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New Zealand Real Estate Agents Authority |
Last Updated: 22 May 2021
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Before the Complaints Assessment Committee
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In the matter of
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Complaint No: C34835
Part 4 of the Real Estate Agents Act 2008
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and
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Licensee 1:
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Licensee 1 (XXXXXXXX)
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Licensee 2:
Licensee 3:
Licensee 4:
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Licensee 2 (XXXXXXXX)
Licensee 3 (XXXXXXXX)
Licensee 4 (XXXXXXXX)
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The Agency:
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The Agency (XXXXXXXX)
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Decision to take no further action
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29 January 2021
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Members of Complaints Assessment Committee: CAC2106 Chairperson: Maria McElwee
Deputy Chairperson: Amanda Elliott Panel Member: Susanne Guhl
V20200813
Complaints Assessment Committee
Decision to take no further action
1.1. On 10 February 2020 the Real Estate Agents Authority (the Authority) received a complaint against Licensee 1, Licensee 2, Licensee 3, Licensee 4 and, the Agency from the Complainant.
1.2. Licensees 1 and 3 are licensed Agents under the Real Estate Agents Act 2008 (the Act).
1.3. Licensees 2 and 4 are licensed Salespersons under the Act.
1.4. At relevant times Licensees 1, 2 and 4 were employed by the Agency.
1.5. Licensee 3 is employed by the Agency and Agency A, at relevant times Licensee 3 was named in the Agency’s Complaints Procedure as the Company Licensee/Compliance Manager for
Agency A.
1.6. The complaint relates to properties situated at Property 1) and Property 2 (together, the Properties).
1.7. The Complainant says:
- Licensees 2 and 4 did not act on the instructions of the Complainant’s director (the Director) to allow early release of the deposit following the auctions for the
Properties.
discussed the possibility of the tenant moving to alternative premises, within hearing of the tenant’s staff.
thereby creating a hazard.
1.8. The Complainant requested a remedy, being:
- Financial compensation, the amount depending on the findings of the CAC.
- 897 Airpoints to be credited to the Director’s Airpoints membership.
- Licensees 1, 2, 3 and 4 (the Licensees) to be held accountable for their conduct.
1.9. The Licensees and the Agency, via the Agency, responded to the complaint against them.
1.10. In particular, they said:
- The Agency acted in good faith and, in a timely manner in all of its dealings with the Director.
- There was no delay in releasing the deposit for Property 1, its release was in accordance with statutory requirements, the purchaser did not and was not obliged to sign an early release.
- At no point prior to the auction for Property 2 was there any reference to the Complainant seeking an early release of the deposit.
- The early release forms for Property 2 were prepared and circulated to the
Complainant and the purchaser as soon as the deposit was receipted into the Agency’s trust account.
Director signed the revised reserve form as soon as it was presented to him. There was no discussion on price other than the auctioneer conveying the purchaser’s revised position and, ultimately the Complainant accepted the purchaser’s final offer.
rentals.
there was no mention of Airpoints during the campaign for Property 2 and, it was only mentioned again later when the Director became unhappy.
2. What we decided
2.1. On 16 June 2020 Complaints Assessment Committee 1905 considered the complaint and decided to inquire into it under section 79(2)(e) of the Act.
2.2. On 23 October 2020 the complaint was transferred to Complaints Assessment Committee 2106 (the Committee) who also decided to inquire into it under section 79(2)(e) of the Act
2.3. On 26 November 2020 the Committee held a hearing on the papers and considered all of the issues raised by the Director on behalf of the Complainant and, the information gathered during the inquiry.
2.4. The Committee has decided to take no further action on the complaint.
2.5. 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, namely rules 5.1, 6.2, 6.3, 8.3, 9.1 9.2, 9.3, 9.17, 10.2 and 10.3.
3. Our reasons for the decision
3.1. The Committee concluded:
- Licensees 2 and 4 did not fail to act on the Director’s instructions to allow early release of the deposit for Properties. (section 123 of the Act and rule 9.1)
- It is not proven that Licensee 4 told the Director in a bullying manner to immediately accept the offer for Property 2.
