business, provided that such offers are in writing.

4. Discussion

4.1. The Committee has carefully investigated and considered all the matters raised by the Complainants. 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. The Committee first considered the allegation that the Licensee did not act in good faith by passing on the details of the Building Inspector, Mr G. The Licensee stated that she did give the Complainants Mr G’s card but took no responsibility for the quality of his work. The Complainants stated to our Investigator on 9 October that they could not be absolutely sure that the Licensee had recommended Mr G or just stated that he was a Building Inspector. In either case it would have been prudent, for the Licensee to either provide more choices for the

Complainants, or to provide no help at all.

4.3. The Committee is satisfied that, although the outcome was unsatisfactory, the Licensee was attempting to assist the Complainants and did not receive any form of referral fee or benefit from having done so. In such circumstances the Licensee is not responsible for the quality of service provided by Mr G.

4.4. In relation to the allegation about poor service, the Committee found no conclusive evidence that the Licensee performed her duties to the Complainants either as Prospective Customers, or as her Clients, at a level that would be considered beneath that required by Rule 5.1.

4.5. The market appraisal and the advertised price appear to be inconsistent with the Complainant’s allegations that the Licensee advised them that Property 2 was valued in the “high two hundreds”. This part of the complaint is therefore dismissed.

4.6. The Committee is also satisfied that the Licensee did not favour the interests of the Potential Buyers of Property 2 over the interests of Complainants. The Complainants appear to believe that the Licensee should not have presented the offer that was below their guide price. However, the Licensee had a duty to present all written offers to her clients. The offer made by the Buyers was obviously a lot less than the Complainants wanted. It then became the Licensee’s duty to gain the best result she could for the Complainants. A counter offer was made and accepted by the Buyers. It is unclear to the Committee why the Complainants felt that the Licensee favoured the Buyers as no clear conduct has been identified other than the initial offer price being too low.

4.7. 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: 18 February 2014