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New Zealand Real Estate Agents Authority |
Last Updated: 21 June 2018
Before the Complaints Assessment Committee
Complaint No: C18079
In the matter of
Part 4 of the Real Estate Agents Act 2008
Licensee Martin Cooper (10016917)
The Agency: Cooper & Co Real Estate Limited t/a Harcourts Cooper
& Co (10020384)
Decision finding of unsatisfactory conduct - asking for submissions on orders
5 October 2017
Members of Complaints Assessment Committee: CAC409
Chairperson: Jane Ross
Deputy Chairperson: Peter Brock
Panel Member: Josephine O'Donnell
Complaints Assessment Committee
Decision finding unsatisfactory conduct - asking for submissions on orders
1. The Complaint
1.1. On 20 March 2017 the Committee on its own initiative decided to inquire into the conduct of
Martin Cooper (Licensee Cooper) and Cooper & Co Real Estate Limited t/a Harcourts Cooper
& Co (the Agency) pursuant to section 78(b) of the Real Estate Agents Act 2008 (the Act).
1.2. Licensee Cooper is the eligible officer of the Agency.
1.3. The Committee advised Licensee Cooper the issue being investigated was how he and the Agency fulfil the obligation for salespersons to be “properly supervised and managed” by an agent or branch manager1 in relation to 3 cases (the specified cases).
1.4. The specified cases are 3 complaints. In 2 complaints, the Committee made findings of unsatisfactory conduct against licensees employed by the Agency and in 1 complaint decided to take no further action against a licensee.
1.5. The Committee took no further action against Licensee Cooper and the Agency in each case because it was commencing this separate inquiry into the supervision issue(s).
1.6. The specified cases are:
a) Complaint 1– date of decision 26 January 2017; b) Complaint 2– date of decision 31 January 2017; c) Complaint 3– date of decision 29 March 2017. The specified cases
1.7. A summary of the relevant facts, issues and questions for the specified cases follows:
Complaint 1
a) The complaint was against two licensees who held salespersons licenses. One of the licensees was the auctioneer. There were several grounds of complaint. That non- consented work was not disclosed, that the complainants were not provided with appropriate price feedback and that the licensees did not follow instructions not to lower the reserve. The licensees worked at a branch of the Agency.
b) The Committee took no further action on the complaint because no ground of complaint was upheld.
d) Licensee Cooper advised an auction manager “oversees auctions”.
1 Section 50 of the Act and Rule 8.3 Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 (the Rules)
g) The Committee was concerned that a non-qualified sales manager appeared to be responsible for the supervision and management of salespersons contrary to section 50 of the Act and Rule 8.3.
Complaint 2
a) There were two findings of unsatisfactory conduct against the licensee. She gave incorrect advice to prospective purchasers about a cross lease title and had not taken all reasonable steps to clarify the status of a defective drainage notice. A statement that the defective drainage notice was rectified was not justified on the information known to the licensee. The licensee worked at a branch of the Agency.
b) Licensee Cooper identified licensee Y as the sales manager for this branch of the Agency .
Licensee Y only held a salespersons class of licence.
d) The Committee was concerned that a non-qualified sales manager appeared to be responsible for the supervision and management of salespersons contrary to section 50 of the Act and Rule 8.3.
Complaint 3
a) There were six separate findings of unsatisfactory conduct made against the licensee.
The Committee described the unsatisfactory conduct as high level and cumulatively at the very top end of unsatisfactory conduct cases. It considered the conduct to be not seriously incompetent by a narrow margin.
b) The licensee held a signed agreement for sale and purchase (ASP) and offered to destroy it if the purchaser contacted her before an agreed deadline. The licensee allowed herself to be in a conflict-of-interest situation and to mislead the purchaser such that the purchaser believed she was looking after his interests. The licensee failed to properly explain the removal of a building report condition from the ASP (prior to signature) such that the purchaser believed the ASP was still conditional on a building report. The licensee misled the purchaser as to the extent of defects with the property and cost of remediation and did not advise him to seek updated legal advice before he signed a final version of the ASP. The ASP was a drafting mess.
d) Questions to elicit information about supervision of the licensee were put to Licensee Cooper but he failed to respond in a timely manner and the Committee decided to incorporate the supervision issue into this complaint.
1.8. Licensee Cooper responded to the complaint. He provided information generally about supervision and information in response to the Committee’s questions relevant to the specified cases.
General – supervision and management
1.9. Licensee Cooper provided information about the structure of the Agency. A structure diagram was provided. It identifies Licensee Cooper as the managing director and licensee Z as
auction director/auctioneer. There are several other managers outside of the branch structure such as an operations manager, a new talent development manager, a relationship manager and a human resources advisor. A manager is identified for each branch office. Most of the identified managers have REINZ or AREINZ membership/status.
1.10. Licensee Cooper also provided information about procedures and protocols to inform and educate new salespersons and designed to reduce the risk of mistakes and breaches of the Act and Rules (passive supervision). In particular:
a) New licensees receive an induction pack which includes the names and contact details of all agency employees. This assists them to “... contact peers and seniors to discuss any issues that arise, as they arise”.
b) The induction process includes referring new licensees to the Agency policy and procedure manual (the manual) which contains information about sales meetings, training and the Agency practice for listing a property, making disclosures and drafting an ASP.
d) 80 days after the engagement of a new licensee the licensee must meet with Licensee Cooper. At the meeting confirmation is sought that the licensee is receiving “... the necessary supervision support.” Licensee Cooper makes an assessment as to the level of supervision required in the future.
1.11. Licensee Cooper advises that where a licensee has been licensed for less than six months the “... line manager/sales manager/supervisor will typically hold a branch manager or agents licence”.
1.12. Licensee Cooper also provided information about other passive supervision within the
Agency:
a) The manual (which is available to all licensees) is a living document which is constantly updated such as when relevant High Court and NZREADT decisions are issued.
b) Licensee Cooper convenes and attends a top achievers’ meeting approximately every six weeks. This is an open and safe forum for discussing any concerns this group sees arising.
c) He also attends managers’ meetings every two weeks.