- Licensee 4 did not put the Director under undue pressure while negotiating with the purchaser of Property 2 and, nor did Licensee 4 refuse to provide the Director with yield figures at the auction for Property 2. (rules 5.1 and 9.2)
- It is not proven that Licensee 4’s conduct during the kitchen meeting was bullying or unprofessional. (rules 6.3 and 9.2)
- It is not proven that the Agency blamed the Director for the “heated exchange” that occurred while the auction for Property 2 was paused.
- It is not proven that Licensee 2’s conduct during the “phone rage” call breached professional standards.
- It is not proven that Licensees 2 and 4’s appraisals for the Properties were inaccurate. (rules 5.1, 10.2 and 10.3)
- Licensee 2 did not breach the confidentiality of the purchaser of Property 2 or, the tenant of Property 2. (rules 9.3 and 9.17)
- Licensees 1 and 2 did not fail to act quickly enough on the Director’s health and safety concerns regarding signage at the Properties. (rule 9.1)
- The Agency did not offer Airpoints incentives.
- Licensee 3 did not fail in his undertaking to the Mediator. (rule 6.2)
- The Agency did not fail in its contracted commitment to do everything possible to resolve matters in a prompt and professional manner.
- There were no proven supervision or management failures by Licensee 1. (rule 8.3)
Early release of deposits for the Properties
Property 1
3.2. Property 1 sold at auction on 19 September 2019. Settlement was to take place on 1 November 2019.
3.3. On 19 September 2019 after the auction the Director sent an email to Licensee 4 saying “We are hopeful that settlement can be extended to 2020 and have [the Complainant’s lawyer] on the case”.
3.4. The deposit was paid on 23 September 2019 and, on the same day the Agency sent forms requesting early release of the deposit to the Complainant and the purchaser of Property 1 (the Purchaser).
3.5. The Purchaser did not agree to the early release of the deposit, no explanation was given but the Purchaser did advise that they had, in good faith, agreed via the Complainant’s lawyer to extend the settlement date for Property 1.
3.6. Licensees 2 and 4 say in response to this complaint that they understood that the reason why the Purchaser did not agree to the early release of the deposit was due in part to the
Purchaser’s frustration at the Director pressing for and being granted a later settlement date through direct discussion with the parties.
3.7. The Director says this is incorrect because he had no direct contact with the Purchaser until he was contacted by the Purchaser in early January 2020. The Committee interprets the reference to “direct discussion between the parties” simply to mean that Licensees 2 and 4 were not involved in the discussions to extend the settlement date. It is clear from the
evidence that the Complainant wanted to extend the settlement date and, the Committee does not consider that whether the negotiations were conducted by the Director personally or via his lawyers has any material impact on Licensee 1 and 2’s views as to why the
Purchaser declined early release of the deposit.
3.8. When questioned by the Director in early January 2020, the Purchaser told the Director that the early release request had been declined because the Purchaser did not know that the Complainant had signed the early release form and assumed the request had been made to facilitate early payment of the Agency’s commission. The Purchaser then notes that this assumption was clearly incorrect.
3.9. The Complainant says Licensees 2 and 4 failed to act on the Director’s instructions to allow early release of the deposit for Property 1.
3.10. Under Section 123 of the Act unless an agent has a signed authority from all parties to a transaction, an agent must hold deposits received for ten working days.
3.11. Rule 9.1 requires a licensee to act in accordance with the client’s instructions unless to do so would be contrary to law.
3.12. The evidence confirms that Licensees 2 and 4 did follow the Director’s instructions by requesting early release of the deposit as soon as the deposit was paid. However, the
Purchaser was entitled to withhold early release of the deposit and, without the agreement of the Purchaser, Licensees 2 and 4 could not, under section 123 of the Act allow release of the deposit.
3.13. Further, the fact that the Purchaser withheld early release of the deposit on assumptions
made at the time that the Purchaser later said were incorrect is not, in the Committee’s view, evidence of any failings on the part of Licensees 2 or 4.
3.14. The Committee takes no further action concerning this aspect of the complaint.
Property 2
3.15. The Complainant makes the same complainant against Licensees 2 and 4 concerning Property
2. Namely, that Licensee 2 and 4 failed to act on the Director’s instructions to allow early release of the deposit for Property 2.
3.16. Rule 9.1 and section 123 of the Act have been stated above.
3.17. The Director says that because of his experience with Property 1, he wanted the deposit for Property 2 to be released immediately after the auction.
3.18. The Director says he required payment of the deposit for Property 2 by 11 am on the morning after the auction but this did not occur and, as a result, he was unable to make an agreed payment to a third party that was due that day.
