Adcock - Complaint No C06098 [2015] NZREAA 299 (30 October 2015)

Last Updated: 24 July 2016

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

And

In the Matter of Complaint No: C06098

In the Matter of Philip Adcock

Licence Number: 10016061

Decision of Complaints Assessment Committee

Finding of unsatisfactory conduct - asking for submissions on order

Dated this 30th day of October 2015

Complaints Assessment Committee: CAC 403

Chairperson: Susan D'Ath Deputy Chairperson: Amelia Bardsley Panel Member: Sandra Wilson

Complaints Assessment Committee

Decision finding unsatisfactory conduct - asking for submissions on

orders

1. The Complaint

1.1. On 9 September 2014 the Real Estate Agents Authority (the Authority) received a complaint against Philip Adcock (the Licensee) from the Complainant.

1.2. The Licensee is a licensed Branch Manager under the Real Estate Agents Act 2008 (the Act)

and at the time of conduct was engaged by Diane Astle Realty Limited (the Agency).

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

1.4. The details of the complaint are that the Licensee did not submit the Complainant’s offer to the vendor of the Property, and that he refused to draw up the offer in writing.

1.5. The Complainant requested a remedy, being an honest explanation about what happened, an apology, and action taken by the Authority to ensure it does not happen again.

1.6. The Licensee responded to the complaint against him. In particular, the Licensee commented that at all times he was following the instructions of the vendor.

2. What we decided

2.1. On 1 October 2014 the Complaints Assessment Committee 301 considered the complaint and decided to inquire into it.

2.2. On 3 December 2014 Complaints Assessment Committee 301 was disestablished.

2.3. The complaint was referred to Complaints Assessment Committee 403 (the Committee).

2.4. On 7 October 2015 the Committee held a hearing on the papers and considered all the information that had been gathered during the inquiry.

2.5. The Committee found the Licensee has 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 was unsatisfactory conduct, which would reasonably be regarded by agents of good standing as being unacceptable, having breached Rules 5.1, 6.2, and 10.10.

The Licensee did not submit verbal offers to the vendors and would not put them into writing

3.2. The Complainant was acting on behalf of her son who wanted to purchase a property. The Property was advertised as “offers over $360,000” then subsequently marketed with a listing price of $360,000. On 5 August 2014, after viewing the Property, the Complainant’s husband made a verbal offer of $340,000 to the Licensee, which was declined and he was told that he must offer over $360,000. The Complainant then made a verbal offer of $360,000 which was not written up. The Complainant says that despite verbal offers being made, the Licensee did not get an offer put in writing and that they had to contact the Licensee to find out what was happening. She says they confirmed they wanted to put in an offer when all other offers were being presented and asked if it needed to be in writing. She says the Licensee told her that if the offer was accepted it would be drawn up.

3.3. The Licensee did not contact them about the offer and they saw an open home advertised for the weekend of 16-17 August. They contacted the Licensee and were told the Property was under offer but that he would call them if anything changed. On 25 August 2015, the Complainant contacted the owner of the Agency and was told by the owner that she could put in a backup offer. There was some confusion in getting the backup offer sent through to the Licensee and he did not take steps to forward it to the vendors. In the event, the Agency owner expedited matters and sent the offer to the vendors.

3.4. The Licensee submits that he did not draft an offer, and or, present it to the vendors as he was following the vendor clients’ instructions not to present any offers that were not over

$360,000. He maintains that he told the Complainant and her husband that no offers below that level would be written up or presented. He says that he told the Complainant and her husband repeatedly that the vendors would only consider offers over $360,000 and that an offer would have to be over $360,000 to be drawn up.

3.5. The Property was being sold as part of a deceased estate. One of the vendors has supported the Licensee, agreeing that they wanted offers over $360,000.00.

3.6. The Complainant in response, maintained that this was not conveyed to them by the Licensee and that had it been they could easily have slightly increased their offer to comply.

Application of Rules

3.7. Rule 10.10 requires that all offers in writing be submitted. The Licensee in this case is relying on the offer not having been put into writing to say it did not need to be submitted. Licensees are required by Rule 9.1 to act in the best interests of a client and in accordance with clients’ instructions, unless to do so would be contrary to the law.

