Complaint No C27528 [2019] NZREAA 33 (14 March 2019)

Last Updated: 28 November 2019

Before the Complaints Assessment Committee

Complaint No: C27528

In the matter of

Part 4 of the Real Estate Agents Act 2008

Licensee 1: Licensee 1 (XXXXXXXX)

Licensee 2: Licensee 2 (XXXXXXXX)

Decision to take no further action

14 March 2019

Members of Complaints Assessment Committee: CAC 518

Chairperson: Nigel Dunlop

Deputy Chairperson: Amelia Bardsley

Complaints Assessment Committee

Decision to take no further action

1. The Complaint

1.1. On 23 July 2018 the Real Estate Agents Authority (the Authority) received a complaint against

Licensee 1 and Licensee 2 from the Complainant.

1.2. Licensee 1 is a licensed salesperson under the Real Estate Agents Act 2008 (the Act). Licensee

2 is a licensed branch manager. At the material time they both worked for the Agency .

1.3. The complaint relates to the Property.

1.4. The Complainant was the purchaser of the Property. Complainant 1 was the listing and selling agent.

1.5. There are two parts to the complaint.

1.6. As against Licensee 1 the Complainant alleges that she withheld information about the

Property, most notably in relation to subsidence.

1.7. As against Licensee 2 the Complainant alleges that he bullied her into accepting a post settlement repair offer from the vendor.

1.8. It appears not to be disputed that a comparatively small area land on the border of the Property has subsided, although not causing structural damage. The Complainant says that Licensee 1 knew about the subsidence and should have pointed it out to her during her pre- purchase inspections of the Property.

1.9. Licensee 1 says that the vendor did not mention subsidence to her, and nor did she (Licensee

1) notice any, although did notice some settling around the bottom of a shared boundary fence which was suffering from wear and tear. She understands that the subsidence to which the Complainant is referring is on a different part of the Property, namely the western side.

1.10. Following settlement of the purchase of the Property the Complainant became aware of a number of issues with the Property. These were raised with the vendor who eventually offered to contribute $2,000 towards the repair of a master bedroom window, provided that the repairs were completed within two months. The offer was accepted by the Complainant. The agreement was declared to be in full and final settlement of all issues concerning the Property. The Complainant says that Licensee 2 bullied her into accepting the agreement.

1.11. Licensee 2 denies bullying the Complainant. He says, on the contrary, he went out of his way to assist the Complainant address the various issues she raised concerning the Property.

1.12. The Complainant wants both Licensee 1 and Licensee 2 to be held accountable for their alleged failings.

2. What we decided

2.1. On 18 September 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 12 March 2019 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

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

2.4. This decision was made under section 89(2)(c) of the Act.

2.5. The decision was made with reference to the definition of unsatisfactory conduct in section

72 of the Act.

2.6. The decision was also made with reference to the Real Estate Agents Act (Professional

Conduct and Client Care) Rules 2012.

2.7. In particular the Committee had regard to rules 5.1 (skill, care, competence and diligence),

6.2 (good faith and fairness), 6.4 (withholding information), 9.2 (unfair or undue pressure)

and 9.14 (conflicts of interest).

3. Our reasons for the decision

3.1. The fact that settlement of the purchase of the Property was on 1 July 2016 and the formal complaint lodged with the Authority on 23 July 2018, over two years later, speaks of the Complainants ongoing dissatisfaction with her purchase of the Property. She is aggrieved, disappointed and frustrated by what has unfolded since purchasing the Property.

3.2. This dissatisfaction is embodied in the range of things she says were wrong with the Property.

These include the subsidence, blocked drains due to tree roots, a leak in the master bedroom window frame, substance oozing from a light switch, the toilet not being fastened to the floor, crumbling asbestos attached to a fence, and the garden not having been tidied.

3.3. The Complainant has gone to considerable lengths in setting out her complaint. This material traverses a range of complaints against the two licensees, and has been carefully considered by the Committee. The complaints include that Licensee 1 was in a conflict of interest situation because she was friends with the vendor, and that she discouraged the Complainant from obtaining a pre-purchase building report. The complaints were not formally pursued, but provide context. Both licensees deny that there was any conflict of interest or that the Complainant was discouraged from obtaining a building report. They say that their impression following the settlement of the purchase was that the Complainant was critical of the vendor, not them. Licensee 2 says that the first time he heard the bullying allegation against him was after the complaint had been made to the Authority in July 2018.

3.4. It is fair to say that the Complainant’s ongoing criticism and discontentment surrounding the purchase of the Property and subsequent events, is matched by frustration on the part of Licensee 1 and Licensee 2 with the Complainant’s persistence, and what they say is her inaccurate recollection of events.