3.19. Property 2 was auctioned by the Agency on 5 December 2019. The Director says that he was assured by Licensees 2 and 4 during the marketing campaign for Property 2, that it was the
Agency’s policy to obtain early deposit releases for December sales to ensure that deposit and commission payments could be made before the Christmas break.
3.20. The Director also says he instructed Licensees 2 and 4 to include a special condition in the agreement for sale and purchase (ASP) for Property 2 to provide for early release of the
deposit and, that it was his expectation that the early release forms for Property 2 would be signed prior to or, at worst immediately after the auction for Property 2.
3.21. The Agency says that the deposit for Property 2 was paid in two payments on the day after the auction, Friday 6 December 2019 and the last instalment was received late in the day.
The Agency says the deposit was receipted into its trust account on the next working day (Monday 9 December), an early release form was signed by the purchaser early that morning and, later that morning the early release form was signed by the Director and the deposit was released to him that day.
3.22. Licensees 2 and 4 say that their usual practice is to circulate early release forms once a deposit is paid. Licensees 2 and 4 deny that the Complainant instructed them to include a
special condition in the ASP providing for early release of the deposit and refer to the draft ASP that they had prepared and sent to the Director for approval prior to the auction. They
also say that they did not know the Director required payment of the deposit on the day after the auction.
3.23. The onus is on the Complainant to prove on the balance of probabilities that Licensee 2 and 4 were instructed to include early release of the deposit as a special condition in the ASP. No corroborating evidence had been provided by the Director that would indicate that it is more likely than not that this instruction was given.
3.24. The evidence shows that the draft ASP was sent to the Director for approval prior to the
auction of Property 2. The draft ASP was approved by the Director who noted that he would accept payment of a 5% deposit rather than the usual 10%. This, in the Committee’s view is evidence that the Director did consider the deposit provisions when he reviewed the draft ASP and, if the Director had instructed Licensee 2 and 4 to include a special condition
allowing early release of the deposit then, the Committee considers that the absence of such
a condition would have been raised by the Director at the time.
3.25. The Committee is not persuaded that Licensees 2 and 4 were instructed to include a special condition in the ASP providing for early release of the deposit and, nor is the Committee
persuaded that the Directors expectations as to when the release forms would be signed and the deposit released were communicated to Licensees 2 and 4 prior to the auction for
Property 2.
3.26. The Committee also observes that even if early release of the deposit had been a special condition in the ASP or, if early release forms had been signed prior to or, immediately after
the auction this would not necessarily have ensured that the Director’s expectations as to the timeframe for release of the deposit would have been met. This is because early release of
the deposit was dependent upon the deposit actually being paid.
3.27. The Committee is however, satisfied that it is more likely than not that Licensees 2 and 4 did advise the Director of the Agency’s early deposit release policy for pre-Christmas sales, and likely gave assurances that they would endeavour to have the deposit released to the Complainant within the ten working day period.
3.28. Given that the deposit was released to the Director two working days after the auction of Property 2 is, in the Committee’s view, evidence that any assurances given by Licensees 2 and 4 concerning early release of the deposit were met.
3.29. The Committee takes no further action concerning this aspect of the complaint.
CCTV Footage
3.30. Prior to making this complaint, the Director had asked the Agency to provide him with a copy of the CCTV Footage that captured discussions between the Director and Licensee 4 during a pause in the auction for Property 2.
3.31. The Agency sought legal advice and advised the Complainant’s lawyer that it could not release the CCTV Footage because of privacy concerns.
3.32. When this complaint was made, one of the outcomes sought by the Complainant was that the Director be provided with a copy of the CCTV Footage. That has now occurred and the
CCTV Footage, in nine tracks, has been provided to the Director and the Committee as part of this inquiry.
3.33. The tracks are not consecutive and the interval between each track varies between one and ten seconds. It has been explained to the inquiry that the recordings are based on motion detection, hence the multiple tracks. The reason for the missing seconds between tracks
given by the company responsible for managing the Agency’s security, is that the tracks have been downloaded from the Network Video Recorder (NVR), and the native video stored on
the NVR cannot, because of the time that has elapsed, be retrieved.