1.13. Licensee Cooper described training in the Agency in the following way:
a) Training sessions/general sales meetings are held at least every fortnight.
b) His expectation is that licensees attend at least 10 training sessions per year.
d) General training sessions are often supplemented by a TAD talk which “... is typically a
one hour session focusing on a particular issue which we have identified as requiring some specific attention”.
1.14. Licensee Cooper described supervision generally within the Agency in the following way:
a) Managers have an open door policy.
b) Management is always available to answer concerns and assist licensees.
c) Supervision and assistance is available from senior sales consultants.
d) The management team he has in each office “... is responsible for the day to day running of the office.”
e) He has established a structure that ensures “... our licensees have the opportunity and confidence to contact section 50 qualified agents/managers if they have any questions or concerns and... I have experienced people who maintain regular contact with Licensees (day to day, or at least several times a week) to check on how they are
performing/maintaining their practices.”
f) Branch sales meetings are held each week.
g) “We certainly review sale and purchase agreements post signing...we also look at them before signing if the Licensees have practiced for less than 6 months, with less regularity but from time to time for Licensees with more experience and seldom with very experienced Licensees...”
1.15. It is Licensee Cooper’s understanding that when the Act changed in 2008 removing the requirement for a branch manager in each office “... a branch could be ‘managed’ by a wider category of people.” Further, it is his understanding “... that a branch could be managed by a wider variety of people and therefore that I could focus on skill sets rather than specific qualifications. I recognise that there has to be a structure in place whereby people with the proper qualifications are governing the process but my understanding was that this governance could now be undertaken at a higher level”.
1.16. He appoints people as managers who exhibit the necessary skills to do the job and he has worked with people “...with what might be deemed the necessary qualifications who I have not and would not be happy with undertaking a manager’s role”.
1.17. Licensee W who manages another branch of the Agency (and had a salespersons class licence at relevant times) as the sales manager is also a shareholder of a different office of the
Agency and he “...has successfully overseen these offices in which very few complaints arise. He has been a very effective manager. Licensee Z worked closely with him in overseeing any issues that need to be worked through.”
1.18. Another branch office of the Agency is managed by licensee V who has a salespersons class licence with “...Licensee U providing specific assistance in terms of supervision”. Another branch office of the Agency is “...overseen by [the administrative office]”.
The specified cases
Complaint 1
1.19. Licensee Cooper described licensee X as “... the sales manager overseeing Licensee T” and acknowledged he had a sales person class of license.
1.20. He described licensee X as conducting regular meetings with salespeople, taking sales meetings and being responsible for reviewing LIM and titles. Licensee X met with the complainant and then contacted licensee Z to discuss how to deal with the complaint.
1.21. During its investigation into Complaint 1Licensee Cooper advised the Committee “I have had instructions from the REAA stating that if I have effective Branch or Sales Managers in my offices I have personally met the supervision requirements of the legislation”. The
Committee inferred this to mean Licensee Cooper had written advice from the REAA and that advice was to the effect that supervision could be adequately carried out by managers who did not have an agent or branch manager class of license. He was asked to provide a copy of the instructions he was referring to.
1.22. By way of clarification Licensee Cooper says the REAA advice was communicated to him by licensee Z who had spoken with the REAA (who he referred to as speaking with the head of the REAA at the relevant time) during a Harcourts business owners meeting when licensee Z had asked him about how a business owner licensee could be protected from being added to a complaint against a licensee. The advice was along the lines that if there was an effective manager in the office that should stop a complaint from being able to include the licensed agent.
Complaint 2
1.23. Licensee Y is the branch manager. She described her role in the following way:
a) She is the sales manager.
b) She supervised Licensee M.
d) She attended weekly one-on-one meetings with Licensee M- to discuss the subject property at that time and all properties the licensee was marketing.
e) She has an open door policy as well, and Licensee M did seek her out on several occasions to talk about issues that arose during the sale process.
g) As well as supervising Licensee M she supervised other licensees involved in the sale of the property.
h) When the purchaser raised concerns she spoke with him on more than one occasion and when she could not resolve his concerns she asked Licensee Cooper to step in.
1.24. On the structure diagram licensee Y is identified as “Manager ”
1.25. Licensee Cooper was invited to provide a job description for Licensee Y. He advised her main focus was “...growth and prosperity of the office and its team members...” and she was responsible for “nurturing” and “Nourishing and encouraging new members” as well as working alongside top achievers to “...provide guidance, assisting and coaching whenever required”. He summarised her role as “...support and assistance to the sales people...”
1.26. He said there were approximately 48 sales consultants in the branch office and advised the number of years’ experience of each licensee and, in response to a question about how many were qualified agent/branch managers, identified five licensees with AREINZ qualifications.
1.27. He advised he was involved in the management and supervision of the branch office by attending the office for approximately 2 to 3 days per month. He said there was a team of people monitoring “...the Licensee’s activities: Licensee Z, Licensee Y and Licensee U”.
1.28. In response to a specific question about how salespersons are supervised in the branch office
Licensee Cooper said:
a) There is an open door policy,
b) There are weekly sales meetings.
c) There are approximately 10 group sales meetings throughout the year.
d) The management team (Licensee Y/Licensee Z/Licensee U/Licensee Cooper) “...are always available to answer concerns and assist the Licensee...” with listing, writing offers negotiating contracts, reviewing LIMs, reviewing and advising on auction documents and titles.
e) Supervision and assistance is also available from senior salespersons.
Complaint 3
1.29. As outlined earlier in this decision there were six findings of unsatisfactory conduct against licensee S. Her assistant licensee R was not investigated but his conduct had relevance in the circumstances.
1.30. What Licensee Cooper has said about management in the office, when giving evidence about Complaint 2, also applies as the licensees were employed by the office where licensee Y is the manager.
1.31. Licensee Cooper described licensee Y as the “... overseeing sales manager”. When asked if she was a REAA qualified agent or branch manager he advised she had recently completed her AREINZ qualifications. He also said she had “... close support and guidance from Licensee Z” and licensee Y “... was responsible for supervising the Licensees S and R at the time these complaints arose on the basis that she would refer any issues or concerns to Licensee Z or me” and Licensee Z “attends the office on average every second day”.
