Steven - Complaint No C04836 [2015] NZREAA 212 (29 October 2015)

Last Updated: 21 June 2018

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

And

In the Matter of Complaint No: C04836

In the Matter of Valerie (Val) Steven

License Number: 10004135

Courtney Steven

License Number: 10036897

Licensee Three

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Finding of unsatisfactory conduct asking for submissions and Decision not to inquire

Dated this 29th day of October 2015

Complaints Assessment Committee: CAC 405

Chairperson: Graham Rossiter Deputy Chairperson: Jane Parker Panel Member: Geoff Warren

Decision of Complaints Assessment Committee

Decision finding unsatisfactory conduct asking for submissions and Decision not to inquire

1. The Complaint

1.1. On 15 June 2015 the Real Estate Agents Authority (the Authority) received a complaint against Valerie (Val) Steven (Licensee One) and Courtney Steven (Licensee Two) (the Licensees) and Licensee Three from Complainant One and Two (the Complainants).

1.2. Licensee One and Licensee Two are licensed salespersons under the Real Estate Agents Act

2008 (the Act) and at the time of conduct were engaged by Barfoot & Thompson Howick

Branch (the Agency).

1.3. Licensee Three is a licensed agent under the Act and is engaged by the Agency as a

Compliance Manager.

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

1.5. The details of the complaint are that legal proceedings around noise issues from a gym situated below their Property were not fully disclosed to them during the pre-purchase disclosure period. Had they been made aware of the issues they would not have purchased the Property.

1.6. In particular, the Complainants advised that at the time of viewing the Property they noticed the downstairs tenant was a 24 hour gym (the Gym).

1.7. The Complainants said they specifically asked the Licensees whether there were any noise issues from the Gym and were told the Gym did not operate overnight, and while there had been noise issues they had been sorted out.

1.8. Complainant Two’s mother attended an open home at the Property in January 2013 with the Complainants, and has sworn an affidavit that she noticed a Gym operating downstairs and asked Licensee One, who was in attendance, about noise level from the Gym. Licensee One expressed the Gym was not able to use equipment overnight and there was no problem. There was no mention at all about any current dispute between residents in the Property’s complex and the Gym.

1.9. The Complainants made an acceptable offer for the Property on 29 January 2013, which settled 8 March and they moved in on 8 April 2013.

1.10. The Complainants stated they were impacted by noise issues emanating from the gym from day one of moving in.

1.11. Complainant Two attended a body corporate AGM on 10 April 2013, and found that noise

issues from the Gym had been ongoing and that legal action was underway by the body corporate against the Gym.

1.12. The Complainants acknowledged having been made aware that there had been noise issues

from the Gym, but allege the Licensees withheld information regarding the true extent of noise issues at the Property’s complex, and failed to inform them that Tenancy Tribunal Court proceedings had been initiated by the Body Corporate in regard to noise caused by members of the Gym.

1.13. The Complainants accept being supplied, at an open home, an information pack containing Body Corporate minutes that made reference to noise issues and also being sent a link to the MYINFO web site (Barfoot & Thompson web site link sent to all prospective purchasers which contained all relevant documentation for a purchaser to view at their leisure).

1.14. However the Complainants say they never read these Body Corporate minutes.

1.15. The Complainants deny having received an email sent to all attendees following an open home of the weekend 12-13 January 2013, advising them the noise issues had not been resolved.

1.16. Evidence produced to the Committee showed the email had been sent to [Complainant Two’s full name]@xtra.co.nz whereas the Complainants email is [Complainant Two’s initials and last name]@xtra.co.nz.

1.17. The Complainants requested a remedy, being:

(a) written apologies from both Licensees and Barfoot & Thompson acknowledging negligence, lack of duty of care, and pre-contractual misrepresentation;

(b) compensation for stress and anxiety;

(c) assurance that both Licensees’ will cease breaching the Complainants’ privacy.

1.18. The Licensees responded to the complaint against them. In particular, the Licensees commented that they completely refute the assertion that they withheld information regarding the noise issue from the Gym, from the Complainants.

1.19. They state the Complainants were fully versed with all the Licensees’ knowledge of the noise issue and the Complainants’ purchased the Property in the full knowledge they would be living above the Gym, which boldly advertises they operate 24/7.

1.20. The Complainants were told many times by the Licensees’ to undertake due diligence around all aspects of the purchase including the noise issue, and they had time between the open homes, two pre-auction meetings, and the auction day to do this.

1.21. The Licensees stated the Complainants went through an open home on 12-13 January and spoke to Ms. G (which will be addressed in our decision); Ms. G is the owner of the adjoining apartment and a Body Corporate member.

1.22. Licensee Two stated the Complainants and Ms. G had a conversation around the noise issue and that it had still not been resolved.

1.23. Soon after the open home of 12-13 January, the Licensees emailed the Complainants a link to Barfoot & Thompsons MYINFO web site for them to view, which contained in a link, “Particulars and Conditions”, the Body Corp minutes of 21 May and 18 June 2012.

1.24. The Licensees sent an email on 14 January to the Complainants, and all others that had attended the open homes of 12-13 January, in which they discussed the noise issues from the Gym and the fact it had not been resolved.

