Complaint No C23933 [2018] NZREAA 187 (19 December 2018)

Last Updated: 26 November 2019

Before the Complaints Assessment Committee

Complaint No: C23933

In the matter of

Part 4 of the Real Estate Agents Act 2008

and

Licensee 1: Licensee (XXXXXXXX)

Decision to take no further action

19 December 2018

Members of Complaints Assessment Committee: CAC416

Chairperson: Marjorie Noble

Deputy Chairperson: Rachael Schmidt-McCleave

Panel Member: Geoff Warren

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 9 March 2018 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).

1.3. The complaint relates to the Property.

1.4. The details of the complaint are that the Licensee misled the Complainants about the commission rate and failed to honour the agreed rate. There is an allegation that the Licensee amended the listing agreement after it was signed and did not provide a copy of the listing agreement until some weeks after it was signed.

1.5. In particular, the Complainant advised that:

a) Prospective purchasers were misled about the price the vendors would accept for the property.

b) The Licensee said he needed to lie to buyers to “feed the greed”, so buyers would come to the auction and pay more for the Property.

c) An incorrect RV was printed in the advertising flyers and an incorrect address was printed in an e-book. Nothing was done to correct these errors when they were pointed out.

d) The Licensee ignored their instructions about marketing the Property.

e) The Licensee incurred, and then charged for, marketing costs without their authority.

f) The Licensee failed to discuss the details and costs of staging the Property. The staging company moved the Complainants’ marble and glass topped table, damaging the table and scratching the laminate floor. A dispute arose with the staging company which has led to the Complainants not paying for the staging.

g) After the sale the Complainants saw an advertising hoarding from the Agency at the local golf club offering free golf club membership for one year for anyone selling their property through the Agency. Complainant 1 says he asked the Agency to honour the ad but the Licensee told him he was not eligible as it only applied to vendors who had paid the full rate of commission. Complainant 1 says there were no special conditions noted on the hoarding and said he would provide a photo of this misleading ad for the investigation.

1.6. The Complainants requested a remedy, being:

a) Reimbursement of all costs associated with the sale. Licensee to be held accountable.

1.7. The Licensee responded to the complaint against them.

1.8. In particular, the Licensee commented that:

a) His normal commission rate is 3.8% plus an administration fee, however he (and these clients) agreed to a rate of 1.8% plus a $600 administration fee. He did say that there was

room for them to pay him a bonus for every further $10,000 he achieved on the sales price but no agreement was reached on this so it was ignored. The final commission charged was as per the listing agreement.

b) The Complainants signed the listing agreement and the carbon copy was left with them.

The allegation that the Licensee later altered this document is denied.

c) The advertising material was put together in an enormous hurry as the first open home was 4 days after the listing was signed. As soon as the errors were identified reprints were arranged.

d) Many abusive texts and emails were sent by the Complainants to the Licensee which he referred to his manager. The Complainants were told they could be released from the listing however they did not wish to do this.

e) The Complainants were charged $393.00 for advertising and that amount was authorised by the complainants.

f) The Licensee paid the balance of the advertising personally.

g) The reserve at the Auction was $590,000 however the Property was sold a short time later for $603,750.

h) The Licensee introduced the Complainants to a staging company who then worked out the details of the staging directly with the Complainants.

2. What we decided

2.1. On 7 May 2018 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 21 November 2018 the Committee held a hearing on the papers and considered all the information gathered during the inquiry. This information includes the responses, and supporting documents, provided by both the complainants and the licensee.

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. Rule

6.2 (act in good faith), Rule 6.4 (must not mislead) Rule 5.1 (exercise skill, care, competence).

3. Our reasons for the decision

The Committee concluded:

Commission rate charged and whether the Listing agreement was amended.

3.1. The Committee carefully considered all the evidence with respect to this allegation. The commission rate signed for in the listing agreement was charged by the Agency when the Property was sold. The issue of the bonus that was raised by the Complainants was never agreed between the parties and, accordingly, there was no charge relating to this. The Committee agreed that it was up to the Licensee to negotiate this if he chose to, however no pressure was applied to the Complainants when they chose not to engage in negotiations around this.

3.2. The Committee considered the allegation that the Licensee did not supply a copy of the Listing

agreement to the Complainants for some weeks and that when it was supplied the Licensee had amended the document. The Complainants say they did not receive the document until some weeks later and that the Licensee put it in an envelope and into their letter box and then emptied their letterbox when he arrived, handing them the listing agreement and their other mail. The Licensee says he left a carbon copy of the listing agreement with the Complainants immediately after signing the document. No evidence provided to the Committee that substantiated the Complaint. Because of the serious nature of the allegation, effectively amounting to an allegation of fraudulent behaviour, the Committee considers that it needed strong evidence available to it to be able to find in the Complainants’ favour in this regard. In the absence of such strong evidence the Committee agreed, on the balance of probabilities and without any further available evidence corroborating the Complainants’ position, we consider it more likely than not that a carbon copy had been left with the Complainants as that is consistent with standard procedure. The Committee dismissed this part of the complaint accordingly.

Prospective Purchasers misled over price the Complainants would accept.

3.3. The Complainants say a neighbour of theirs was informed when he visited the open home that he could purchase the Property for an amount much lower than the Complainants’ expectations. The Committee viewed a letter from the neighbour which stated in essence that the Licensee had mentioned a figure but the neighbour could not actually be sure now time had passed what that figure was. The Committee did not consider this to be satisfactory evidence that the Licensee had in fact named a much lower purchaser price and the Property sold for more than the Complainants’ stated reserve a short time later. No evidence was provided in support of the complaint and in any event the outcome of the sale was not affected. The Committee therefore dismissed this part of the complaint accordingly.