1.32. He also said licensees R and Licensee S are expected to attend weekly sales meetings, that there was regular phone contact between them and licensee Y and licensee Y had advised him the licensees “... frequently contact to discuss issues and in particular issues such as property titles and LIMs ...” and they were talking to her most days.
1.33. He says Licensee Z was involved in supervising the licensees because he knew a property viewing was taking place and both licensees spoke to him before taking a buyer through the property and “In general Licensee Y would typically carry out more frequent supervision meetings and discussing the issues with Licensee Z”.
2. What we decided
2.1. On 27 June 2017 the Committee held a hearing on the papers and considered all the information that had been gathered during the inquiry.
2.2 The Committee found Licensee Cooper and the Agency have 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(b) of the Act, that the conduct of Licensee
Cooper and the Agency contravenes the Act and the Rules made under the Act.
3.2. The conduct is in breach of section 50 of the Act and Rule 8.3.
The Law
The Act and Rules
3.3. By section 72 of the Act a licensee carrying out “real estate agency work” is guilty of unsatisfactory conduct in the circumstances set out, including if the licensee “...contravenes a provision of this Act or of any regulations or rules made under this Act...”
3.4. By section 50 of the Act a salesperson carrying out agency work must “... be properly supervised and managed by an agent or branch manager.”
“... 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”.
3.5. The terms “agent” “branch manager” and “salesperson are defined as follows:2
a) “agent means a person who holds, or is deemed to hold, a current license as an agent under this Act”.
b) “branch manager means a person who holds, or is deemed to hold, a current license as a branch manager under this Act”.
3.6. By 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”.
3.7. By section 36 of the Act there are several pre-requisites to be satisfied before a person can be licensed as an agent or a branch manager, including three years’ experience in real estate agency work in the 10 years preceding the application and holding the “prescribed qualifications”. The prescribed qualifications are set out in the Real Estate Agents (Licensing) Regulations 2009. An agent and branch manager class of license require a higher level of qualification than a salesperson class of license.
3.8. Supervision is real estate agency work and a failure to properly supervise is a breach of section 50 of the Act and rule 8.3 and as such, unsatisfactory conduct (see discussion at paragraphs 3.38 to 3.44 below).
2 Section 2 of the Act
High Court and READT
3.9. There are decisions in both the High Court and READT dealing with supervision. The Committee considers statements made in these decisions about what is proper supervision are binding on it and it is guided by them.
High Court
3.10. In Wang v REAA3 the appellant licensee appealed against an READT decision finding her guilty of misconduct. The appellant had delegated most of the agency work in a transaction to a junior salesperson with under six months experience. The appellant only held a salesperson class of license. A licensee by the name of Mr Swann was the REAA licensed branch manager. Licensee Swann did not appeal the READT decision of unsatisfactory conduct against him for his failure of supervision.
3.11. When discussing section 50 of the Act the court said “... it is clear that a salesperson who may be given actual responsibility for supervising the real estate work of another salesperson by
an agent or branch manager, or who may assume such responsibility, is not under a statutory duty in carrying out that role. And it was not open to Mr Swann to delegate to Ms Wang his statutory duty under s 50 to ensure that Mr Li’s work was performed competently and that it complied with the requirements of the Act, including the relevant provisions of the LCA”.4
3.12. The court found it was negligent or incompetent for the appellant to delegate to an inexperienced salesperson in the way she did despite her not having any statutory obligation to supervise the salesperson. It replaced the finding of misconduct with a finding of unsatisfactory conduct.
3.13. In Barfoot & Thompson v REAA5 the appellant agency appealed an NZREADT decision finding it guilty of unsatisfactory conduct where the eligible officer (EO) of the agency had directed that information about a suicide at a property being offered for sale not be disclosed to prospective purchasers. The appellant agency was found to have breached its supervisory obligations under section 50 of the Act (because the EO had directed the suicide not be disclosed).
3.14. When discussing the meaning of “proper” the court said “... the enquiry must consider the supervision and management itself. The fact an error has occurred is not conclusive evidence of a breach of s 50”.6 It also said “... It is clear that the concern of the Tribunal was with the decision taken at management level. Had that decision been different, then presumably the Tribunal would have been satisfied with the adequacy of the same supervision and management. That demonstrates the problem with the approach. The focus was on the outcome of the system rather than the system itself.”7
3.15. The court allowed the appeal and the decision that the agency breached section 50 of the Act was quashed.
NZREADT
3.16. Bahramitash and Goundar v REAA and Ritesh8 (inter alia) was an appeal by an agency against
4 Wang (supra) at paragraph 36
6 Barfoot & Thomson (supra) at paragraph 13
7 Barfoot & Thompson (supra) at paragraph 16
a CAC finding of unsatisfactory conduct for failing to properly supervise a licensee. The appellant agency submitted because the licensee was experienced he did not require day to day supervision. There was no evidence that the supervisor had provided any supervision over the period to which the complaint related.
3.17. The Tribunal said a lesser degree of supervision may be sufficient to meet the obligation to properly supervise a salesperson but in the circumstances “Such supervision as there was, at any stage of the sale process and the subsequent complaint, was some distance away from what would have been sufficient, even for an experienced salesperson...”9
3.18. Hardy v REAA10 was an appeal against a CAC finding that the appellant who was the regional and business development manager for the agency was responsible for, and had failed to properly supervise, a salesperson involved in the sale of a property in Mangawhai. A licensee holding a salesperson class of license acted as branch manager (and was advertised as such on the agency website) for the agency Mangawhai office. The appellant was not actively involved in the day-to-day running of the Mangawhai branch office and he only visited once or twice a month.
3.19. The agency argued a corporate agent can exercise the statutory functions of supervision under section 50 and there is no need for there to be an individual licensee exercising the supervision.
