Complaint No C06935 [2015] NZREAA 266 (29 September 2015)

Last Updated: 24 May 2016

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

And

In the Matter of Complaint No: C06935

In the Matter of The Licensee

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Decision to take no further action

Dated this 29th day of September 2015

Complaints Assessment Committee: CAC 403

Chairperson: Susan D'Ath

Deputy Chairperson: Amelia Bardsley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1 On 23 December 2014 the Real Estate Agents Authority (the Authority) received a complaint against the Licensee from the Complainant.

1.2 The Licensee is a licensed salesperson under the Real Estate Agents Act 2008 (the Act). At the time of the conduct he was engaged by the Agency.

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

1.4 The details of the complaint are:

(a) the Licensee did not ensure the security of another property when he met the

Complainant and her husband there to deal with their offer on the Property;

(b) whether the Licensee lied to the Complainant about there being another offer on the

Property;

(c) whether the purchase price on the sale and purchase agreement should have excluded the amount of the EQC pay-out;

(d) whether the Licensee conveyed the realistic price expectations of the vendors.

1.5 The Complainant stated she wanted to make sure others were not affected by the Licensee’s “misleading and bullying behaviour”, and that she would be happy with an outcome whereby he was more closely monitored.

1.6 The Licensee responded to the complaint against him.

2. What we decided

2.1 On 28 January 2015 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it.

2.2 On 9 September 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, 6.2, 6.3, 9.2, 9.4, 9.5 and 10.9.

3. Our reasons for the decision

3.1 The Committee concluded that none of the complaints are made out to the required standard on the balance of probabilities, for the reasons set out as follows:

Complaint One

3.2 The complaint relates to events in February 2014. The Complainant and her partner were making an offer on the Property. They had made a previous offer, which had been declined, and a new offer was being prepared. She says they met the Licensee at a property on XX Street, that he gave them the key to that property, and having a dog with him, let it roam in the backyard. She further says that they were unable to gain access to that property as the key did not work.

3.3 The Licensee disputes the Complainant’s version of events. He says that it was signatures/initials to a counter-offer which were required, not the preparation of a new offer. He denies giving the Complainant the key to XX Street and says he did not have the key to that property at that time. He agrees that he had a dog with him and that he let it out of the car, but that nobody went into the property. He says that he was taking the afternoon off work and met the Complainant and her partner at the property because it was conveniently located for both parties.

3.4 The Complainant made a written complaint to the Agency on the day following these events.

Her letter dated 23 February focuses on her belief that there was not another offer on the Property, the alleged refusal of the Licensee to come to her home, and her concerns about being pressured to increase the offer. There is no mention of a key, or access to the property at XX Street, or of the dog.

3.5 The Agency dealt with the complaint and the Licensee apologised. At that point the Agency and Licensee believed that the matter was at an end.

3.6 Failure to keep a property secure is a breach of Rule 9.5 (ensure security and avoid risk of damage) and the other elements of this complaint could relate to Rule 5.1 (exercise skill and care). There is insufficient evidence for the Committee to reach a conclusion as to whether or not the Licensee had the key to XX Street on that particular day, but both parties agree that nobody entered that property. There has been no complaint from the vendor. There is no evidence the property was not secure and the complaint is therefore not upheld.

3.7 Bringing a dog to a meeting might be overly casual, but it is not per se a breach of any Rule.

The Licensee’s explanation of the meeting taking place at a time when he was not formally working is a reasonable one. We find that on the balance of probabilities this aspect of the complaint is not proven to the degree required to amount to a breach of the Rules.

Complaint Two

3.8 The Complainant believes that the Licensee lied about there being another offer on the Property. The parties agree that at the time leading up to the Complainant and her partner making their offer on the Property, the Licensee told them there was another interested party and had a multi-offer form signed. He shortly thereafter called them and said it was no longer a multi-offer situation.

3.9 If the Licensee lied about there being other interest then that could amount to a breach of Rules 6.2 (act in good faith and deal fairly), 6.3 (not bring the industry into disrepute), and 9.2 (no undue or unfair pressure) and could lead to a finding of unsatisfactory conduct.

3.10 The Licensee provided the investigator with the contact details of the prospective purchaser he believed was the other party interested at the time. The prospective purchaser agreed

that he viewed the Property possibly more than once but that, while he was interested, his partner was not.

3.11 We do not think that on the evidence the Licensee acted wrongly. This is not a situation where there was no other interested potential buyer.

3.12 If the Licensee had any reason to believe there might be another offer on the Property, he was obliged to tell the Complainant. Likewise, when he became aware no other offer was being made, he had an obligation to tell the Complainant that information. The Complainant says that he contacted her by phone within 20 minutes of their signing the offer, which would have allowed for it to be withdrawn had they wanted to do so. The Licensee is primarily obligated to use his efforts to obtain the best possible price for his vendor. This complaint is not upheld.

