Complaint No C25980 [2019] NZREAA 1 (10 January 2019)

Last Updated: 3 June 2019

Before the Complaints Assessment Committee

Complaint No: C25980

In the matter of

Part 4 of the Real Estate Agents Act 2008

Licensee: Licensee (XXXXXXXX)

Decision to take no further action

10 January 2019

Members of Complaints Assessment Committee: CAC518

Chairperson: Nigel Dunlop Deputy Chairperson: Amelia Bardsley Panel Member: Sandra Wilson

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 22 June 2018 the Real Estate Agents Authority (the Authority) received a complaint against the Licensee from (the Complainant).

1.2. The Licensee is a licensed Salesperson under the Real Estate Agents Act 2008 (the Act).

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

1.4. The details of the complaint are that the Complainant was unsatisfied with the Licensee’s conduct during the property transaction when she purchased the Property. She alleges he had a very aggressive, dismissive and pushy sales manner, pressuring her to increase her offer or remove certain conditions in her offer. Further, that he lied to her about not being the owner of the Property and did not disclose to her certain property defects and bad workmanship carried out on the Property.

1.5. In particular, the Complainant alleges that the Licensee:

(a) Put undue pressure on her during the course of the property transaction

(b) Did not disclose several issues with the Property, particularly the poor condition of the roof

(c) Did not disclose that he was the vendor/ owner of the Property.

1.6. The Complainant requested a remedy, being:

a) That people be made aware of his dishonesty and he be struck off as a real estate agent

b) Compensation for repair costs and stress caused.

1.7. The Licensee responded to the complaint against him.

1.8. In particular, the Licensee commented that

a) He did not place any pressure on the Complainant during the property transaction

b) To the best of his knowledge there were no issues to disclose

c) He is not the owner or vendor of the Property.

2. What we decided

2.1. On 21 August 2018 Complaints Assessment Committee 403 considered the complaint and decided to inquire into it under section 79(2)(e) of the Act. That committee was replaced by Complaints Assessment Committee 518 (the Committee) which reaffirmed the earlier decision to inquire on 24 September 2018.

2.2. On 6 December 2018 the Committee held a hearing on the papers and considered all the information that had been gathered during the inquiry.

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

2.4. This decision was made under section 89(2)(c) of the Act and relevant provisions of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012, in particular rules 5.1 (skill, care), 6.2 (fairly), 6.3 (disrepute), 6.4 (mislead), 9.2 (undue pressure), 10.7 (defects). Also taken into account were sections 72 (unsatisfactory conduct) and 136 (disclosure, benefit) of the Act.

3. Our reasons for the decision

The Committee concluded:

3.1. As the allegations against the Licensee were serious, an investigation was required. The investigation findings clarified some matters and allowed the Committee to confidently decide that there had not been any unsatisfactory conduct by the Licensee so no further action was required.

3.2. The Complainant’s allegations concerned three issues. Set out below is each of these issues and our decision and reasons for no further action on each issue.

Whether the Licensee placed pressure on the Complainant:

3.3. It is accepted by the Committee that any property transaction will include an element of pressure for a buyer. Purchasing a property is a substantial financial outlay and can be a stressful experience for many buyers. Licensees may legitimately in some circumstances place pressure on their clients or customers. What the Committee and legislation is concerned with is whether any pressure placed is undue or unfair pressure. Rule 9.2 specifically provides that a licensee must not engage in any conduct that would put a prospective client, client or customer under undue or unfair pressure. Therefore, the Committee considered whether there was undue or unfair pressure placed on the Complainant in the property transaction.

3.4. The Complainant states the Licensee pressured her. The Complainant says the Licensee had a

very aggressive pushy sales manner, that he repeated himself over and over, pressuring her to offer more money. He would talk over her and dismiss what she was saying. On the evening of the Complainant’s final offer, she says communications went back and forth for a few hours with her counter offers being repeatedly rejected and with the vendor’s desired amount being written over her rejected offers. The Complainant says she relented to the pressure and agreed to the vendor’s amount as she wanted the house and was worn out.