3.5. The Committee does not consider it necessary to set out the detailed accounts and arguments of the Complainant, and the accounts and arguments of Licensee 1 and Licensee 2 in reply. This is because, despite the volume of material considered by the Committee (almost

300 pages), the two allegations under consideration, especially the bullying allegation, relate to narrow time frames, and the evidence in relation to them was accordingly relatively limited. Much of the remaining material considered by the Committee related to a miscellany of the Complainants concerns and criticisms, not strictly relevant to the two primary allegations under consideration.

Bullying

3.6. On 11 September 2016, about 10 weeks after settlement of the sale and purchase of the Property, the Complainant and the vendor entered into a written agreement. Under that agreement the vendor agreed to pay the Complainant up to $2,000 for the repair of the master bedroom window leak. The agreement provided that acceptance by the Complainant “demonstrates full and final settlement in regard to any current or future issues that are being questioned now or arise subsequently.” The agreement took the form of a letter composed by the vendor addressed to Licensee 2, signed and dated by the vendor, and countersigned and dated by the Complainant on the same day.

3.7. Before the agreement was entered into, Licensee 2 had been in separate discussions with the Complainant and the vendor, resulting in the vendor advising him that she was prepared to offer the Complainant up to $2,000. Licensee 2 advised her of this by telephone. The allegation of bullying relates to that conversation, in which Licensee 2 told her that in his view it was an offer worth accepting. The Complainant said that in discussing the offer with her, Licensee 2 made her feel that she was in the wrong and had over-reacted about the leak, and may have caused problems for a plumber. She says “I believe that Licensee 2 used bully tactics to manipulate me into accepting a conditional offer that would benefit him by making it all go away for the Agency.” The condition being referred to is the provision that payment would only be made in full and final settlement.

3.8. Licensee 2 says that the conversation took place on 7 September, four days before the agreement was signed. He strongly denies the allegation of bullying and says that he struggles “to understand what possible reason anyone would have to bully a single woman recouperating from surgery whose complaint was not directed at him/her.” He says that the Complainant was not criticising him or Licensee 1 at this stage, but instead was critical of the vendor. He says that when he rang the Complainant on 7 September she seemed very happy with the vendor’s proposal and that he told her that she should think about it and let him or Licensee 1 know how she wished to proceed.

3.9. Licensee 1 says that on 11 September the Complainant contacted her to say that she wished to sign the agreement, except she wanted the deadline for the completion of repairs extended from one month to two. The vendor agreed to this variation, and both parties signed the agreement that same day.

3.10. The Committee does not find the Complainant to have been bullied for at least the following reasons. First, as Licensee 2 points out there was no reason for him to bully the Complainant. Second, it is apparent to the Committee that Licensee 2 went out of his way, arguably beyond the call of duty, to resolve the Complainant’s post-settlement concerns. Third, the Complainant in places speaks well of Licensee 2 in the material she has provided the Committee. Fourth Licensee 1 says that she saw no evidence of bullying by Licensee 2 whatsoever. Fifth, the Complainant’s general recounting of events lack, with due respect to her, clarity and coherence, especially in contrast to that of Licensee 1 and Licensee 2, and so it not possible to rely on it for accuracy. This last point is not intended as a criticism of the Complainant, who has clearly been very troubled by the purchase of the Property, especially having regard to her health and other circumstances.

Subsidence

3.11. The Complainant’s evidence about Licensee 1’s alleged failure to warn her about subsidence prior to purchase is complicated by her recounting subsequent events. These include the Kaikoura earthquake on 14 November 2016. Amongst other things, the Committee has seen

a report on the subsidence issue by civil engineers dated 2 March 2017 and a structural assessment and repair methodology recommendations report dated 22 May 2017 by professional building experts engaged by the Complainant’s insurers. These reports indicate a subsidence issue, but do not prove that there was a serious subsidence issue at the time the Complainant purchased the Property which should have alerted the vendor and Licensee 1 to there being a problem.

3.12. The Committee has decided that Licensee 1 did not withhold information from the Complainant about subsidence for at least the following reasons. First, the only first hand (as opposed to speculative) evidence available to the Committee (that of Licensee 1) is that the vendor did not tell Licensee 1 that there was an issue with subsidence. Put differently, there is a dearth of reliable evidence to prove that the vendor did mention subsidence to Licensee

1. Second, the Complainant inspected the Property on a number of occasions before offering

to purchase it, and did not notice subsidence, which reinforces Licensee 1’s evidence that she (Licensee 1) did not notice subsidence on the many occasions she inspected the Property. None of the photographic evidence seen by the Committee shows such an obvious subsidence problem that it could be expected that Licensee 1 will have seen it.

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 Ministry of

Justice-Tribunals (www.justice.govt.nz/tribunals).

5. Publication

5.1. At the Committee’s discretion, the decision will be published without the names or identifying details of the 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

Nigel Dunlop

Date: 14 March 2019

Appendix 1: Relevant provisions

The Real Estate Agents Act 2008 provides:

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.

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

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 9.14 A licensee must not act in a capacity that would attract more than 1 commission in the same transaction