3.20. The Tribunal said, “It is undeniable that a company must act through human actors” and “A
company needs natural persons acting on its behalf to actually supervise. This is because
‘active supervision’ is required to satisfy s 50. Furthermore, the supervision must be ‘actual, it must be tailored to the circumstances of the agent and the property being sold’”.11
3.21. It also said “...whether there has been sufficient action by a company and those acting on its behalf to satisfy the requirements of s 50 will be a fact specific enquiry, dependent on the circumstances of each case...”12 and “...in practice there must be some person whose task it is to make sure that not only are the proper seminars given, manuals prepared and forms and precedents kept up-to-date but there is a person who is responsible for dealing with the sales people on a day-to-day basis in providing practical, sensible and timely advice”.13
3.22. The appeal succeeded because the Tribunal was not prepared to hold the appellant responsible for a failure of supervision when the appellant did not know it was his responsibility to supervise the Mangawhai branch office and where he did not carry out the role.
3.23. In Maserow v REAA & Others14 the appellant appealed against a finding of unsatisfactory conduct for failing to properly supervise salespersons working in the office where he was the branch manager. The CAC found a failure to properly supervise the licensees where the appellant had not identified a poorly drafted ASP.
3.24. The Tribunal held that it would be a “counsel of perfection” for a branch manager to review every ASP but that section 50 of the Act does require “... active supervision by a branch manager...” and “Supervision must be actual, it must be tailored to the circumstances of the
9 Bahramitash (supra) at paragraph 48
11 Hardy (supra) at paragraph 16 & 17
12 Hardy (supra) at paragraph 19
agent and the property being sold, it must involve active involvement by the branch manager with the agent(s), including a knowledge and understanding of the issues with each of the properties being sold by the agency, if any. It should include an assessment of the competence of an agent to draft an agreement in English.”15
3.25. The Tribunal also said, “We do not consider that every error an agent makes is a direct result of inadequate supervision”.16 It allowed the appeal and quashed the CAC finding of unsatisfactory conduct because it considered the appellant to be a thorough and careful branch manager, who did not appreciate there were issues with the property which had not been disclosed to him and despite finding he should have reviewed the situation on seeing the poorly drafted clause in the ASP.
3.26. REAA v Li, Wang and Swann17 is the NZREADT decision appealed by Wang (referred to above).
The REAA qualified branch manager was licensee Swann.
3.27. The branch manager (licensee Swann) gave evidence about his supervision in the following way18:
a) He required licensees to attend regular meetings and training seminars.
b) He is always available and the salespersons knew that.
d) Salespersons with less than six months experience are clearly told of their compliance requirements.
3.28. The Tribunal made a finding of unsatisfactory conduct against the branch manager because “... he, had allowed Ms Wang to take much of the control over her team of salespersons which he should have retained, especially knowing that Ms Wang is an extremely high- powered and effective salesperson. He ought to have been particularly careful about supervision in this situation where, apart from him, all employees of the agency spoke in Mandarin. It is a near run thing whether his failures amount to misconduct at a low level or to unsatisfactory conduct at a reasonably significant level. Our finding is the latter.”19
3.29. Hutt City Ltd and Ross v REAA and Nickless20 was an appeal by an agency and principal of the agency against findings of unsatisfactory conduct for a failure to properly supervise a salesperson.
3.30. The complaint arose because a salesperson had permitted a purchaser to have possession of a property prior to settlement (by handing over the key(s)). The branch manager was unavailable at relevant times because he was attending a funeral. A CAC made a finding of unsatisfactory conduct because the salesperson received no support or advice at the time she was dealing with pressure from a purchaser to release the keys.
3.31. The Tribunal noted that the agency had adequate and sensible management structures in place and said that section 50 of the Act must be strictly complied with “However, it needs to
15 Maserow (supra) at paragraphs 23 to 25
16 Maserow (supra) at paragraph 28
18 Li, Wang and Swann (supra) at paragraph 124 to 130
19 Li, Wang and Swann (supra) at paragraph 171
be applied in terms of sensible business practice and common sense. It cannot be that supervisors and managers need to have reserve backups in their own office when that is available 5 to 15 minutes away by car. In any case, the necessary and proper systems, with training systems, were in place but, perversely, a normally sensible real estate agent succumbed to human pressure from purchasers and prematurely handed over the keys to the property on good faith”.21
3.32. On the specific facts of the case where a salesperson had made a wrong decision while her manager was at a funeral and where there were adequate management systems and processes in place the Tribunal did not consider there had been a failure to properly supervise the salesperson.
3.33. In Donkin v REAA and Morton-Jones22 a property was incorrectly described in marketing material as a home and income when it was not. One of the issues dealt with by the Tribunal was whether the branch manager had failed to properly supervise the salesperson(s) responsible for the misleading marketing.
3.34. Although on the specific facts of the case the Tribunal did not consider there was a failure of supervision it made a useful general statement about supervision when it said “...we do not consider a simple assertion that staff have been told to act in a certain way and have not is a proper discharge of the obligation to supervise under s 50. More is required.”23
The REAA supervision standard
3.35. The REAA issued a professional standard on supervision (the supervision standard) pursuant
to section 12(1)(i) of the Act effective from 1 July 2017. The introduction states “The Standard does not create any binding rules of law that are directly enforceable against licensees.
However, it will be used by REAA in respect of its compliance and enforcement decision- making.” Further, “The Standard is principle based...” and “...outlines general objectives to be achieved.”
3.36. The supervision standard flags the difference between supervision under the Act and management of an employment relationship. Supervision under the Act can only be carried out by a licensed agent or a licensed branch manager.
3.37. In summary, the guidelines in the supervision standard are as follows:
a) A salesperson should have a clearly designated supervisor - although other licensed agents and branch managers can provide supervision the standard contemplates a single designated supervisor.
b) A salesperson must know who is responsible for supervising the salesperson.
d) An experienced and competent salesperson may assist the supervisor.
e) There must be a system, policy and procedure for supervision.
f) A supervisor should be actively and regularly involved in a salesperson’s activities.