Complaint Three

3.13 This complaint concerns the manner in which the sale and purchase agreement was drafted and the manner in which settlement of the purchase was completed. The agreement states the purchase price as $295,000; however, on settlement the Complainant paid only $167,000 because the vendors retained the EQC and IAG pay-outs. The Complainant believes the higher price was entered into the agreement by the Licensee to obtain a higher commission.

3.14 The agreement contains provisions we would expect to see in a contract for the sale of an insured property in the City. Clause 19 is a standard provision regarding EQC lodged claims, and clauses 20 and 21 and the addition to page 1 of the agreement appear to have been inserted by the Complainant. Clauses 20 and 21 contradict each other, and in fairness to the Complainant, we interpret that as an attempt by them to cover their options on settlement.

3.15 The Licensee says the Property was marketed as an insured property, on the basis that the claims would be transferred to the purchasers and that the vendors did not receive the EQC and IAG pay-outs. We note that transfer/assignments were signed. The vendors have stated that the benefit of the EQC claim was transferred to the Complainant following settlement and have not complained or indicated dissatisfaction with the commission.

3.16 In contrast, the Complainant is adamant that the pay-outs were received by the vendors.

Faced with the vendors’ denial that they received the pay-outs, we are unable to reach a decision on the evidence before us as to who in fact received the pay-outs. What is certain from the evidence of the lawyers’ settlement statement is that the sale was completed on the basis that the Complainant and her partner were credited with the EQC and IAG pay- outs, and on settlement paid only the balance of the purchase price.

3.17 On the evidence we do have it appears that the Property was sold as an insured property, but for whatever reason, the lawyers concluded the settlement on the basis of an uninsured one. We note that in correspondence with the Authority, the Complainant states the Property is uninsured as cover could not be obtained. None of this is in our view related to the Licensee. How settlement of the transaction was conducted was in the hands of the lawyers. We have no evidence to support the allegation against the Licensee and it is therefore not upheld.

Complaint Four

3.18 The complaint is that the Licensee failed to convey the realistic price expectations of the vendors. If this was the case then Rule 9.4 (not mislead customers as to price expectations of client) and 10.9 (not to advertise on terms different from those authorised by client) could have been breached.

3.19 The vendors have confirmed they received an appraisal of the Property, however, we have not seen a copy. They have also said they discussed recent sales with the Licensee. The Licensee has since left the Agency and no copy of the appraisal has been produced. The Licensee says he priced the Property at a wide price band of $270,000 to $360,000 and that it was not priced at his recommendation. The Complainant supports this insofar as she says that, in response to an email enquiry, the Licensee gave her that price range. The Property had a rating valuation of $275,000 which was seven years old and the City’s earthquakes could reasonably be expected to have had an impact on values.

3.20 The Complainant’s initial offer of $275,000 was rejected but their subsequent offer of

$295,000 was accepted. The vendors have stated that while they sold for $20,000 less than they hoped for, it was a fair price.

3.21 On the evidence before us we struggle to see the point the Complainant is trying to make.

The Property was sold at a price agreeable to both parties. There is no evidence suggesting it was under-priced or that the vendors were unhappy with the result. There was an offer and counter-offer made. The Complainant refers to her research showing that houses in the area were selling for within 10% of the rating valuation. She seems to be saying the price should have been lower but it was the Complainant who chose to offer $295,000 and it was the Licensee’s obligation to get the best possible price for his clients. This complaint is not proven due to the lack of evidence to support the allegation.

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 Ministry of

Justice-Tribunals (www.justice.govt.nz/tribunals).

Publication

4.3 At the Committee’s discretion, the decision will be published omitting the names and 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

Susan D'Ath

Chairperson

For Complaints Assessment Committee 403

Real Estate Agents Authority

Date: 29 September 2015

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

Section 80 Decision to take no action on complaint

(1) A Committee may, in its discretion, decide to take no action or, as the case may require, no further action on any complaint if, in the opinion of the Committee,—

(a) the length of time that has elapsed between the date when the subject matter of the complaint arose and the date when the complaint was made is such that an investigation of the complaint is no longer practicable or desirable; or

(b) the subject matter of the complaint is inconsequential.

(2) Despite anything in subsection (1), the Committee may, in its discretion, decide not to take any further action on a complaint if, in the course of the investigation of the complaint, it appears to the Committee that, having regard to all the circumstances of the case, any further action is unnecessary or inappropriate.

Section 81 Notice of decision

(1) In any case where a Committee decides to take no action on a complaint, the

Committee must promptly give written notice of that decision to—

(a) the complainant; and

(b) the person complained about. (2) The notice must—

(a) state the decision and the reasons for it; and

(b) describe the right of appeal conferred by section 111.

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

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.

Rule 9.4 A licensee must not mislead customers as to the price expectations of the client.

Rule 9.5 A licensee must take due care to—

(a) ensure the security of land and every business in respect of which the licensee is carrying out real estate agency work; and

(b) avoid risks of damage that may arise from customers, or clients that are not the owner of the land or business, accessing the land or business.

Rule 10.9 A licensee must not advertise any land or business on terms that are different from those authorised by the client.