Complaint No C06416 [2015] NZREAA 357 (15 December 2015)

Last Updated: 8 October 2016

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

And

In the Matter of Complaint No: C06416

In the Matter of The Licensee

License Number: XXXXXXXX

Decision of Complaints Assessment Committee

Decision to take no further action

Dated this 15th day of December 2015

Members of Complaints Assessment Committee: CAC 406

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 31 October 2014 the Real Estate Agents Authority (the Authority) received a complaint against the Licensee from the Complainants.

1.2. The Licensee is a licensed salesperson under the Real Estate Agents Act 2008 (the Act), working for the Agency at time of conduct complained of.

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

1.4. The details of the complaint are that the Complainants were looking to purchase the Property listed by the Licensee in October 2014. The Complainants are also licensees. The Property went to a multi-offer presentation and the Complainants allege that the Licensee insisted on being present when their offer was presented to the vendor by another licensee, Ms. W of agency A.

1.5. The Complainants also allege the Licensee then attempted to pressure the vendors and adversely affect their offer, by advising the vendors to not accept the Complainants’ offer but to further consider an offer from another prospective purchaser, Ms. B. The Complainants allege the Licensee told the vendor her “purchaser (Ms. B) has changed and cut out all their conditions and they were angry and may sue us.” The vendors were Chinese and the Complainants allege that upon being told this they immediately became tense. Ms. W reported to the Complainants that “[the Licensee’s] use of scare tactics had had an effect. The clients were now very uneasy.” Ms. W allegedly told the Complainants that she felt that if she had insisted at that stage that the Licensee left the room, the vendors would have become even more unsettled.

1.6. The Complainants believe that on seeing their offer, the Licensee sought a higher offer from her buyers. The Complainants admit they were also given an opportunity to increase their offer. The Licensee’s buyers had the higher offer in the end and were the successful purchasers.

1.7. In particular, the Complainant advised that:

1. The Licensee applied undue pressure on the vendor during a multi-offer presentation;

b) The Licensee was unfair to the Complainants.

1.8. The Complainant requested a remedy, being:

• That serious action is taken against the Licensee and her license is suspended;

• However, the Complainants have also commented that they were thinking of withdrawing the complaint as they had “moved on from this issue” and bought another property.

1.9. The Licensee responded to the complaint against her. The Licensee denies that she applied undue pressure on the vendor or that she treated the Complainants unfairly.

1.10. In particular, the Licensee commented that:

1.11. The Licensee claims that her husband, Mr. X, was called by Complainant One in October

2014, and asked for a price indication on the Property. Mr. X advised it was around

$900,000. The Licensee was asked to provide documentation to the Complainants and she asked her Personal Assistant, Mr. C, to email it to them.

1.12. On 22 October 2015, Ms. W called her to advise that she had an offer on the Property but did not say it was from the Complainants. The Licensee rang the vendor so that the offer could be presented as soon as possible. The vendor was available at 2pm on the same day and she discussed the possibility of Ms. W meeting him then without the Licensee being present or meeting after 10pm with both of them present. It was decided that Ms. W would present the offer to the vendor at 2pm at the office (office A). At this meeting Ms. W presented the offer of $820,000 from the Complainants to the vendor but he did not countersign as it was “considerably below his expectations”. A friend of the vendor was present to interpret.

1.13. Later on 22 October 2015, other purchasers, Mr. E and Ms. F, emailed to advise that they wanted to make an offer. At this point, the Licensee instructed her PA to email everyone who had been through the Property to see if anybody else wanted to make an offer. All offers were to be presented at 2pm on 23 October 2014.

1.14. Late on 22 October offers from Mr and Ms. S, Mr. D, and Mr. E and Ms. F were received. All parties were then told that it was a multi-offer situation and were required to complete the appropriate form. Before the deadline of 2pm there was some email discussion as to who would be managing the multi offer presentation, and it was agreed by the Principal of the Agency that she would allow Mr. Y, the Manager of Agency office A, to present the offers at office A, as this location was more convenient for the vendor.