3.34. The Director also requested footage of the meeting that took place in one of the Agency’s meeting rooms prior to the auction for Property 2. The Director says that footage would confirm discussions he had with Licensee 2 and Licensee 4 concerning the reserve price,
reduction of commission if the reserve was not met, advice he had received from his valuer and, his price expectations for Property 2.
3.35. The Agency says no footage is available because there were no security cameras in the meeting room.
3.36. Licensees 2 and 4 have not disputed the Director’s account of the discussions that took place at that meeting and, accordingly the Committee has proceeded on the basis that the
discussions that took place were as described by the Director.
Lack of professionalism and unfair pressure
3.37. Rule 5.1 requires a licensee to exercise skill, care, competence and diligence.
3.38. Rule 6.2 requires a licensee to act in good faith and deal fairly with all parties engaged in a transaction.
3.39. Rule 6.3 states that a licensee must not engage in any conduct likely to bring the industry into disrepute.
3.40. Rule 9.2 provides that a licensee must not engage in any conduct that would put a client under undue or unfair pressure.
3.41. The Director says Licensee 4 put him under pressure while negotiating with the highest
bidder for Property 2 and refused to provide him with yield figures for previous commercial property auctions held that day. The Director, in an email to the Agency the day after the auction, described Licensee 4’s conduct as bullying and unprofessional.
3.42. The Director also says that in the days following the auction the Agency wrongly alleged that he was to blame for a “heated exchange” in the kitchen of the auction rooms when the
auction was paused, and that Licensee 2 exhibited extreme “phone rage” during a telephone call with the Director.
3.43. The Director says that when they adjourned to the Agency’s kitchen while the auction was paused, Licensee 4 immediately told him in a bullying manner that he should accept the
highest bid before they lost the purchaser. However, having now reviewed the CCTV Footage, the Director says that this cannot be seen on the CCTV Footage. The Committee agrees and, in the absence of any other corroborating evidence finds this aspect of the complaint not proven.
3.44. Nor is the Committee persuaded that the CCTV Footage corroborates the Directors claim that Licensee 4 put the Director under pressure while negotiating with the purchaser of Property 2 or, that Licensee 4 refused to calculate the yields on the preceding sales.
3.45. The Committee notes that the meeting in the Agency’s kitchen took place after the auction for Property 2 was paused, because the bidding had not reached the Complainant’s reserve price of $4,200,000. At this point the highest bid was $4,150,000.00, there was only one
bidder remaining who had already increased his bid by $150,000.00.
3.46. The CCTV Footage shows that the Director signed a revised auction reserve form as soon it was presented to him by the auctioneer. This was an instruction to the auctioneer to sell Property 2 at $4,150,000.00 and, this occurred prior to the “heated exchange” between the Director and Licensee 4. The Committee agrees with the Agency’s observation that the CCTV Footage does not evidence any discussion on price, other than the auctioneer conveying the purchaser’s revised position.
3.47. The Director says he wanted to know what the yields were for a number of the properties that had sold before Property 2, as this would assist in negotiations with the eventual purchaser. The Director says that if those yields were lower than the yield for Property 2, which they were, this information could and, should have been used by Licensee 4 to
negotiate a higher offer. The Committee notes however, that Licensee 4 was not involved in
negotiations with the purchaser rather, it was the auctioneer who was negotiating with and seeking an improved offer from the highest bidder.
3.48. It is evident from the CCTV Footage that Licensee 4 was focused on ensuring that that any varied terms with the highest bidder were correctly recorded and was frustrated by the
Directors request for yield figures. However, the Director’s claim that Licensee 4 refused to calculate the yield figures is not supported by the CCTV Footage evidence, which shows that Licensee 4 did calculate some of the yields for the previous sales.
3.49. The Director describes Licensee 4’ conduct during the kitchen meeting as bullying and unprofessional.
3.50. The fact that there was an exchange, described by the Director as “heated” between the Director and Licensee 4 in the kitchen while the auctioneer was seeking an improved bid is
not in dispute however, this has not been captured by the CCTV Footage. Given that Licensee 4 is seen apologising and shaking hands with the Director at the beginning of track 5, the Committee considers that it is more likely than not that the exchange occurred during the ten seconds that are missing at the end of track 4 and the beginning of track 5.