3.5. The Licensee denies that he placed undue or unfair pressure on the Complainant. He advised the Committee that the Property was under offer after a 3-week deadline sale campaign. He explained that a deadline sale is similar to a closed tender, which creates buyer competition to achieve the best results for the vendor. All potential purchasers had to acknowledge the multi offer situation. They were provided multi offer acknowledgement forms to sign. After the Complainant’s offer presentation, the negotiation took over 24 hours and the Licensee submits that the Complainant had sufficient time to consider what conditions to offer. She then had 6 days to get a building report done and the Licensee considers this sufficient time for the purchaser to consider if she wanted to go unconditional, reduce or withdraw her offer. He advises he had no communication with her during that 6-day period. The Licensee says the purchaser appeared satisfied with her building inspection report. Her solicitor confirmed the building inspection report was satisfied and the contract went unconditional three days before the confirmation date.

3.6. Having considered the evidence of both the Complainant and the Licensee we find no proven undue or unfair pressure. With a deadline sale and subsequent negotiation process it is understandable the purchaser felt pressure, but we find no evidence that the Licensee’s conduct fell below that of a reasonable salesperson in such a process.

Whether the Licensee failed to disclose Property defects:

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

3.8. The Complainant states that the Licensee did not disclose certain issues with the Property, particularly the poor condition of the roof. She submits that a building report from 11

December 2017 commissioned by a person who owned the Property prior to the vendor stated that the roof needs replacing. The Complainant says the Licensee would have seen this report.

3.9. From the evidence obtained during the investigation the Committee established that the Licensee did not see the first building inspection report (nor did the vendor client), secondly, we note that the report did not specify that the roof needed replacing but rather that “the odd roofing sheet may need upgrading”, thirdly, work had been carried out on the Property since the first building report rendering it of limited relevance, fourthly neither tradespeople nor the vendor notified the Licensee of issues, and fifthly the Complainant’s building report did not reveal issues which should have been disclosed by the Licensee. We find that the Licensee did not withold or fail to disclose defects with the Property.

3.10. Therefore we find no unsatisfactory conduct on this issue.

Whether the Licensee was an owner or vendor of the Property:

3.11. The Complainant alleges that a neighbour of the Property told her that the Licensee was the owner of the Property. The Licensee did not declare he was an owner or vendor of a Property.

3.12. Section 136 of the Act clearly sets out disclosure obligations where a licensee benefits financially from a transaction (excluding agency commission). Written disclosure is required where a licensee is an owner or vendor of a Property.

3.13. The investigation on this issue confirmed what the Licensee had already advised us. Company

1 was the vendor, and the Licensee coordinated the access of tradespeople for works to the Property at Company 1’s request when appointing the Licensee as the selling agent for the Property. The Licensee has no prior connection with Company 1, nor its directors and shareholders, other than listing one of its properties in 2013.

3.14. The investigation clearly established that the Licensee was not a vendor or owner of the Property, nor related in any way. The Committee found it unbecoming of the Complainant to strenuously pursue an allegation in this regard, and continue to accuse the Licensee of bad faith and gross wrong doing, based on second hand information from a neighbour.

3.15. The allegation on this issue is dismissed.

4. Your right to appeal

4.1. If you are affected by this decision of the Committee, you may appeal in writing to the Real

Estate Agents Disciplinary Tribunal (the Tribunal) within 20 working days after the date of this decision (Section 111).

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

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

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

Amelia Bardsley

10 January 2019

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.

Relevant provisions of the Real Estate Agents Act (Professional Conduct and Client Care) Rules

2012 are rules:

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 6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute

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

Rule 9.2 A licensee must not engage in any conduct that would put a prospective client, client, or customer under undue or unfair pressure

Rule 10.7 A licensee is not required to discover hidden or underlying defects in land but must disclose known defects to a customer. Where it would appear likely to a reasonably competent licensee that land may be subject to hidden or underlying defects, a licensee must either—

(a) obtain confirmation from the client, supported by evidence or expert advice, that the land in question is not subject to defect; or

(b) ensure that a customer is informed of any significant potential risk so that the customer can seek expert advice if the customer so chooses.

Also taken into account were Sections 72 (unsatisfactory conduct) and 136 (disclosure, benefit)

of the Act.