Complaint No C15281 [2016] NZREAA 244 (20 December 2016)

Last Updated: 5 August 2017

Before the Complaints Assessment Committee

Complaint No: C15281

In the matter of

Part 4 of the Real Estate Agents Act 2008

Licensee: The Licensee (XXXXXXXX)

Decision to take no further action

20 December 2016

Members of Complaints Assessment Committee: CAC403

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

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 16 June 2016 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).

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

1.4. The details of the complaint are that the Complainant alleges:

(a) the Property was marketed as a deadline sale and the Licensee did not contact him as an

interested buyer to tell him the vendor was no longer taking offers;

(b) his interest in buying the Property was not communicated to the vendor; and

(c) the Licensee did not enquire as to the amount he was prepared to offer to buy the

Property.

2. What we decided

2.1. On 19 September 2016 the Complaints Assessment Committee (the Committee) considered the complaint and decided to inquire into it under section 79(2)(e) of the Act.

2.2. On 1 November 2016 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.

3. Our reasons for the decision

3.1. The Committee concluded that no further action should be taken with respect to this complaint:

Background:

3.2. This complaint arises in the context that the Complainant attended an open home at the Property on the 15 May 2016 and expressed his interest as a prospective buyer, however was unsuccessful in purchasing it. He said he was prepared to pay $380,000 which was $20,000 more than it eventually sold for. He believes he was not communicated with fairly during the process, which ultimately left him without a property.

3.3. On 16 May 2016 the Licensee phoned the Complainant to see whether he was interested in the Property, and the Complainant told the Licensee he was interested and would call the

Licensee to write up an offer once his finances were confirmed. The Complainant said the

Property was for sale “by deadline” (no specified deadline date appears in the evidence).

3.4. The Complainant said he called the Licensee on Sunday, 22 May 2016, to advise he wished to write up an offer for the Property and was told by the Licensee that the vendor did not wish to receive any more offers. The Complainant said he was surprised as the deadline had not yet passed. The Licensee apologised for not letting him know earlier.

3.5. The Complainant said he was prepared to offer $380,000 for the Property; however it sold for

$360,000, so the vendor missed out on $20,000.

Licensee’s response

3.6. The Licensee said that an initial offer (offer one) was accepted by the vendors on the 13 May

2016 for $360,000, which was subject to the sale of the buyer’s property and included a 5 day

cash-out clause.

3.7. On the 15 May 2016 the Complainant attended an open home at the Property and completed the register, and the Licensee verbally advised the Complainant the Property was under offer. Another party at this time indicated they wished to make an offer and a contract was prepared. The Licensee said all interested parties were advised of the pending new offer, including the Complainant, who indicated he did not want to make an offer at that point however he said he may get back to them in the next couple of days.

3.8. A second offer (offer two) was accepted by the vendors on the 17 May 2016 for $360,000.

3.9. The Licensee said he again called the Complainant on 17 May 2016 and left a message on his answerphone.

3.10. On the 19 May 2016 the second offer’s conditions were satisfied. The contract was only waiting on the first offer to fall over and then the Property would be sold.

3.11. On 22 May 2016, when the Complainant contacted the Licensee, the Licensee said he did not tell the Complainant that the house was currently under offer at $360,000. He said he explained to the Complainant that any offer from him would be treated as a back-up offer. The Complainant was not keen on putting a back-up offer on the Property. The second offer had been accepted and was only waiting on the first offer to fall over, as the conditions in the second offer had been met.

3.12. It was not a “Deadline Sale” it was priced “By Negotiation”. The Complainant knew well in advance that the Property was under offer and there was another offer going in. He said he would advise us in the next 24 hours.

3.13. The Licensee said he had tried numerous times to contact the Complainant with no response and he did not apologise for not getting back to him sooner.

3.14. On the 25 May 2016 offer two was satisfied, with offer one failing to meet the conditions in time.

Complainant’s response to Licensee’s response

3.15. On 12 October 2016 the Complainant said he was provided with a copy of the Licensee’s written response and in turn responded by saying:

3.16. On the 13 May 2016 he said when he visited the Property he accepts he was advised of offer one, however rejects he was ever informed of offer two.

3.17. On the 15 May 2016 he said he was contacted by the Licensee and said he would be interested in making an offer when he had arranged finances, and requested to be kept up to date if there were any changes to the circumstances of the Property.

3.18. On 17 May 2016 he said he received a missed call from the Licensee, however refutes that a voice message was left for him. He provides no explanation as why he did not return the Licensee’s call.