1.15. Early on 23 October, the Licensee received a call from Ms. B who wanted to view the Property. After she had viewed the Property, she called and said she wanted to make an offer before the 2pm deadline. It was arranged that due to the tight timeframe she would go to office A and the Licensee would meet her there to write up the offer.

1.16. The Licensee claims that at 2pm on 23 October 2014, Mr. Y presented the four offers to the vendor “as per [the Agency] protocol”; three were from the Licensee’s customers and one was Ms. W’s customer. Two of the offers were rejected because they were too low and the other two offers were still not at an acceptable level to the vendor, being a finance conditional offer of $896,000 from Ms. B and an unconditional offer of $854,500 from the Complainants.

1.17. The Licensee states that normal protocol would suggest that the vendor work with the best offer, Ms. B’s, to the exclusion of the others; however in this case the Licensee alleges she was phoned by Mr. Y who said that although the vendor preferred the offer from her customer, he wanted the offer unconditional. The Licensee alleges Mr. Y asked if she “could (sic) my offer unconditional”. Mr. Y also claimed that the vendor also indicated that the other customer, the Complainants, despite being $41,500 less although unconditional, would be given an opportunity to increase their offer.

1.18. The Licensee claims that when she had asked Ms. B to make her offer unconditional, Ms. B

was concerned the other party might know the level of her offer. The Licensee explained

that she did not know what the other offer was and that the process was confidential, but the purchaser remained concerned as the other purchaser was a salesperson in office A.

1.19. Mr. Y was not available for the remainder of the day or the next day due to personal circumstances. It was agreed with the Principal’s approval that Ms. W and the Licensee would re-present the offers to the vendor at office A. The Licensee understood that throughout the process Ms. W was acting as a salesperson and agent for the Complainants.

1.20. Those present at the meeting of 23 October 2014, were the Licensee, Ms. W, Ms. W’s PA to interpret, the vendor, and a friend of the vendor who was interpreting for him. Ms. W presented the Complainants’ unconditional offer of $900,000 and the Licensee presented Ms. B’s unconditional offer of $896,000. The Licensee alleges that “at this point, having now sighted the other offer and having noticed their offer had increased by $45,500 and was now only $4000 more than my customers offer, I became nervous and voiced my concerns about the perception and the potential of being sued by my customer.” Given Ms. B’s earlier comments regarding the Complainants’ position at office A (agency A) the Licensee was “concerned about how that might be perceived by my customer as ‘inside knowledge’.”

1.21. The concern arose because the Complainants are themselves licensees. The Licensee felt that for “fairness and to avoid any doubt” both parties should be approached again to ensure they had made their best offers. The vendor instructed that he would accept whichever offer was the best. At this point the Licensee alleges that Ms. W spoke to the Complainants and told the vendor that if he did not sign the Complainants offer immediately they would withdraw it. The vendor did not respond to this threat.

1.22. The Licensee claims that the vendor then instructed her to meet with her purchaser, Ms. B, as arranged. The Licensee told Ms. B that unless she increased her offer she would not be buying the Property. Ms. B increased her offer to $918,000.

1.23. When the Licensee returned to office A later that day, she and Ms. W met with the vendor again. Ms. W had an increased offer from the Complainants. “At this point [Complainant One] came into the office saying that it was unfair that I should be there.” The Licensee asked him to leave as he was a purchaser. The Licensee agreed that she would also leave and allow Ms. W to present both offers “even though I saw her as a salesperson and not a manager in this situation”. This is a reference to the Agency’s protocol for multi offer presentations. Ms. W presented the offers and the vendor accepted Ms. B’s unconditional

$918,000 offer.

1.24. In summary, the Licensee states that when the four offers were presented on 23 October by Mr. Y, the best offer should have been negotiated with, as per the multi-offer form, and as Ms. B’s offer was $45,500 more (although conditional) she feels that the vendor would have seen this as the best offer. This offer should have been countersigned at an acceptable level and the finance clause crossed out. She would then have taken the counter-offer to Ms. B and normal negotiations would have followed. Had this occurred the complaint against her would not have arisen. However, with an abundance of caution and to be fair to both parties the two perspective purchasers with the two higher offers were given a further opportunity to increase their offers as their offers were so close. The vendor choice the higher offer, Ms. B’s.