3.8. But Rule 6.2 requires the Licensee to act in good faith and deal fairly with all parties. In failing to draw up the Complainant’s offer he failed to comply with that Rule. Once the Complainant had made it clear they wanted to make an offer it was incumbent on the Licensee to act fairly. The offer may have been below the vendors’ price expectations, but the Property had been advertised at that level. It was an offer at the asking price and it was reasonable for the Complainant to expect that it would be submitted to the vendor. If the offer was not to be written up because of instructions which he had from the vendors, then fairness required the Licensee to properly explain the position to the Complainant.

3.9. We have been provided with copies of numerous emails between the parties. Given that the Licensee says that he made the position clear regarding which offers would be presented, we find it strange that no mention at all is made in his emails of any requirement by the vendors

that offers needed to be in excess of $360,000 to be drawn up. We prefer the evidence of the Complainant that the Licensee did not clearly advise them of this requirement; as it seems logical, given their repeated attempts to get an offer to the vendor, that if he had clearly conveyed this requirement to them they would simply have increased the offer by a small amount to get it over the threshold. Therefore, we find that on the balance of probabilities it is more likely than not that the Licensee did not make it clear to the Complainant why he was not drafting an offer for them.

3.10. Even when the Agency owner had become involved the Licensee still inexplicable dragged his heels. When on the insistence of the Agency owner an offer was drawn up for the Complainant, confusion arose as to whether or not it was a multi-offer situation with more than one backup offer. The written offer was sent by the Complainant to the Licensee by email on 26 August. She chased him up about it on the 27 August, and in an email set out in detail how she saw the problems she felt she was having in getting her offer prepared and presented. Yet the Licensee still took no action to submit it or explain to the Complainant why this was not happening. The Complainant then emailed the Agency owner who took immediate action in replying and expediting the forwarding of the Complainant’s backup offer to the vendor representative. When she became aware that the offer still had not been presented, she arranged for it to be emailed to her and attended to the matter herself. It was not until 8.09pm on the 28 August that the Licensee emailed the Complainant to say the offer had been presented. In his response to the Committee, the Licensee appears to regard the involvement of the Agency owner as interference and to stand on the vendors instructions as a defense.

3.11. Rule 10.10 exists to protect both vendor and purchaser. We do not accept that a Licensee can always look to the vendors’ instructions as an excuse to refuse to draw up an offer. Nor is it proper practice or acceptable to avoid triggering Rule 10.10 by refusing to draft up an offer.

3.12. If the Complainants wished to pursue their offer (which we accept that they did) then the Licensee was obliged to draft it and submit it. In saying this we are not suggesting that all verbal offers, no matter how ill-thought, must be written up. There must be some room for common sense in these matters, but the Complainant’s offer was not a silly or vexatious one and was at the asking price. The Complainant was entitled to expect her offer would be presented. A licensee exercising the appropriate level of care and skill that Rule 5.1 requires, and acting fairly in accordance with Rule 6.2, would have taken steps to ensure that either the offer was presented or the Complainant was kept fully informed as to why it was not.

3.13. The Licensee also did his vendor a disservice. He appears to have made no effort to draw a better offer out of the Complainant and her family. We are left with the possibility that he had already decided which offer was likely to be successful and put no effort into trying to secure a better offer from the Complainant.

3.14. For these reasons we find the conduct of the Licensee was unsatisfactory and would be regarded as such by reasonable agents.

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.

4.2. The Complainant is to file submissions (if any) on what orders should be made within ten

working days from the date of this decision. These submissions, if any, will then be provided to the Licensee, with a timeframe for filing final submissions.

4.3. The Committee requires the CAC Administrator to obtain a record of any previous disciplinary decision in respect of the Licensee, 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. 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.

Publication

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

Signed

Susan D'Ath

Chairperson

For Complaints Assessment Committee 403

Real Estate Agents Authority

Date: 30 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 li- censee 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 5.1 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 9.1 A licensee must act in the best interests of a client and act in accordance with the client’s instructions unless to do so would be contrary to law.

Rule 10.10 A licensee must submit to the client all offers concerning the grant, sale, or other disposal of any land or business, provided that such offers are in writing.