Complaint No C07076 [2015] NZREAA 165 (22 June 2015)

Last Updated: 8 March 2016

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

And

In the Matter of Complaint No: C07076

In the Matter of The Licensee

License Number: XXXXXXXX

The Agency

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 22nd day of June 2015

Complaints Assessment Committee: CAC 407

Chairperson: Nigel Dunlop Deputy Chairperson: Marjorie Noble Panel Member: Rex Hadley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 20 January 2015 the Real Estate Agents Authority (the Authority) received a complaint against the Licensee and the Agency from the Complainant.

1.2. The Licensee is a licensed salesperson under the Real Estate Agents Act 2008 (the Act). The Agency is a company agent under the Act.

1.3. The complaint relates to a property (the Property).

1.4. The details of the complaint are that:

• Issue One: The Licensee made false statements about some of the chattels and fixtures in the

Property in an attempt to encourage the Complainant to offer a higher price.

• Issue Two: The Agency failed to adequately supervise the Licensee during the course of the transaction.
  

1.5. In particular, the Complainant alleged that:

(a) the Licensee claimed the vendor had re-done the kitchen and re-laid the kitchen vinyl;

(b) the log burner had been installed by the vendor;

(c) the Licensee used bullying tactics;

(d) the Licensee did not recognize or adhere to clearly set boundaries;

(e) did not allow the Complainant to view the south side of the house;

(f) there were issues with the LIM report, the electrical inspection, the building inspection;

(g) only one name was provided by the Licensee to prepare a building report;

(h) the Licensee ignored requests to only communicate through the Complainant’s lawyer;

(i) there was a leaky flue which she was not informed of;

(j) there was an issue with insurance.

1.6. The Complainant requested a remedy being that:

• The Licensee and the Agency be censured so that other buyers may not be disadvantaged by them.
  

1.7. The Licensee responded to the complaint against her.

1.8. In particular, the Licensee commented that she accepts that disclosures relating to the leaky flue of the fireplace were not provided to the Complainant during the course of the transaction.

1.9. The Licensee also accepts that initial information relayed to the Complainant in regards to the age of the log fire was incorrect, and that upon further investigation the correct age was established and provided to the Complainant at the earliest opportunity.

1.10. The Licensee denied that she did not allow the Complainant or her sister to view the south side of the house, or that she used bullying tactics with the Complainant.

1.11. The Licensee acknowledged that she did receive instructions to only communicate through the Complainant’s lawyer but that at times it was necessary to communicate briefly with the Complainant prior to settlement.

1.12. The Agency responded to the complaint against it.

1.13. The Agency said that the Licensee was managed and effectively supervised during the transaction with the Complainant.

1.14. The Agency said it is standard procedure for licensees, when asked by prospective purchasers to recommend other professionals, such as building inspectors, to provide a number of names for them to choose from. The prospective purchasers, not the licensees, engage the professionals.

1.15. The Agency noted in their evidence that at no time did the Complainant make contact to voice any concerns in regards to the Licensee, the transaction, or the Agency.

1.16. The Agency accepted that disclosure of the leaking flue was not passed onto the Complainant having been overlooked. The Agency accepts responsibility for this and has offered to rectify the issue at their cost.

2. What we decided

2.1. On 2 February 2015 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it.

2.2. On 27 May 2015 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

2.3. The Committee has decided to take no further action on the complaint.

2.4. This decision was made under section 89(2)(c) of the Act. The decision was also made with reference to the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012.

3. Our reasons for the decision

3.1. The Committee’s reasons fall within the following issues:

1) Incorrect information;

2) Leaking flue;

3) Not recognizing or adhering to boundaries;

4) LIM reports and electrical and building inspections and insurance issues;

5) Bullying tactics used by the Licensee;

6) Adequate supervision of the Licensee by the Agency;

Reason One: Incorrect information corrected

3.2. One of the key points of this complaint is the Licensee making blatantly false statements. The Committee after consideration of all the evidence before it, found that while there had been some errors made in the initial information given to the Complainant, this was not intentional on the part of the Licensee and was corrected during the due diligence period therefore causing no effect on the decision making of the Complainant.

Reason Two: Leaking flue

3.3. There was an omission by the Licensee to ensure that the disclosure made by the vendors in regards to the flue was passed to the Complainant to consider. However the flue was noted in the builder’s report obtained by the Complainant as having suffered a leak and would need some attention at the next redecoration of the Property. This advice in the report means that the Complainant did not make her decision to become unconditional without having information on the flue.

Reason Three: Not Adhering to Boundaries

3.4. This part of the Complaint refers to the request by the Complainant to make all contact through her Lawyer which the Licensee agreed to. The Committee when considering the evidence found that the Licensee continued to make contact directly to the Complainant for the purpose of making appointments and arranging meetings which if pursued through the Complainant’s lawyer would have led to delays and extra costs impacting on the Complainant. The Committee notes that regular, timely communication is an obligation on the part of the Licensee and that in this case the direct communication to the Complainant was brief and purposeful and in fact allowed the transaction to progress and in the Committee’s opinion did not constitute an annoyance.