3.19. On 22 May 2016 he said he contacted the Licensee and explained he would like to make an offer and was informed the vendors were not accepting any further offers. When he was asked why, the Licensee’s response was that “They have already received too many ”. He said at no point did he have the opportunity to discuss the nature of his offer and was not asked the value of the offer. Had this been done he would have had the opportunity to discuss further; he would have been able to make it clear that he was willing and able to offer

$380,000 for the Property. The Complainant said the Licensee apologised for not getting back

to him.

4. Our findings

4.1. The Committee’s reason for not inquiring into the complaint is, in the course of the investigation of the complaint, it appears to the Committee that, having regard to all the circumstances of the case, there is nothing in the complaint before us that would support an allegation of any wrongdoing by the Licensee.

4.2. On 1 November 2016 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

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

4.4. 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 and section 72 (Unsatisfactory Conduct) or section 73 (Misconduct) of the Real Estate Agents Act

2008.

(a) Rule 5.1. - A licensee must exercise skill, care, competence, and diligence at all times

when carrying out real estate agency work.

(b) Rule 6.1. - A licensee must comply with fiduciary obligations to the licensee’s client.

(c) Rule 6.2. - A licensee must act in good faith and deal fairly with all parties engaged in a transaction.

(d) 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.

Burden of Proof lies with the Complainant

4.5. In reaching a decision and making a finding the Committee has to look carefully at the evidence before it and then come to a decision based on our assessment of what we believe is more likely than not to have occurred, or in other words, on what we see as the balance of probabilities in this case.

4.6. The threshold has been considered by the Disciplinary Tribunal in its decision: Hodgson v CAC

& Arnold [2011] READT03. In that decision the Disciplinary Tribunal said that the burden of proof to establish a complaint rests with the complainant. The consequence of this is that unless we are able to form a view that what the complainant alleges is more likely than not what happened, or if we believe that the conduct complained of does not reach the threshold set out in section 72 of the Act, we have to dismiss the complaint.

4.7. From the evidence put before it, the Committee has established that the Complainant had ample opportunity to make an offer on the Property. When he viewed the Property on the

15 May 2016 he was made aware by the Licensee that an offer was already in place with a 5 day cash-out clause. At that time another party indicated they wished to make a back-up offer (offer two) and a contract was prepared. The Licensee said all interested parties were advised of the pending new offer, including the Complainant. He said he contacted the Complainant by telephone and text and left messages but he did not respond.

4.8. The Complainant acknowledges in his statement that the Licensee contacted him via phone on Monday, 16 May 2016 at 7.40pm, to enquire if he was interested. He replied to say that he would be in contact to make an offer on the Property once he had confirmed his finances.

4.9. The Committee questions that on seeing he had received a missed call from the Licensee and if he was interested in buying the Property, why did he not respond to the Licensee’s phone call.

4.10. The Complainant then called the Licensee on the 22 May 2016 at 1.20pm, to make an offer on the Property, and was advised that a second offer had gone on the Property and it was a clean offer. All the conditions had been met and it was just waiting for the first offer to be at an end. He was offered the opportunity to go in as a back-up offer, he said he would think about it and come back, which he never did. It would have been immaterial for the Licensee to enquire as to the level of the offer as the second offer was unconditional in its own right.

4.11. The Complainant was well aware that offer one was on the Property. If he was prepared to make an offer, why did he not make a back-up offer at that time? He stood the risk by waiting until he confirmed his finances that another offer may come in, and that is what happened. The Complainant never contacted the Licensee after the Licensee’s phone call to him on Monday, 16 May 2016, until Sunday, 22 May 2016, to express he still had interest in the Property and wanted to make an offer. By this time the back-up offer was in place and was just waiting for the first offer to lapse. Even if the Complainant had made a back-up offer at $380,000, offer two would have confirmed their agreement as unconditional and the Complainant’s offer would have lapsed.

Property Law Act 2007

4.12. Section 24 - Contracts for disposition of land not enforceable unless in writing

(1) A contract for the disposition of land is not enforceable by action unless - (a) the contract is in writing or its terms are recorded in writing; and

(b) the contract or written record is signed by the party against whom the contract is sought to be enforced.

4.13. Under the Property Law Act 2007, section 24 provides that the sale of land is not enforceable unless it is in writing, therefore the Complainant did not miss out on buying the Property as he did not submit an offer in writing.

4.14. Accordingly, the Committee have formed the view that on the balance of probabilities the Complainant has not proved that the Licensee failed to keep him informed and communicate with him and that he was given every opportunity to make an offer in writing.

5. Your right to appeal

5.1. 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).

5.2. For further information on filing an appeal, read Guide to Filing an Appeal at M inistr y of

J ustice-Tr ibuna ls (www.justice.govt.nz/tribunals).

Publication

5.3. 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 Licensee and any third parties.

5.4. 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.

5.5. 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

Sandra Wilson

Date: 20 December 2016

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

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.

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.