Complaint No C07232 [2015] NZREAA 215 (4 August 2015)

Last Updated: 29 March 2016

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

And

In the Matter of Complaint No: C07232

In the Matter of Licensee One

License Number: XXXXXXXX

The Agency

License Number: XXXXXXXX

Licensee Two

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 4th day of August 2015

Complaints Assessment Committee: CAC406

Chairperson: Paul Biddington Deputy Chairperson: Bernardine Hannan Panel Member: David Bennett

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 10 February 2015 the Real Estate Agents Authority (the Authority) received a complaint against Licensee One from the Complainant. On the same date the Complaints Assessment Committee (CAC) decided to inquire into the Agency. After the investigation commenced, on

23 April 2015, a complaint was raised against Licensee Two.

1.2. The Licensees are licensed under the Real Estate Agents Act 2008 (the Act). Licensee One holds a salesperson license, as does Licensee Two. The Agency holds an agent license.

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

1.4. The details of the complaint are that Licensee Two spoke to one of the vendors of the Property, while the Complainant’s agency had a sole agency agreement in place, and asked a number of questions of the vendor.

1.5. In particular, the Complainant advised that Licensee Two critiqued a number of issues relating to the listing. Furthermore, the Complainant alleges Licensee One and the Agency did not adequately deal with the Complainant’s concerns about Licensee Two’s contact with the vendor.

1.6. At the time of making his complaint, the Complainant was unaware that Licensee Two was the Agency’s licensee who had contacted the vendor. The Complainant saw Licensee Two’s actions as breaching the Code of Conduct and bringing the industry into disrepute.

1.7. According to the Complainant, Licensee Two proceeded to undermine advice given to the vendors by the Complainant’s agency, and to comment on listing decisions made by the vendors at the time of listing. These comments extended to commenting on the advertised price and the method of sale.

1.8. The Complainant says he sought to identify the Agency’s licensee who had called his client.

He says he contacted Licensee One on 28 January 2015, and followed this up with an email on the same day. The Complainant says Licensee One replied on 30 January 2015; however, he was not happy with the response as Licensee One did not identify the licensee concerned or see any issue with the behavior involved.

1.9. The Complainant requested a remedy, being:

(a) relevant penalties for breaching the Code of Conduct.

1.10. The Licensees responded to the complaint against them.

1.11. In particular, Licensee Two confirmed that he contacted the vendor of the Property on or about 2.30pm on 20 January 2015, to investigate further their campaign within the market as part of his “usual market research”.

1.12. Licensee Two says he asked how their open homes had gone, whether they had had any significant response, and whether they had received any offers at this point. During the

conversation, Licensee Two says the vendor mentioned that a number of people enquiring were at a good level but they had not received any offers. He says the vendor went on to explain they were hopeful of obtaining their actual price over the ‘Buyer Enquiry Over’ (BEO) level that had been set, which was above that listed on Trade Me.

1.13. At this point, Licensee Two says he suggested they speak with their agent, Mr. C, as the Property was listed at a price, not a BEO level. In his response he stated “at no point did I suggest they list with me and/or the Agency”.

1.14. When spoken to by Licensee One, Licensee Two stated he was very aware and was always careful not to interfere in other agencies’ listings. The Complainant originally thought that Licensee One may have called the vendor but Licensee One stated “I do not make calls to vendors for the purpose of interrupting or jeopardizing any agency and I am certainly not interested in interfering with a sole agency”.

1.15. The Investigator spoke with the vendor of the Property, who confirmed that Licensee Two did ask him various questions and there was a discussion about the Property being listed at a price and not a BEO figure. He also stated that he took the implication from Licensee Two’s contact that, should they be looking to list elsewhere at the end of the listing with the Complainant’s agency, the Agency would be interested in their listing.

1.16. Licensee One says he gathered information from licensees in the Agency as to who may have made calls to vendors in the area, and discovered it was Licensee Two. He says he asked Licensee Two for an explanation and advised him a complaint had been made against him. He says he reminded Licensee Two that calling other agencies’ sole agencies is a “fine line and there are criteria that must be met at all times”.

1.17. In relation to the Complainant alleging that he and the Agency did not adequately deal with his concerns about Licensee Two contacting the vendor, Licensee One says he received a call from the Complainant demanding the name of the licensee who had made a call to the vendor of the Property.

