Complaint No C05235 [2015] NZREAA 28 (4 February 2015)

Last Updated: 26 September 2015

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

And

In the Matter of Complaint No: C05235

In the Matter of The Licensee

Licence Number: XXXXXXXX

Decision of Complaints Assessment Committee

Dated this 4th day of February 2015

Complaints Assessment Committee: CAC303

Chairperson: Marina Neylon Deputy Chairperson: Susan D’Ath Panel Member: Amanda Elliott

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. This is a complaint made by the Complainant against the Licensee. The Licensee is a licensed salesperson under the Real Estate Agents Act 2008 (the Act) engaged by the Agency.

1.2. The complaint relates to the Complainant’s purchase of a property (the Property).

1.3. The complaint alleges that the Licensee knew, or should have known about various problems with the Property and failed to disclose these issues to the Complainant. The issues include a faulty gas hob and dishwasher and a leaking roof.

1.4. The Complainant is seeking compensation from the Licensee for the cost of fixing the appliances and the roof.

2. Material Facts

2.1. The Property was originally offered for private sale by the vendor. The Complainant expressed interest in the Property during the private sale period but was not in a position to make an offer for the Property at that time because she wished to sell her own home first.

2.2. The vendor listed the Property with the Licensee as a sole agency on 6 January 2014.

2.3. On 24 January 2014 the Complainant signed a multi-offer form which stated that there was more than one party interested in purchasing the Property at that date and that the Licensee would present the Complainant’s offer and the other written offer/s to the vendor at the same time. The Complainant was advised to make her best offer.

2.4. The vendor accepted the Complainant’s offer on 29 January 2014. Prior to the settlement date the Complainant met the vendor at the Property and was shown how to operate the dishwasher and gas hob. The sale proceeded to settlement on 28 February 2014.

2.5. After the settlement date, the Complainant discovered that the dishwasher was not working.

She was also concerned that the gas hob ignition system was unsafe.

2.6. The Complainant contracted a local plumber to install a new wood burner. That contractor asked if the Complainant was aware of the leaks in the Property. The contractor advised that he had been asked to look at these by the vendor but was not asked to fix them at the time.

3. Relevant Provisions

3.1. Real Estate Agents Act 2008

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.

3.2. Professional Conduct and Client Care Rules 2012

Rule 6.4 A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or fairness be provided to a customer or client.

Rule 10.7 A licensee is not required to discover hidden or underlying defects in land but must disclose known defects to a customer. Where it would appear likely to a reasonably competent licensee that land may be subject to hidden defects, a licensee must either –

(a) obtain confirmation from the client, supported by evidence or expert advice, that the land in question is not subject to defect; or

(b) ensure that a customer is informed of any significant potential

risk so that the customer can seek expert advice if the customer so chooses.

4. Discussion

4.1. The Committee has carefully investigated and considered all the matters raised by the Complainant. 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 notes that the Property had been owned by the vendor for approximately 10 years, and from late 2005 up until the three months prior to sale, the Property was tenanted.

The dishwasher –

4.3. The Complainant submits that the Licensee did not advise her that the dishwasher was not in working order. The Licensee says that he was not informed by the vendor that the dishwasher did not work. The vendor confirms that he had no discussion about the dishwasher with the Licensee and goes on to state that he did not use the dishwasher during his time at the Property, but had checked that it worked before settlement.

4.4. The Complainant acknowledges that the vendor ran the dishwasher for a few minutes on settlement day. This leads the Committee to the view that the vendor and the Licensee believed that the dishwasher was working at the time of settlement. We conclude that if the dishwasher stopped working after the time of settlement, the risk and responsibility for the repair lies with the Complainant. If it was not working properly before the settlement date then the Committee takes the view that the Complainant’s cause of such action would be against the vendor, not the Licensee, as this would be a “hidden defect” that the Licensee would not be expected to foresee.

The gas hob –

4.5. The Complainant has stated that the gas hob was unsafe because the automatic ignition system was not working. The gas hob had an electric ignition system which the vendor knew was not working just prior to settlement. The vendor told the Licensee of the situation and stated that he (the vendor) would fix the problem before settlement.

4.6. The vendor states that he arranged for the repair to be done but the electrician concluded that the repair would be “difficult if not impractical”. The vendor then chose not to proceed with the repair but to make the Complainant aware of that situation. He concluded that if it was unsafe, the electrician would have mentioned this.

4.7. During a pre-settlement meeting, the Complainant agrees that the vendor demonstrated that the gas hob would still work using a lighter for ignition. The vendor and his partner had been using the hob in this manner for approximately three months. The vendor says that the Complainant’s partner seemed to be ok with using the lighter to ignite the hob.

4.8. The Complainant said in her initial complaint that she felt this was dangerous and, after taking possession of the Property, the Complainant elected to replace the hob at a cost of $799.

4.9. The Committee finds that there is no liability here on the part of the Licensee.

4.10. It is the Committee’s view that the Complainant proceeded to settlement with full knowledge of the issue regarding the gas hob. The Committee finds that the Licensee cannot be held responsible for the cost of an item which the Complainant knew was faulty at the time of settlement.

Leaks –

4.11. The Complainant engaged the services of a local plumber (Mr. B) to install a new fireplace.

During discussions with the contractor the Complainant was told that the Property had “quite a few leaks.” The Complainant states that after a heavy downpour of rain, the south side window in the lounge leaked in three places. The Complainant submits that the vendor should have disclosed any leaks to the Licensee, who should have been more diligent in asking about these matters.

4.12. The Licensee states that he saw no sign of water staining or leaking at the Property but that the vendor had told him about a previous leak in the garage which he had fixed. The Committee sought an explanation from the vendor, whom the Committee have found to be a reliable and forthright witness to these events.

4.13. The vendor states that the leak in the garage was disclosed to the Licensee and that the vendor had cleared the downpipes and guttering and believed that, as no further leaking had occurred in that area, the problem had been rectified.

4.14. In relation to the leak in the south side of the living area, the vendors says that his tenants had not mentioned any issue with leaking there but that he personally noted some mould under the window so he engaged Mr. B to check the roof. Mr. B suggested that there needed to be a rain- head installed on the south wall. The vendor states that he instructed that work to be undertaken but that after four months Mr. B had not had time to complete the work. The vendor then instructed another plumber to do the repair.

4.15. Our investigator spoke with Mr. B, who confirmed that the vendor had called him several times about the work but Mr. B was too busy. He was not aware that the repairs had been carried out

by another contractor.

4.16. The Committee notes that as part of her complaint the Complainant states she is disappointed that initially the house was listed on Trademe (private sale) for $499,000 which she verbally agreed to pay but then it was listed by the Licensee and she ended up paying $525,000 to cover the cost of the Licensee’s commission. The Committee can sympathise with the Complainant to a point but would suggest that this was due to unfortunate timing rather than any unfairness by the Licensee or the vendor.

4.17. The Complainant goes on to say that she loves her Property and the lifestyle but feels she was misled by the owner, and that the Licensee didn’t fulfil his duties to her as a purchaser. The Committee are satisfied that the Complainant’s concerns about the conduct of the Licensee are not supported by the evidence before us. We therefore determine 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: 4 February 2015