2. What we decided

2.1. On 31 October 2014 the Real Estate Agents Authority (the Authority) received a complaint against the Licensee from the Complainants.

2.2. On 11 December 2014 the Complaints Assessment Committee 301 considered the complaint and decided to inquire into it under section 79(2)(e) of the Act.

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

2.4. The complaint was referred to Complaints Assessment Committee 406 (the Committee).

2.5. The Committee have considered the original complaint afresh and made a decision to inquire into the complaint.

2.6. On 20 November 2015 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

2.7. The Committee has decided to take no further action on the complaint.

2.8. 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 the Committee considered rules 6.1, 6.2, 6.3, and 9.2.

3. Our reasons for the decision

The Committee concluded:

3.1. The Committee is not persuaded that the Licensee breached rule 9.2 by engaging in any conduct that would put a prospective client, client, or customer under undue or unfair pressure during a multi-offer presentation.

3.2. The Committee is not persuaded that the Licensee breached rules 6.2 and 6.3 by failing to act in good faith and deal fairly with all parties engaged in a the transaction.

Undue or unfair pressure

3.3. The Complainants allege that the Licensee applied undue pressure on the vendor during the multi-offer presentation. The Committee has considered this allegation and all the evidence put before it.

3.4. The Committee notes that the multi-offer process referred to as the Agency’s protocol for multi offer presentations, is not a compulsory or legislated process but it may reflect good or even best practice. However, regardless of whether or not an agency has a multi-offer process in place, rule 6.2 places a general obligation on licensees to act in good faith and deal fairly with all parties engaged in transactions. Further, rule 9.2 requires a licensee to not engage in any conduct that would put a prospective client, client, or customer under undue or unfair pressure.

3.5. Having considered all the evidence before it, the Committee is not persuaded the Licensee

did exert any undue or unfair pressure in this instance. The Licensee claims that in terms of the comments she allegedly made, she was referring to a perception of fairness given the Complainants were licensees themselves and were employed by an involved agency. Further, the Complainants’ offer, while originally lower than Ms. B’s, was increased by $45,500 and became only $4000 more than Ms. B’s offer. The Licensee claims that she rightly voiced her concerns about the perception and the potential for being sued by Ms. B. She then suggested to the vendor that he choose the highest offer or they go back and get both purchasers to confirm they had given their best offers. The ultimate choice rested with the vendor and there is no evidence before the Committee that the vendor felt unduly pressured while making this choice.

3.6. While the Complainants may have concerns about the Licensee’s presence at the first meeting on 23 October 2015, their representative, Ms. W was also present. Further, at the second presentation on 23 October only Ms. W was present. The best price was ultimately obtained for the vendor (who has not complained about the Licensee’s conduct) and the Complainants were given the opportunity to increase their offer (as they would have been had they been selected by the vendor to negotiate with) and there is no suggestion that their final offer was disclosed by the Licensee.

3.7. The Committee has also considered the evidence of Ms. W who was present when the alleged conduct occurred. Ms. W confirms the Licensee’s evidence as to how the meetings of

23 October 2015 were arranged. Ms. W also confirms that Mr. Y suggested both salespeople went away to see if they could achieve higher and cleaner offers from their buyers. Ms. W also confirms that Mr. Y was unable to re-present these offers the next day so she was asked to step in.

3.8. Ms. W submits that at her first meeting at office A on 23 October 2014, she introduced herself to the vendors. The Licensee was also present to go through the introduction formalities. Ms. W had asked for a Chinese salesperson from office A to sit in in case interpretation was required. The two purchasers had each signed multi-offer forms. Ms. W also explained that one of the offers was from a real estate salesperson and all the legal documents and forms had been signed, and asked did they understand that if this party was successful, under the Act they were required to get a registered valuation.

3.9. Ms. W claims that the Licensee then jumped in and said ‘I don't know what the other offer is, however, I may be able to get you more money if the other offer is higher’ and more importantly, she then made the statement 'this purchaser has changed and cut out all their conditions and they were angry and may sue us'. Ms. W then makes the assumption that because the vendor was “of a different culture”, he became tense and said 'no no, wait wait' and became very uneasy. At this point, the vendor insisted on viewing both offers immediately. By doing this, Ms. W claims that the Licensee became aware of the level of both offers.