21 Hutt City Ltd and Ross (supra) at paragraph 46
23 Donkin (supra) at paragraph 12
g) Supervisors are to monitor performance of salespersons drafting agreements to ensure high standards.
h) Every agreement should be reviewed by a supervisor - with timing of the review to be a judgement call.
i) Extra care is required when supervising new or inexperienced salespersons.
j) Records of supervision should be kept.
k) There is no set ratio for the maximum number of salespersons a supervisor may
supervise and this must be assessed against the supervisor’s capacity and experience and the experience and competence of those being supervised.
l) When a supervisor is not located at the same place as a salesperson being supervised there will need to be careful planning and systems and “Remote supervision presents significant practical challenges.”
Discussion
Is supervision real estate agency work/agency work?
3.38. Supervision, or a failure to carry out supervision in breach of section 50 of the Act and Rule
8.3 of the Rules is the carrying out of real estate agency work/agency work provided it is for the “purpose of bringing about a transaction.”24
3.39. Real estate agency work does not end with the signing of an ASP. It continues, at least until settlement of the transaction. Real estate agency work involves both actions and omissions.
3.40. In House and Barfoot & Thompson Limited v REAA and Henton25 the High Court considered a threshold question, being whether the way the agency (as supervisor) responded to a complaint prior to settlement of a transaction was real estate agency work (the complaint being made after the ASP was signed but prior to settlement).
3.41. The court said “... the complaint is effectively that B & T did not offer appropriate assistance whilst the transaction was under threat. In other words, it was a complaint about an omission to provide services on his behalf for the purpose of bringing about the
transaction...once the relationship of principal and agent has been established anything (be it an act or omission) that is related directly or indirectly to that work is liable to be within the definition”.26 It also held that steps taken by a supervisor in responding to a complaint after settlement “...could not properly be described as taken or omitted ‘for the purpose of bringing about a transaction.’”27
3.42. By section 72 of the Act, contravening a provision of the Act or Rules is unsatisfactory conduct. By section 73 of the Act, a “...willful or reckless contravention...” of the Act or Rules is misconduct.28
3.43. Only an agent operating as a business can breach rule 8.3. If the agent operating the business is an incorporated company then a finding of unsatisfactory conduct pursuant to
24 Section 2 of the Act (definition of real estate agency work or agency work)
26 House (supra) at paragraph 49 & 50
27 House (supra) at paragraph 51
28 Section 73(a) of the Act
section 72 of the Act can be made against the agent company. There is no requirement of an intention to breach the Act or a Rule for there to be a finding of unsatisfactory conduct.
3.44. Section 50 of the Act has a wider application. A licensee who holds an agent or branch manager class of license and who is in breach of section 50 of the Act (contravenes it) is guilty of unsatisfactory conduct if, on the facts of the case, the licensee is responsible for
supervision and management and has knowledge of that responsibility. More than one
person can be responsible for supervision and management.
What is proper supervision?
3.45. The requirement of the Act is that a salesperson must be “properly supervised and managed”. This is further defined as agency work being carried out under “such direction and control...as is sufficient to ensure...” the work is carried out competently and complies with the Act (our emphasis).
3.46. The supervision standard is not law but it reflects the decisions of the High Court and
NZREADT on supervision (the authorities).
3.47. In this decision, the Committee has not referred to every decision of the Tribunal on supervision but it believes its selection of decisions captures how the Tribunal interprets the term “properly supervised and managed”.
3.48. Because the supervision standard was issued after the conduct being investigated by the
Committee, it has not relied on it to make its findings.
3.49. How the employment relationship is managed is not relevant. The focus is on supervision and management of the salesperson to ensure competent real estate agency work and
compliance with the Act.
3.50. Although each individual case will involve a fact specific enquiry the Committee has identified some principles for proper supervision and management from the authorities and has assessed the evidence in this case against those principles. Being:
a) Supervision (and management) must be active.
b) An experienced salesperson may require less supervision.
d) Supervision must be tailored to the circumstances - of the salesperson and the property being sold. A supervisor must have knowledge and understanding of the issues (if any) relating to each property being sold (by a salesperson). It follows that a supervisor must have knowledge of each property being sold.
e) An assessment of the circumstances of a salesperson includes looking at the person’s experience, skill and competence and proficiency in the English language.
g) The mere fact of an error by a salesperson does not mean a failure of supervision.
h) Telling salespersons to act in a particular way (and to meet regulatory requirements) is not supervision.
k) Manuals dealing with policy and procedure assist with management and supervision but do not meet the obligation to properly supervise and manage a salesperson
3.51. The supervision standard is consistent with the principles referred to above and provides further detail - such as the requirement for a clearly designated supervisor, for a salesperson to always know who the supervisor is, the desirability for a written supervision agreement and the desirability of keeping supervision records.
3.52. Remote supervision, where a supervisor is not physically located in the same place as a salesperson being supervised, is not prohibited by the Act. The supervision standard notes that remote supervision presents significant practical challenges.
3.53. Based on the relevant words of the Act and on its consideration of the authorities, it is the opinion of this Committee that in the absence of a specific and robust system utilising the best of modern technology, remote supervision will be unlikely to meet the requirements of the Act for a salesperson to be properly supervised and managed.
3.54. A salesperson can assist an agent or branch manager with supervision and proper management, however the agent or branch manager cannot delegate the responsibility of supervision or escape responsibility by doing so.
3.55. It is the opinion of this Committee that having a salesperson assist in supervision and management places a licensed agent or branch manager in a situation of significant risk. The risk being that the agent or branch manager will be seen to have delegated the supervision responsibility and to have failed to provide proper supervision and management. To avoid or mitigate this risk there would need to be a very specific and well understood (and documented) process for the salesperson’s assistance. If the process places the responsibility on a salesperson to detect problems with compliance before or after the event or to assess the competence of salespersons to perform agency work and to inform the licensed agent/branch manager at his or her discretion, then the responsibility has been delegated (and delegation is not permitted by the Act).
Does the Agency have an adequate system for proper supervision and management in the branch offices out of which the specified cases arise?
3.56. Although Licensee Cooper has provided information about supervision generally in respect the entire Agency operation the Committee investigation and finding of unsatisfactory conduct is confined to the two offices from which the specified cases emanate. Information generally about supervision Agency wide is relevant to these two offices.