3.51. The Agency admits that Licensee 4 was frustrated by the Director’s requests for the yield figures while trying to ensure the correct paperwork was in place and, the Committee accepts that the exchange between Licensee 4 and the Director was most likely emotionally charged. However, there is no corroborating evidence that proves that Licensee 4 was bullying or unprofessional during this exchange and, nor does the CCTV Footage indicate evidence of any other bullying or unprofessional behaviour by Licensee 4 at any other time during the kitchen meeting.
3.52. The Director says that he found the auction process very stressful particularly as he had not previously sold a property as valuable as Property 2. The Committee agrees that auctions can be stressful and, it is not uncommon for tensions to rise. Whilst the Director was initially happy with the price that had been achieved at the auction, it is clear that the Director was unhappy with Licensee 4’s conduct and, as he says, subsequently felt hurt and betrayed by
the response he received from the Agency and the Licensees.
3.53. However, tensions or disagreements between a licensee and their client will not always amount to a breach of professional standards, and in this instance the Committee finds no evidence of undue pressure or duress and, nor is it proven on the balance of possibilities that Licensee 4’s conduct was more likely than not bullying or unprofessional.
3.54. Further, the Director says the Agency wrongly blamed him for the “heated exchange”.
3.55. Licensee 1 noted in his response to the Director after the auction that the Director’s
instructions to Licensee 4 were “quite animated”. Licensee 4 later described the Director’s request for the yield figures as “badgering”. Licensee 2 says he told the Director in a phone call that he was disappointed by his accusations towards Licensee 4 after he had viewed the CCTV Footage.
3.56. Whilst the Agency and the Licensees deny that Licensee 4’s conduct was bullying and unprofessional, the Committee does not consider that the responses given by Licensees 1, 2 and 4 necessarily indicate that they were blaming the Director or saying that the Director was responsible for what occurred. No further evidence has been provided in the course of the
investigation by either the Agency or the Licensees that establishes that the Agency blamed the Director for the “heated exchange”.
3.57. The Director also refers to Licensee 2’s “phone rage” and says he had never experienced “phone rage” of this type before. However, the Director has not provided any detailed comment as to what was said by Licensee 2 during this phone call and, as no detail has been provided, the Committee is unable to make an assessment as to whether Licensee 2’s conduct during the phone call was a breach of his professional standards.
3.58. The Committee takes no further action concerning this aspect of the complaint.
Inaccurate price indications for the Properties
3.59. The Complainant says Licensee 2 and 4 provided inaccurate price expectations for the Properties.
3.60. Rule 5.1 has been stated above.
3.61. Rule 10.2 provides that a client must be provided with a written appraisal that realistically reflects current market conditions and be supported by comparable information on sales of similar land in similar locations. Further, where no directly comparable or semi-comparable sales data exists this must be explained in writing to the client (rule 10.3).
Property 1
3.62. Property 1 was appraised at $425,000.00 to $525,000.00 and, sold at auction in September 2019 for $795,000.00.
3.63. The appraisal for Property 1 was prepared in July 2019 and, noted the two comparable sales referred to were in January 2018 and, there were no comparable sales since that could be used.
3.64. The Director says that prior to auction he was advised that he could expect a price within the early to mid $500,000.00 range.
3.65. Buyer feedback prior to the auction was consistent with the appraised price the Complainant had been given. The Committee is satisfied that the appraisal for Property 1 was prepared in accordance with rules 10.2 and 10.3. Licensees 2 and 4 describe the result as “exceptional” and given that the Director says that he was “delighted” with the result, the Committee takes no further action concerning this aspect of the complaint.
Property 2
3.66. Property 2 was appraised at $3,000,000.00 to $3,200,000.00 and sold for $4,150,000.00.
3.67. The appraisal for Property 2 was prepared in September 2019 and noted that whilst the range adopted appeared conservative there remained some uncertainty over tenancy
arrangements and rental.
3.68. The evidence shows that one of the tenancies was renewed after the appraisal was prepared however, as with Property 1, buyer feedback during the marketing process was consistent
with the original appraisal. The Committee is satisfied that the appraisal for Property 2 was prepared in accordance with rules 10.2 and 10.3 and takes no further action concerning this aspect of the complaint.
3.69. In addition, the Committee has also considered the Director’s criticism concerning the price
range used by Licensees 2 and 4 in the yield sheets prepared by them prior to the auction for Property 2. The Committee does not consider that the price range initially adopted by
Licensees 2 and 4 indicates any lack of skill or care on the part of Licensees 2 and 4 and, the evidence further shows that the price range in the yield sheets was, on the instructions of the Director, amended prior to the auction. Further, the Committee notes that the yield sheets were not appraisals but were simply calculations of actual and expected returns over a given price range prepared for use on the auction day.