1.18. He says he advised the Complainant that complaints were taken seriously and he would need to undertake some background checks to understand more about the matter. It was agreed he would get back to the Complainant by 30 January 2015.

1.19. Licensee One says he checked with a senior person in the Agency and asked for clarification on whether he was duty bound to supply the name of any licensee that may have made the phone call. He says their discussion included reference to the Authority and Real Estate Institute of New Zealand (REINZ) information sheet for licensees entitled ‘Agency Agreements’. A copy was provided to the Committee.

1.20. According to Licensee One, he replied to the Complainant on 30 January 2015 and advised that he had spoken with his agents and outlined the protocol for contacting other agencies’ listings, and that he did not believe there was a need to escalate the matter.

2. What we decided

2.1. On 30 March 2015 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it.

2.2. On 18 June 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. In particular Rules 5.1, 6.3 and 9.2.

3. Our reasons for the decision

3.1. The Committee is not persuaded that Licensee One, the Agency, or Licensee Two acted unprofessionally in contacting the vendor or in the handling of the complaint.

Issue One: Contact with the vendor

3.2. The Committee noted that the matter was first dealt with by way of a Consumer Information letter and then a Compliance Advice letter sent to the Agency, however, the Complainant insisted the matter be referred to a CAC.

3.3. On 24 February 2015, the Authority emailed the Complainant advising that it was permissible for a licensee to contact another agency’s client for the purposes of “marketing their services”.

3.4. Furthermore, the Committee is of the view the conduct of Licensee Two in approaching the vendor does not fit within the definition of “real estate agency work” under section 4 of the Act (“any work done or services provided, in trade, on behalf of another person for the purpose of bringing about a transaction”) therefore it would have to be considered under section 73 of the Act as possibly amounting to misconduct. The Committee’s view is the conduct does not reach this threshold.

3.5. The Committee was provided with an information sheet produced by the Authority and REINZ, which offers some guidance in relation to approaching clients who have a sole agency with another licensee. The Committee accepts Licensee Two followed the protocols outlined in the information sheet and complied with his obligations.

3.6. The Committee found no evidence to suggest Licensee Two undermined advice given to the vendor by the Complainant’s agency, or commented on listing decisions made by the vendor at the time of listing.

3.7. Accordingly, the Committee finds Licensee Two has not breached the Act or the Rules and the

Committee finds that no further action is required in relation to this aspect of the complaint.

Issue Two: Agency’s handling of complaint

3.8. The Complainant alleges Licensee One did not adequately deal with his concerns about Licensee Two contacting the vendor. The Committee has considered the evidence provided by Licensee One and found his actions were appropriate.

3.9. Upon receiving the call from the Complainant, Licensee One stated he advised the Complainant he would need to undertake some background checks to understand more about the matter. The Committee finds the approach taken by Licensee One to be appropriate and considered. The Complainant may have felt Licensee One was not taking the complaint seriously and trying to brush him off, however, it was important for Licensee One to gather as much information in relation to the complaint before responding.

3.10. The Committee accepts Licensee One checked with a senior person in the Agency to clarify whether he was duty bound to supply the name of the licensee who had undertaken the phone call. He says their discussion included reference to the relevant page from the Authority and REINZ information sheet.

3.11. Licensee One stated it was agreed that he would get back to the Complainant by 30 January

2015, and this is what he did. In his reply he advised he had spoken with his staff and outlined the protocol for contacting other agencies’ listings, and he did not believe there was a need to escalate the matter.

3.12. The Complainant may have wanted the name of the Agency’s licensee, who approached his vendor when he first contacted Licensee One, however, it was the decision of Licensee One and the Agency not to provide this, as they believed there had been no breach of the Act or the Rules. The Committee agrees.

3.13. Accordingly, the Committee finds Licensee One and the Agency have not breached the Act or the Rules and no further action is required in relation to this aspect of the complaint.

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 v t.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 Licensees 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

Paul Biddington

Chairperson

For Complaints Assessment Committee 406

Real Estate Agents Authority

Date: 4 August 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.

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

2012 are:

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

Rule 6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.

Rule 9.2 A licensee must not engage in any conduct that would put a prospective client, client, or customer under undue or unfair pressure.