Reason Four: LIM reports and building and electrical reports and insurance

3.5. The Committee had evidence from the Complainant that she was only given one referral for a building report. It is noted that the evidence suggests that the builder was visiting the Agency on another matter at the same time as the Complainant. The builder said the Complainant having met him in the office approached him later that day to complete the inspection and report. The Complainant had time to consider who she would use for this report. It is not for the Committee to comment of the standard of this report as the Complainant notes there were issues with the log burner which the inspection did not pick up.

3.6. The evidence from the Agency is that it is normal procedure for them to supply several choices if possible in their referrals for these services, and the Committee found it unlikely that this procedure would have been deviated from in this case.

3.7. The Licensee said that she suggested to the Complainant to speak to the building inspector to establish whether the report would include a partial LIM. The Licensee also in her evidence stated that she advised the Complainant to have her Christchurch property become unconditional before she commenced the inspections on the Property she was purchasing to avoid the costs of these inspections if her own property in Christchurch did not sell which was one of the conditions of the purchase. This in the Committee’s opinion was helpful advice from the Licensee which may have been misunderstood by the Complainant.

3.8. The Complainant was concerned that when she informed the Licensee of a potential problem in gaining insurance due to some issues with the wiring of the Property, the Licensee suggested changing her insurer to another company. The Committee found that the Licensee had suggested some local insurers to the Complainant thereby giving the Complainant other options in her consideration of the electrical report. The Complainant was able to complete electrical upgrades prior to settlement of the Property after negotiation with the vendor.

Reason Five: Bullying tactics used by the Licensee

3.9. The Committee considers that the evidence does not disclose that the Licensee had used bullying tactics in her interactions with the Complainant. In the complaint it is said that the Licensee did not allow the Complainant or her sister to view the south side of the Property. This was not supported

by the evidence and it would appear that there was ample opportunity for the Complainant to view all parts of the Property and that it is likely she availed herself of that.

Reason Six: Adequate supervision of the Licensee by the Agency

3.10. The evidence from the Agency suggests to the Committee that there was adequate supervision of the Licensee throughout the transaction. The Licensee brought to the Agency’s attention the conditions attached to the offer, especially the order in which the Complainant wished to complete the conditions. The Complainant wished to satisfy the inspection clauses prior to her own property in Christchurch becoming unconditional which the Licensee cautioned her about, but the Complainant chose to continue in this manner.

3.11. The Agency supplied evidence to show that they had been involved in all aspects of the transaction and that in general they have sound policy regarding supervision of licensees, and that in this case there was regular communication between the Licensee and the Agency regarding aspects of the process. It is further noted that the Agency upon realising the error in regards to disclosure around the flue offered to rectify the problem at their cost.

3.12. The Committee found overall that the conduct of the Licensee and the Agency throughout this transaction was of an acceptable standard, with all matters complained of addressed adequately by the parties in a timely manner. It has therefore decided not to take further action in respect of the complaint, both with regard to the Licensee and the Agency.

4. What happens next

Your right to appeal

4.1. If you are affected by this decision of the Committee, you may appeal in writing to the Real Estate Agents Disciplinary Tribunal (the Tribunal) within 20 working days after the date of this decision. Your appeal must include a copy of this decision and any other information you wish the Tribunal to consider in relation to the appeal. Refer to Appendix section 111.

4.2. For further information on filing an appeal, read Guide to Filing an Appeal at M inistry o f Justice-

Tribunals ( ww w.justice. go vt.nz/ tribunals ) .

Publication

4.3. At the Committee’s discretion, the decision will be published without the names or identifying details of the Complainant (including the address of the Property), the Licensee and any third parties.

4.4. The Authority will publish the Committee’s decision after the period for filing an appeal has ended, unless the Tribunal receives an application for an order preventing publication. The Authority will not publish the Committee’s decision until the Tribunal has made a decision on the application.

4.5. Publishing the Committee’s decision supports the purpose of the Act by ensuring that the disciplinary process remains transparent, independent and effective. The Committee also considers that publishing this decision helps to set industry standards and that is in the public interest.

Signed

Marjorie Noble

Deputy Chairperson

For Complaints Assessment Committee 407

Real Estate Agents Authority

Date: 22 June 2015

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

Section 89 Power of Committee to determine complaint or allegation

(1) A Committee may make one or more of the determinations described in subsection (2) after both inquiring into a complaint or allegation and conducting a hearing with regard to that complaint or allegation.

(2) The determinations that the Committee may make are as follows:

(a) a determination that the complaint or allegation be considered by the Disciplinary Tribunal: (b) a determination that it has been proved, on the balance of probabilities, that the licensee

has engaged in unsatisfactory conduct:

(c) a determination that the Committee take no further action with regard to the complaint or allegation or any issue involved in the complaint or allegation.

(3) Nothing in this section limits the power of the Committee to make, at any time, a decision under section 80 with regard to a complaint.

Section 111 Appeal to Tribunal against determination by Committee

(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 the notice given under section 81 or 94.

(2) The appeal is by way of written notice to the Tribunal of the appellant's intention to appeal, accompanied by—

(a) a copy of the notice given to the person under section 81 or 94; and

(b) any other information that the appellant wishes the Tribunal to consider in relation to the appeal.

(3) The appeal is by way of rehearing.

(4) After considering the appeal, the Tribunal may confirm, reverse, or modify the determination of the Committee.

(5) If the Tribunal reverses or modifies a determination of the Committee, it may exercise any of the powers that the Committee could have exercised.