2. What we decided

2.1. On 17 July 2015 the Complaints Assessment Committee (the Committee) considered all the information in the complaint and decided to inquire into Licensee One and Licensee Two. The Committee also considered the information against Licensee Three and decided not to inquire into this part of the complaint. The decision was made under s79 of the Act and with reference to the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (the Rules).

2.2. On 9 October 2015 the Committee held a hearing on the papers and considered all the information that had been gathered during the inquiry.

2.3. The Committee found that Licensee One and Licensee Two have engaged in unsatisfactory conduct under section 89(2)(b) of the Act.

3. Our reasons for the decision

3.1. The Committee found, pursuant to section 72 of the Act, that the Licensee’s actions would reasonably be regarded by agents of good standing as being unacceptable. Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012:

Rule 5.1 (Standards of professional competence) Rule 6.4 (Standards of professional conduct)

The Committee concluded:

3.2. Licensees One and Two withheld information (legal action by the Body Corporate) which in fairness should have been disclosed to the Complainants.

3.3. By way of background, it was submitted to the Committee that the Gym opened the premises situated below the Complainants’ Property in July 2011, where they continued to operate until moving to other premises in Sept/Oct 2014.

3.4. Complaints of noise from the gym by residents in the apartment complex appear to have commenced in January 2012, just after formation of the complex’s Body Corporate.

3.5. Attempts by the Gym owners to mitigate the noise issue proved unsuccessful with the result that the Body Corporate sought, and obtained; a Tenancy Tribunal Order dated Tuesday 18

December 2012, limiting the hours that the Gym could operate, from 6am to 10pm daily.

3.6. It appeared this order was breached by some gym members and continued through to a second Tenancy Tribunal Order dated Tuesday 11 June 2013.

3.7. It is apparent to the Committee that the Body Corporate had kept complex owners well updated and that both Licensees’ were aware of developments. An email, dated 14 January

2013, from Licensee One to Licensee Two, which was also sent to the Complainants incorrect

email address, advised:

“We saw one of the owners at the complex who informed us about the noise at the gym. There is an order in place to stop the use of weights from 23.30 to 05.30, apparently this is not always adhered to so the commercial body corporate are going back to the tribunal to ensure it is enforced, this should happen either today or early this week”.

3.8. The Licensees submitted that this email, an information pack containing Body Corporate minutes given to the Complainants at an open home, and a link to MYINFO containing Body Corporate minutes within a file titled ‘Particulars and Conditions’, were sufficient for the Complainants to be fully briefed on the ongoing noise issue.

3.9. The Licensees further stated that the Complainants met Ms. G in the hallway leading to the Property while attending an open home and had a discussion with her about continuing noise issues.

3.10. The Complainants refuted this, stating they never read the Body Corporate minutes, either those given to them or sent via the MYINFO link. Nor did they receive the email as it was not their email address.

3.11. A statement received from Ms. G, who was involved with the Body Corporate, reads:

“I first met [the Complainants] when they moved into their apartment which is next door to mine. I never met them prior to that time nor did I ever speak with them re any noise issues. During the open homes of 12-16 January I was away visiting a friend in hospital. I recall coming home toward the end of the day and Licensee One was showing some people around the apartment. I didn’t see these people or have any conversation with them .I do recall that meeting, that I spoke with Licensee One re the noise and she showed me a text she had

received from Mr. O, the property manager. She said the text said the noise issue had been resolved. I pointed out to her that it was only an interim order and that we would still have to go to court. The noise from the gym was unbearable. It was difficult to sleep”.

3.12. The Complainants stated had they known about the Tenancy Tribunal Order and subsequent ongoing legal action they would not have purchased the Property, rather they relied on the Licensees’ assurance that the noise issue had been resolved.

3.13. The Committee accepts this and in its deliberation considered whether the reliance placed by the Licensees’ upon incorrectly sent email communication, and reference to the MYINFO

website tome of documentation about the Property, was enough to fulfill the Licensees’

obligation under Rules 5.1 and 6.2.

3.14. The matter of the ongoing Tenancy Tribunal, and possible District Court action by the Body Corporate against the Gym in relation to the noise issue, was information that in fairness should have been specifically provided to the Complainants.

4. Request for submissions on orders

4.1. 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. Refer to the Appendix of this decision.

Licensee One and Licensee Two

4.2. The Complainants are to file submissions (if any) on what orders should be made within 10 working days from the date of issue of the decision. A copy of the submissions (if any) will be provided to the Licensees and a time frame in which to respond.

4.3. The Committee requires the Case Administrator to obtain a record of any previous disciplinary decisions in respect of the Licensees and, if any such decision exists, provide it to the Committee.

5. What happens next

5.1. The Committee will consider all submissions and issue a decision on orders.

Your right to appeal

5.2. In the matter of Licensee One and Licensee Two, 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.

5.3. In the matter of Licensee Three, if you are affected by this decision 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 may wish to the Tribunal to consider in relation to the appeal. Refer to Appendix section 111.

6. Publication

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

Signed

Geoff Warren

Panel Member

For Complaints Assessment Committee 405

Real Estate Agents Authority

Date: 29 October 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 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.

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.

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.

The relevant provisions from the Real Estate Agents Act (Professional Conduct and Client Care) Rules

2012 are:

Rule 5 Standards of professional competence

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

Rule 6 Standards of professional conduct

Rule 6.4 A licensee must not mislead a customer or client, nor provide false information, nor

withhold information that should by law or in fairness be provided to a customer or client.