Confidentiality breaches
3.70. Rule 9.17 sets out a licensee’s obligations concerning disclosure of a client’s confidential information. “Client” as defined in the Act means the person on whose behalf a licensee
carries out real estate agency work. Accordingly, for the purposes of rule 9.17, the client was the Complainant.
3.71. Under rule 9.3 a licensee must keep the client well informed of matters relevant to the client’s interest.
3.72. The Director says that Licensee 2 breached the confidentiality of the purchaser of Property 2 by disclosing to the Director information about the purchasers banking issues when the purchaser was arranging payment of the deposit for Property 2.
3.73. Specifically, the Director says Licensee 2 told him the day after the auction that the purchaser had paid $200,000.00 of the deposit and his wife had paid the balance. The Director says he told Licensee 2 that this could be because of internet banking daily limits and further says
that the source of the deposit funds was none of his business and, to have been given this information was a breach of Licensee 2’s confidentiality obligations as set out in rule 9.17.
3.74. In contrast, Licensee 2 says the purchaser of Property 2 instructed him to advise the Director that they had a daily limit on withdrawals of $200,000.00 and that the balance of the deposit might not be paid until the next working day.
3.75. Firstly, the Committee notes that rule 9.17 is not applicable because the purchaser was not Licensee 2’s client.
3.76. Secondly, the Committee accepts Licensee 2’s evidence that he was passing on information at the request of the purchaser and, notes that Licensee 2 in passing on that information was meeting his obligations to his client under rule 9.3 by keeping the Director informed
regarding payment of the deposit.
3.77. The Committee takes no further action concerning this aspect of the complaint.
3.78. The Director also says Licensee 2 breached the confidentiality of the tenant of Property 2 when he discussed the possibility of the tenant moving to alternative premises, within hearing of the tenant’s staff.
3.79. Licensee 2 says care was taken in this regard and, as far as he is aware no conversations took place in front of staff. The tenant in an email to the Director says that Licensee 2 did discuss alternative premises with him while his office door was open, he considered this was unprofessional but says despite this he believed his staff were unaware of the discussions.
3.80. As noted above, rule 9.17 is not applicable because the tenant was not the Licensee 2’s client. Further, whilst the tenant expresses the view that Licensee 2’s conduct was unprofessional,
the Committee is not persuaded that the conduct complained of indicates a lack of care or a breach of any other professional standards and accordingly, takes no further action
concerning this aspect of the complaint.
Health and safety concerns re signage
3.81. Rule 9.1 has been stated above.
3.82. The Director says that Licensees 1 and 2 failed to act quickly enough on health and safety concerns raised by him about signage which blew loose from a fence outside Property 2, thereby creating a hazard.
3.83. In particular, the Director says that his instruction to remove the Agency’s signage given to Licensee 2 over the weekend following the auction of Property 2 should have been actioned the next day (Monday), but Licensee 2 did not issue an instruction to the signage company until Tuesday and, the signage was not removed until the Friday of that week.
3.84. Additionally, the Director says that the remnants of a sign that had blown away during a storm the week before the auction of Property 2, were not removed until the Authority contacted the Agency following receipt of this complaint.
3.85. The Director considers that Licensee 1 and Licensee 2’s conduct concerning delays in the
removal of the signage amounts to unsatisfactory conduct and is possibly a breach of section 30 of the Health and Safety at Work Act 2015 and associated regulations.
3.86. Breaches of health and safety legislation does not fall within the Committees jurisdiction. The Committee’s role is to assess a licensee’s conduct as against the Rules and the Act.
3.87. Having reviewed the correspondence provided to the investigation concerning this aspect of the complaint, the Committee does not consider that the timing of Licensee 2’s instruction to the signage company amounted to a breach of rule 9.1. Further, the Committee accepts
Licensee 2’s explanation that his instruction to the signage company was not immediately actioned because the signage company was busy that week due to recent storm damage in the area.