3.57. From the evidence considered the Committee is satisfied that it is more probable than not that as at 8 June 2017 (the date of Licensee Cooper’s statement responding to the investigation) the Agency does not have an adequate system for the proper supervision and
management of salespersons in the two branch offices mentioned in Complaints. The Committee is satisfied as a matter of fact that “proper” supervision and management is not occurring in these offices.
3.58. Bearing in mind what Licensee Cooper has said about supervision generally it is likely that all branch offices without a manager who is an agent or branch manager qualified licensee are not being properly supervised and managed by an agent or branch manager. However, no findings are made in respect of other branch offices.
3.59. Although the supervision standard was only released recently, the High Court and Tribunal jurisprudence looking at the issue of proper supervision and management has been developing over several years. Licensee Cooper should have been aware (before now) that, for the two branch offices, the Agency does not have an adequate system for the proper supervision and management of salespersons.
3.60. The absence of an adequate system for proper supervision and management (and the fact it is not occurring) is a contravention of the Act and the rules made under the Act.29
3.61. If a contravention of the Act and Rules is “...willful or reckless...” then the conduct is misconduct. The Tribunal in Li Wang and Swann found licensee Swann guilty of unsatisfactory conduct but in not finding misconduct, described it as “...a near run thing...”30
3.62. The Committee has decided to treat the conduct as unsatisfactory conduct and does not find a prima facie case of misconduct. It does so because it appears that Licensee Cooper has genuinely misunderstood the requirements for proper supervision and management, because the jurisprudence on what is proper supervision and management has been developing over a period of several years and because the REAA supervision standard has only just been released (effective from 1 July 2017).
3.63. The Agency has an organisational structure as set out in a structure diagram referred to earlier in this decision. Licensee Cooper sits at the top of the tree as managing director and EO. He has an agent class license. Licensee Z is identified as a business owner and shareholder and auction director/auctioneer. He has an agent class license. The REAA does not have any record of any license for the chief financial officer, the operations manager and the human resources adviser. The new talent development manager has an agent class
license.
3.64. The structure diagram lists 13 branch offices. Only five of the identified managers have an agent or branch manager class license (as at 8 June 2017). Licensee Y is designated as the branch manager for the branch Complaint 2.
3.65. There are six persons described as “Licensed & Senior Sales Consultants”. They are not identified as branch managers. Three of these persons have an agent class license (as at 8
June 2017) - licensee U, Licensee Q and Licensee P.
3.66. Ten of the listed branch managers are indicated to have REINZ or AREINZ status.
3.67. Licensee Cooper emphasises that he appoints persons as managers (branch managers) who have the skills to do the job. Holding an agent or branch manager class license is not a prerequisite for being a branch manager. He says he knows of people who have these classes of license who he would not appoint to be a branch manager. He has great respect for the
29 Section 50 of the Act and Rule 8.3
30 Li Wang and Swann (supra) at paragraph 171
REINZ/AREINZ endorsement of his licensees.
3.68. He understands, correctly, that the Act does not require an REAA qualified agent or branch manager in each office. He believes this means that a branch can be managed by a “wider category...variety of people...” and that although there has to be a structure which is people with the proper qualifications governing the process “... this governance could now be undertaken at a higher level”.
3.69. How Licensee Cooper describes his understanding of proper supervision and management under the Act does not meet the requirements for active and day-to-day supervision and management of a salesperson by an agent or branch manager.
3.70. He describes a process for conducting and assessing new salespersons. This is part of a system to ensure salespersons are competent but has very little to do with the day to day management of them. At best the assessment conducted by Licensee Cooper enables him to make decisions about an initial level of supervision. If that supervision is then delegated to a non-qualified supervisor, it will not be proper supervision and management.
3.71. He talks about the Agency policy and procedure manual. While being a tool which assists supervision and management, a manual does not meet the requirements of the Act for proper supervision and management - which the authorities interpret as being active and on a day-to-day basis.
3.72. Licensee Cooper talks about ongoing training provided by the Agency. Training is a tool that assists with proper supervision and management but is not a substitute for active and day-to- day management of salespersons.
3.73. Having agent and branch manager qualified supervisors available to be consulted when such consultation is sought by a salesperson is an ingredient of proper supervision and management but is not a substitute for active and day-to-day management of salespersons. Having a salesperson manager with an open door policy or being available to be consulted about problems at any time is of limited relevance to an assessment of whether salespersons are being properly supervised and managed.
3.74. Licensee Cooper says branch sales meetings are held each week. It is acknowledged that a branch sales meeting is an important ingredient in the process of supervising salesperson licensees. However, if the manager conducting the meeting and obtaining knowledge of the day-to-day activities of the salespersons holds a salesperson class of license, then the sales meeting has significantly less relevance in an assessment as to whether the Agency is meeting its statutory obligation to properly supervise and manage salespersons.
3.75. The inference the Committee takes from the evidence is that in these branch offices where the manager is a salesperson, a salesperson is running the weekly branch meetings and obtaining up-to-date information about salespersons’ agency work. The only way any issues arising will be referred to a qualified supervisor is if the branch manager identifies a problem and decides to refer it to a qualified supervisor for resolution, rather than dealing with the matter him or herself. That is not indicative of a system or process for proper supervision and management.
3.76. Licensee Cooper talked generally about having experienced people who maintained regular contact with licensees but did not say who those experienced people were and whether they were qualified supervisors.
3.77. He described a process for reviewing ASP – “We certainly review sale and purchase
agreements post signing...” He did not say who the “we” were and whether an REAA
qualified supervisor reviewed ASP after signing. He said “we” look at ASP before signing for a salesperson who has practised for less than six months, less regularly for more experienced licensees and “seldom” with very experienced licensees.
3.78. The Committee takes Licensee Cooper to be referring to salesperson licensees. A salesperson licensee who has had a license for less than 6 months should not be drafting an ASP31. If the “we” is a non-qualified branch manager, and that manager routinely reviews salesperson drafted ASP then the requirements for proper supervision and management under the Act
are not met. For the branch managers who are not qualified supervisors the reasonable inference from the evidence considered by the Committee is that a non-qualified supervisor routinely reviews ASP (rather than a qualified supervisor).
