Complaint No C06483 [2016] NZREAA 41 (8 March 2016)

Last Updated: 29 November 2016

Before the Complaints Assessment Committee

Complaint No: C06483

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

The Agency (XXXXXXXX)

Decision to take no further action

8 March 2016

Members of Complaints Assessment Committee: CAC401

Chairperson: Nigel Dunlop Deputy Chairperson: Alison Wallis Panel Member: Rex Hadley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 15 October 2014 the Real Estate Agents Authority (the Authority) laid a complaint against the Agency in response to a notification by the Agency that licensees in its branch (the Branch) may have breached the Real Estate Agents Act 2008 (the Act) or the Professional Conduct and Client Care Rules (the Rules) made under the Act.

1.2. The Agency is a licensed company agent under the Act.

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

1.4. The Authority’s complaint cited three respondents: the Agency and two licensees, licensee X

and licensee Y. Licensee X was a salesperson at the Branch, and licensee Y was its manager.

1.5. The concern notified to the Authority by the Agency was that the Property had been listed by licensee X and sold for $660,000 on 21 July 2014. On the same day, licensee Y was involved in its re-sale by the new owner for $760,000.

1.6. The rapidity of the re-sale and the difference in the two prices, raised questions of competency, fairness, and propriety with respects to licensees X and Y.

1.7. The two sales also raised the issue of whether or not the Agency had ensured that licensee X was properly managed and supervised in terms of section 50 of the Act, and whether overall the Agency had systems in place applying to the Branch to prevent unprofessional conduct by the licensees based there.

1.8. In response to the complaint, the Agency pointed to its own prompt response once it became aware of the sales, and to the thorough systems it has in place at all of its branches.

2. What we decided

2.1. On 1 December 2014 Complaints Assessment Committee 303 considered the complaint and decided to inquire into it under section 79(2)(e) of the Act. Complaints Assessment Committee 401 (the Committee) later took over the complaint.

2.2. On 2 March 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 in relation to the Agency. It earlier decided that the complaint in relation to licensees X and Y should be heard by the Real Estate Agents Disciplinary Committee.

2.4. This decision was made under section 89(2)(c) of the Act, and had regard to the wider provisions of both the Act and Rules.

3. Our reasons for the decision

3.1. It is notable that the Agency itself brought the conduct of licensees X and Y to the attention of the Authority. It undoubtedly had regard to its reporting obligations under Rule 7.2. It did so promptly, because the acting manager of the Branch only became aware of the issues surrounding the Property on 9 October 2014. It contacted the Authority on 13 October. The Agency thereby displayed a responsible attitude. It fully cooperated with the subsequent inquiry by the Committee. These displays of responsibility are consistent with an agency taking its management and supervision responsibilities seriously.

3.2. The evidence establishes that the Agency had in place policies and procedures around appropriate supervision and training. They were provided to the Authority. The evidence suggests that licensee Y was a “rogue” supervisor, and had engendered a particular culture at the Branch that was inconsistent with the Agency’s procedure, training , and expectations. When the Agency became aware of the issues, it took all reasonable steps to rectify them.

3.3. The Agency had ultimate responsibility to ensure that the licensees at the Branch were properly managed and supervised, in compliance with section 50 and Rule 8.3. There were failings in the Branch, but an agency should not be the subject of disciplinary findings under the Act and Rules where it has demonstrated that it has taken reasonable steps to prevent such failings. It should not be disciplined for the aberrant and unpredictable behaviour of its employees.

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 s111.

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).

5. Publication

5.1. At the Committee’s discretion, the decision will be published without the names or identifying details of the Agency, the Property, and licensees X and Y.

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

Nigel Dunlop

Date: 8 March 2016

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.

Section 50 Salespersons must be supervised

(1) A salesperson must, in carrying out any agency work, be properly supervised and managed by an agent or a branch manager.

(2) In this section properly supervised and managed means that the agency work is carried out under such direction and control of either a branch manager or an agent as is sufficient to ensure—

(a) that the work is performed competently; and

(b) that the work complies with the requirements of this Act.

The relevant provisions from the Real Estate Agents Act (Professional Conduct and Client Care) Rules

2012 are:

Supervision and management of salespersons

Rule 8.3 An agent who is operating as a business must ensure that all salespersons employed or engaged by the agent are properly supervised and managed.