Urgency and “need to lie”

3.4. The Complainants stated many times that they had no urgency to sell and that they would not sell unless they received a suitable sales figure. The Complainants felt that the Licensee was leading prospective purchasers to believe that they had to sell. However, the Committee notes that the Complainants requested that the Licensee make contact with the boat brokers they were dealing with several times so that the boat brokers were aware of where they were at in the sale process so that they would continue to hold the boat sale the Complainants were wanting to purchase. Text messages were supplied to the investigation where the Complainants say to the previous Licensee from another Agency that they couldn’t wait any longer for the Agency to produce an offer. They go onto say “it isn’t a rush for you but it is for us.” The Committee agreed that the documentary evidence shows the Complainants had been driving this sale forward as they had other plans they wished to pursue and it was likely this situation was also the one imparted to the Licensee.

3.5. The claim that the Licensee said “I need to lie to prospective purchasers to feed the greed” was again a case of “he said she said.” There was no evidence provided that substantiated this claim and so the Committee was left unable to find this allegation to be made out and therefore dismisses this part of the complaint.

Incorrect RV and incorrect address in the marketing brochures.

3.6 The Licensee admits this was the case as the marketing brochures were put together in just a few days because the first open home was only four days after the listing agreement was signed. The Licensee showed that, as soon as the errors were pointed out, reprints of the documents were done and the information corrected to those who had already received it. The Complainants say this was ignored and left incorrect. The evidence showed that the

Licensee immediately corrected this problem so the Committee finds the conduct does not reach the threshold for unsatisfactory conduct. Due to the quick response by the Licensee to make the changes required to the marketing material overall the Committee considered no harm had come for the errors.

Ignored instructions about marketing and incurred and charged for advertising and misled the Complainants over the staging costs.3.7 The evidence shows that there were discussions between the parties about the inclusion of the Registered Valuation (RV) which it is noted is public information and something the Licensee would be required to tell prospective purchasers as soon as they requested that information. The Complainants say they requested this information not be included in the advertising and that the Licensee ignored this request. No evidence was provided that specific instructions were ignored, and it seemed to the Committee that the parties had differing views on this. The Committee did not receive any evidence that showed the Licensee willfully ignored the Complainants on this matter and , as this information is publicly available, it could not be said that any harm was sustained by the Complainants because of it. The Property sold at a value substantially above the RV

3.8 The allegation that the Licensee incurred and charged advertising costs that were not authorised by the Complainants was also difficult to come to a decision on. The agreed and signed for advertising was corrected and charged to the Complainants as soon as they raised the issue and the Licensee personally met the cost of the balance of the advertising costs. This situation had also arisen with the previous Agency the Complainants had used and it seemed unlikely to the Committee that the Agency had set out to charge them for unauthorised advertising. The situation was remedied immediately so the Complainants were not left out of pocket.

3.9 The staging issue was in similar vein. The Complainants say the Licensee did not discuss the costs of staging with them. The evidence from the staging company shows that they provided their quote to the Complainants who accepted this. The Complainants then became involved in a dispute with the staging company over damage to their table and their floor. This matter has not been resolved between those parties but the Licensee could not be held accountable for this as he was at arm’s length from this agreement. The damage to the table and floor and when it happened could not be ascertained and it was not appropriate to hold the Licensee responsible for this. This part of the Complaint is dismissed accordingly.

Golf Club Membership

3.10 The Complainant said he would provide the investigation with a photo of this advertisement showing there were no terms and conditions attached to this offer. This has not happened. However, the Licensee provided a copy of the billboard which clearly shows in large letters “Conditions Apply”. There appeared to be no basis for the allegation that the Agency did not comply with this advertising hoarding and this part of the complaint is dismissed accordingly.

3.11 The Committee overall found that the allegations made against the Licensee had not been able to be supported with evidence and there had been no breach of the Rules, or the Act by the Licensee which meant a finding of No Further Action was appropriate after considering the allegations.

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 notice of this decision (Section 111).

4.2. For further information on filing an appeal, read Guide to Filing an Appeal at Mi ni stry of

J usti ce -Tri bunal s ( ww w. justi ce. g ov t. nz/ tri bunal s ).

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

Marjorie Noble

Date: 19 December 2018

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 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.

111 Appeal to Tribunal against determination by Committee

(1) A person affected by a determination of a Committee may appeal to the Tribunal against a determination of the Committee within 20 working days after the date of the notice given under Section 81 or 94.

(2) The appeal is by way of written notice to the Tribunal of the appellant's intention to appeal, accompanied by—

(a) a copy of the notice given to the person under Section 81 or 94; and

(b) any other information that the appellant wishes the Tribunal to consider in relation to the appeal.

(3) The appeal is by way of rehearing.

(4) After considering the appeal, the Tribunal may confirm, reverse, or modify the determination of the Committee.

(5) If the Tribunal reverses or modifies a determination of the Committee, it may exercise any of the powers that the Committee could have exercised.

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

2012 are:

Rule 5.1 A licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work.

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

Rule 6.4 A licensee must not mislead a customer or client, nor provide false information, nor withhold information that should by law or in fairness be provided to a customer or client.