3.79. This Committee believes it is inherently misleading if advertising refers to a licensee as a branch manager or a manager where that manager does not hold an agent or branch manager class of license. The perception of the public must be that someone identified as a manager in a branch office is qualified to manage and supervise salesperson licensees.
3.80. For the reasons set out above and discussed in the specified cases section of this decision (below) the Committee is satisfied the Agency is not complying with its statutory obligation to properly supervise salesperson licensees in the branches (where the branch manager does
not hold an agent or branch manager class of license (Rule 8.3)).
3.81. Also, the Agency must act through human actors and Licensee Cooper is the managing director and EO. He acknowledges he has the ultimate responsibility for ensuring proper supervision and management of salespersons within the Agency. The Committee finds he is responsible for compliance with section 50 of the Act (even though this responsibility is shared with others in the Agency).
3.82. A finding of unsatisfactory conduct is made against both the Agency and Licensee Cooper.
The specified cases
Complaint 1
3.83. Licensee X was the branch manager at the branch office at relevant times.
3.84. In a chart/diagram with his evidence, Licensee Cooper identifies Licensee X as having responsibility for “supervision” at the branch office. He also describes him as “...the sales manager overseeing Licensee T”.
3.85. He acknowledges licensee X only had a salesperson class of license and when describing management day-to-day in the office talked about licensee X taking sales meetings, having one-on-one meetings with salespersons and being the person responsible for reviewing LIM and titles.
3.86. Licensee Cooper also says once a complaint was made licensee X met with the complainant and then contacted licensee Z to identify the appropriate procedure and process to follow.
3.87. In a letter in response to this complaint Licensee Cooper advised he had “instructions” from the REAA that if he had “effective” branch managers or sales managers in his offices “...I have personally met the supervision requirements of the legislation”. He was asked to provide a
31 Section 36(2) A Lawyers and Conveyancers Act 2006
copy of this advice, it being assumed by the Committee that he had a written instruction of some kind. Licensee Cooper explained he had received this information from licensee Z who had received it during a discussion with the REAA. However, from his further explanation it is clear Licensee Cooper has received no such instruction as alleged.
3.88. Licensee Cooper provided no specific information about any agent or branch manager qualified licensee assisting licensee X with supervision and management other than when he said licensee X contacted licensee Z (who holds an agent class licence) to discuss the process for dealing with the complaint.
3.89. As the complaint was not upheld the Committee did not identify any specific failure of supervision as contributing to it.
3.90. The Committee is satisfied that at relevant times licensee X, who only held a salesperson class of license, was primarily responsible for the supervision and management of salespersons in the branch office.
3.91. Licensee Cooper has not identified any agent or branch manager class licensee whom licensee X was assisting with proper supervision and management and the role undertaken by licensee X goes far beyond assisting a qualified agent/branch manager with proper supervision and management.
3.92. Despite not upholding the complaint and not identifying any failure of supervision as contributing to the complaint the Committee is satisfied that at relevant times Licensee Cooper and the Agency were not complying with their legal obligation to provide proper supervision and management to salespersons in the branch office.
3.93. The Committee notes that the current branch manager only holds a salesperson class of license.
Complaint 2
3.94. Licensee Y is the branch manager. At relevant times she held a salesperson class license. Her description of her role generally and specifically in relation to the salesperson the subject of the complaint, is that she provided supervision and management to that salesperson and salespersons in the Agency generally.
3.95. Her supervision of the salesperson (licensee M) included reviewing the listing authority, marketing material and the marketing program. It included attending one-on-one meetings with the salesperson on a weekly basis. She described her “supervision duties”.
3.96. Licensee Cooper described her role as anything but supervision. In response to the Committee request for a job description for licensee Y he describes her as being focused on the growth and prosperity of the office and team members and being responsible for “nurturing” and “nourishing” new members and providing guidance, assistance and coaching. He summarised her role as “... support and assistance to salespeople...”
3.97. Licensee Cooper advised there were “...approximately 48 sales consultants...” in the office and provided a list of 45. He advised 4 licensees (Licensee U, Licensee O, Licensee Q and Licensee P) had agent/branch manager class licences. This is confirmed by the REAA for 3 of the licensees (but not for Licensee O or a Licensee N). He also advised licensee Y was “recently qualified”. If he meant granted an agent or manager class of licensee, the statement is misleading. The REAA records Licensee Y as being issued an agent class of licence on 28 September 2017 (last week).
3.98. Licensee Y said nothing about any other agent/branch manager qualified licensee supporting her or assisting her to supervise salespersons employed by the branch office.
3.99. Licensee Cooper said he was involved in the management and supervision of the office by attending it approximately 2 to 3 days a month. He did not say how this enabled him to be actively involved in the day-to-day supervision of salesperson licensees. The Committee considers it improbable him visiting the office 2 to 3 days a month would enable active involvement in supervision.
3.100. He said he had a team of people “...monitoring the Licensees activities: Licensee Z, Licensee Y
and Licensee U. Licensee O, Licensee Q and Licensee P are also available to assist.”
3.101. Licensee Y was not supervisor qualified at relevant times (and may not yet be) and Licensee Z does not work at the office. Licensee U appears in the Cooper & Co contact list provided by Licensee Cooper as an Auctioneer. It is not clear if he is physically located at the Milford office. In the contact list licensees Q and Licensee P are identified as salespersons and not as part of the management structure in the office. Licensee N is identified as a salesperson at
the office, and not as part of the management structure.
3.102. Licensee Cooper does not say how the other REAA supervisor qualified licensees are actively engaged in supervising salesperson licensees.
3.103. When talking about the supervision chain of command and the Agency he described himself as being at the head of the team but that he relied significantly on supervision undertaken by licensee Z, Licensee Y and Licensee U. He described Licensees U and Licensee Y as having “...more frequent day to day contact”. Licensee Y was not supervisor qualified and he does not say how licensee U provided active supervision of salespersons.
3.104. From the evidence, the Committee does not get any sense of a system for actively supervising more than 40 salesperson licensees in the office.