3.10. Ms. W admits the vendor wanted the Licensee to go and get more money from her purchaser. Ms. W claims she attempted to explain to the vendor that she understood they were there to choose an offer from the two offers that were on the table and that the multi- offer form protected them from any further come-back. Ms. W sat with the vendor and explained this was a very unusual situation and she believed from what Mr. Y had said to her that she was there to present two offers in a multi-offer situation and at no point would they be going back to the purchasers for more money. However the vendor was unmoved.

3.11. The vendor did agree however, that both purchasers needed to be given an opportunity to increase their offers. Ms. W claims she then had an undertaking from the vendor that “this will be the last time” and the vendor said he would choose one offer immediately and sign it off that evening.

3.12. At a further meeting later that night, the Licensee returned with an increased offer. The Complainants also increased their offer. Both the Licensee and the other salesperson (whose offer was on the table) wanted to sit in on the discussions. Ms. W claims she said no and asked them both to leave confirming that the Licensee was not present at this last meeting with the vendor. The offers were presented to the vendor by her and they were only $2,000 apart. The vendor made a decision and selected the higher offer, Ms. B’s, and all documentation was signed off.

3.13. Ms. W claims that her concern about the whole process was that the Licensee undermined it by insinuations of being sued and using scare tactics to advance her position, creating unease, distrust, and confusion in the vendor. Ms. W also claims that while she was pleased that the vendor achieved a really good result, the Licensee’s conduct was “appalling” and she feels it was driven by greed and not the vendor’s ultimate result.

3.14. Ms. W essentially alleges that the vendor became uneasy and requested that the agents returned to their clients for better offers because of the Licensee’s behaviour. It seems more likely on the evidence before the Committee that the vendor was simply attempting to obtain the best price and he expected his listing agent, the Licensee, to assist him in this endeavour. Ms. W’s position at the meeting however appears more tenuous. Ms. W appears to be implying that she was merely replacing Mr. Y’s role, a licensed Branch Manager with no financial involvement as referred to in the protocols, rather than her actual position, acting as a salesperson and agent for the Complainants.

3.15. Ms. W implies that she was the independent person in the room and states that the Licensee’s “lack of knowledge of the process and her ethics in using scare tactics was appalling.” On the evidence before the Committee it appears much more likely that Ms. W has forgotten her partisan role in the presentation of these offers and her evidence must be considered in this light.

3.16. There is no evidence before the Committee that the vendor felt any undue pressure from the Licensee when determining what offer to accept or any evidence that would support a reasonable person coming to the conclusion that the vendor was subject to such pressure. The Committee does not accept the evidence of Ms. W in this regard. This part of the complaint is not upheld.

Failed to act in good faith and deal fairly with all parties.

3.17. The Complainants allege that the Licensee failed to act in good faith and deal fairly with their offer. Again the Committee has considered all the evidence in this matter. The Committee understands that the Complainants were disappointed at not securing the Property; however the Committee does not accept that there is any evidence that this disappointment resulted from any failure by the Licensee.

3.18. Again a review of the evidence, and the Complainants in their complaint rely heavily on the evidence of Ms. W, which simply does not support the Complainants allegation for the reasons outlined above. The vendor is entitled to take what steps he chooses to obtain the

best price. The Licensee is required to assist him in this, while taking account of her ethical obligations to all parties. There is no evidence before the Committee that she failed to deal fairly with all parties in this matter.

3.19. Again the Committee understands Ms. W’s disappointment in failing to secure the Property for her clients, however, again this disappointment does not translate into any failure on the Licensee’s part. This part of the complaint is also dismissed.

4. 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 (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 ).

5. Publication

5.1. 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 Licensee, and any third parties.

5.2. 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.

5.3. 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

Bernardine Hannan

Deputy Chairperson

For Complaints Assessment Committee 406

Real Estate Agents Authority

Date: 15 December 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 6.1 A licensee must comply with fiduciary obligations to the licensee’s client.

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.