3.105. It takes from the evidence that licensee Y, who did not hold a branch manager or agent class of licence at the relevant times, was primarily responsible for supervising and managing the licensee the subject of this complaint and the other salesperson licensees in the branch office.
3.106. Licensee Cooper has not identified any agent or branch manager class licensee whom licensee Y was assisting (at the time of the transaction giving rise to the complaint) with proper supervision and management and the role undertaken by licensee Y goes far beyond assisting a qualified agent/branch manager with proper supervision and management.
3.107. A failure of supervision may have contributed to the circumstances leading to this complaint.
3.108. The Committee is satisfied that at relevant times Licensee Cooper and the Agency were not complying with their legal obligation to provide proper supervision and management to salespersons in the branch office.
Complaint 3
3.109. Much of what is said in relation to Complaint 2 is also relevant because the licensee the subject of this complaint worked at the office of the Agency.
3.110. In its decision finding the licensee guilty of unsatisfactory conduct the Committee noted the licensee had not kept any diary notes and had not been able to provide any correspondence of emails following up advice to the complainant about significant matters. It also describes
the ASP as a drafting mess.
3.111. The transaction involved the sale of the property for a sale price of $7,900,000. Negotiations spanned a period of around two weeks. The licensee had a regular interaction with the complainant and/or his agents over this period. The Committee made findings of unsatisfactory conduct for six different issues. It described the conduct of the licensee as cumulatively demonstrating a low level of skill, care and competence and a high level of incompetence when carrying out real estate agency work. It described the conduct as not seriously incompetent by a narrow margin.
3.112. Licensee Cooper described licensee Y as “...the overseeing sales manager...” and as being responsible for supervising licensee S and Licensee R at relevant times. She did so on the basis she would “... refer any issues of concerns to Licensee Z or me”. She carried out the more frequent supervision meetings and would discuss any issues with licensee Z.
3.113. He said licensee Y had close support and guidance from licensee Z(who holds an agent class licence) because licensee Z attended the office on average every second day and on average spoke with her on the phone daily.
3.114. Licensee Cooper says the licensees the subject of this complaint spoke to licensee Z prior to taking the buyer through the property (as a one off) but he does not say how licensee Z involved himself in the day-to-day supervision of these licensees or the other salespersons in the office.
3.115. Licensee Cooper described how licensee Y supervised the licensee the subject of this complaint (as well as licensee R). The licensees contacted her frequently to discuss issues and would talk to her most days. Licensee Y also had an open door policy. Further, the licensees were very experienced and if there had been an obvious problem, licensee Y would have discussed it with licensee Z.
3.116. The Committee is satisfied licensee Y was primarily responsible for supervising the salesperson licensee the subject of this complaint and the other salespersons in the branch office.
3.117. What Licensee Cooper has said about the engagement of licensee Z with the office does not satisfy the Committee licensee Z was engaged in the active and day-to-day management of the salesperson the subject of the complaint or other salespersons in the office. He could be consulted by licensee Y if she, at her discretion, determined an issue with one of her salespersons required his assistance (to her).
3.118. Even if licensee Y was assisting licensee Z with his supervision and management, the role undertaken by her goes far beyond assisting a qualified agent/branch manager with proper supervision and management.
3.119. It is probable a failure of supervision contributed to the circumstances leading to the complaint in this case.
3.120. The Committee is satisfied that at relevant times Licensee Cooper and the Agency were not complying with their legal obligation to provide proper supervision and management to salespersons in the branch office.
Result/Summary
3.121. There is a finding of unsatisfactory conduct against Licensee Cooper for breach of section 50 of the Act. There is a finding of unsatisfactory conduct against the Agency for a breach of
Rule 8.3.
3.122. The findings are made because the Agency and Licensee Cooper failed to provide proper supervision and management to salespersons in two branch offices of the Agency at relevant times.
3.123. Supervision must be active and on a day to day basis.
3.124. There was no system/process for proper supervision and management of salespersons and, in each of the specified cases, a failure to provide proper supervision and management.
3.125. The managers/branch managers of the two branch offices of the agency who did not hold an agent or branch manager class of license were primarily responsible for supervision of other salespersons in those offices.
3.126. The managers of the two branch offices were not assisting a licensed agent or branch manager to properly supervise salespersons in those offices because there was no agent or branch manager responsible for, or engaged in, the active and day-to-day supervision of salespersons in those offices.
3.127. Even if the managers of these offices had been assisting a licensed agent or branch manager to properly supervise salespersons, their role went far beyond assistance.
3.128. Licensee Cooper is incorrect in his belief a branch can be managed by a wider category of people and he can focus on skill sets rather than specific qualifications. He is wrong in his belief that governance to meet the obligation to properly supervise and manage can be undertaken at a higher level.
3.129. The Committee notes that since the inquiry commenced Licensee Cooper has provided information about some of his salesperson managers obtaining qualifications from Australia for the purpose of converting their salesperson class license to an agent or branch manager class license. However, until they obtain an agent or branch manager license the failure to provide proper supervision (and management) identified in this decision is not addressed.
3.130. Looking out into the future he does need to give some thought to how he can ensure salespersons working for the Agency are properly supervised and managed in compliance with the Act and Rules.
4. Request for submissions on orders
4.1. The Complainant is to file submissions (if any) on what orders should be made within ten working days (by 19 October 2017) from the date of this decision. These submissions, if any, will then be provided to the Licensee, with a timeframe for filing final submissions.
4.2. The Committee requires the Case 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 conduct a separate hearing on the papers to consider all submissions and issue a decision on orders if any, under section 93 of the Act. Refer to the Appendix of this decision.
6. Your right to appeal
6.1. The Committee considers 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.
7. Publication
7.1. The Committee has deferred making any decision on publication until its hearing to decide what orders, if any, should be made.
Signed
Peter Brock
Date: 5 October 2017
Appendix: Relevant provisions
The Real Estate Agents Act 2008 provides:
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.
89 Power of Committee to determine complaint or allegation
(1) A Committee may make 1 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.
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.
93 Power of Committee to make orders
(1) If a Committee makes a determination under section 89(2)(b), the Committee may do 1 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 licensee 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.
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:
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.
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