3.88. It is not disputed that the remaining sign remnants were not removed until after this complaint was made. However, there is no evidence of any further discussion or
correspondence between the Director and Licensees 1 or 2 regarding the remaining remnants of the sign or, any other evidence that would indicate that either Licensee 1 or Licensee 2
knew prior to this complaint being made that the signage had not been completely removed by the signage company.
3.89. The Committee finds that no breach of rule 9.1 concerning removal of the signage and, accordingly takes no further action concerning this aspect of the complaint.
Airpoints
3.90. The Director says that Agency advertising indicated he would receive an Airpoints credit on the sale of the Properties.
3.91. Specifically, the Director says that due to the Agency’s advertising that sales of commercial premises earned Airpoints if sold through them, he provided his Airpoints number at the time of signing the documentation for Property 1. The Director says that when he asked Licensee 2
how many Airpoints had been credited he felt cheated when told he would not be credited with Airpoints.
3.92. The evidence shows the Director provided his Airpoints number to Licensee 4 by email after the auction for Property 1 and, inquired at the time as to how many Airpoints he had earned.
However, there is no evidence of any discussions concerning the Airpoints programme with the Agency or Licensees 2 and 4 prior to listing the Properties for sale.
3.93. Licensee 2 says the question of Airpoints was not raised to his knowledge before, during or after the marketing campaign. He says that if it had he would have needed to seek advice as he has not previously used the Airpoints programme.
3.94. The Agency says that the Director was not offered the Airpoints initiative at any point during the campaigns for the Properties. The Agency also says that Airpoints are only made available to vendors of residential and rural transactions.
3.95. The Committee notes that the Agency’s website does say that commercial sales are included in the Airpoints programme but the website also says that “All [Agency’s] offices have the ability to offer Airpoints to their vendors. The decision to offer Airpoints is at the discretion of the agent and the office”1
3.96. The Committee accepts that the Director would have been disappointed to learn that he would not be earning Airpoints. However, the Committee considers that this was a matter
that the Director should have raised when he listed Property 1 for sale with the Agency. The Director could not simply rely on the general Agency’s advertising that he had seen or, the Airpoints logo on the Agency’s letterhead, particularly as is usual for these types of
promotions, the offer was subject to further terms and conditions including the rider that the offer was at the discretion of the agent and the office.
3.97. The Committee takes no further action concerning this aspect of the complaint.
Lack of response from Licensee 3
3.98. Rule 6.2 requires a licensee to act in good faith and deal fairly.
3.99. The Mediator contacted Licensee 3 on 30 January 2020 regarding the Director’s
dissatisfaction with the conduct of Licensees 1, 2 and 4. Licensee 3 is named in the Agency’s Complaints Procedure as the Company Licensee/Compliance Manager for Agency A.
3.100. The Mediator suggested a telephone call the following day (Friday) or over the weekend
because he was away from the following Monday for two weeks. Licensee 3 responded saying he was unavailable but would look into the issues and get back to him the following week.
3.101. The Director says that Licensee 3 failed to honour his undertaking to get back to the Mediator early in the following week to resolve the dispute with the Director relating to Property 2.
3.102. While the Mediator was away, the Director decided to make a complaint to the Authority after concluding that Licensee 3’s failure to respond to the Mediator early in the following week indicated a lack of interest by Licensee 3.
3.103. The evidence shows that Licensee 3 did investigate as promised and, emailed the Mediator on 12 February 2020 saying that he would be happy to discuss with the Mediator once the
Mediator had returned from holiday.
3.104. After being advised by the Mediator that the Director had, in the interim decided to refer his complaint to the REA, Licensee 3 responded saying, “On 30 January 2020 you said you would be away for two weeks and it takes a little longer than 1 working day to investigate a complaint of this nature.” The Director says that this message should have been
communicated to the Mediator in the first week of February.
3.105. The Committee is satisfied that any delay by Licensee 3 in responding to the Mediator was not indicative of a lack of interest or refusal to engage but was as Licensee 3 later explained to the Mediator attributable to the nature of the complaint and the fact that the mediator was away. Further, the Committee does not consider that Licensee 3’s failure to advise the Mediator that he would not be responding within the timeframe indicates a failure to act fairly and in good faith.
3.106. The Committee takes no further action concerning this aspect of the complaint.
Agency’s failure to honour contractual commitments
3.107. The Director says the Agency failed to honour its contracted commitment to do everything possible to resolve the matter in a prompt and professional manner. Specifically, the Director refers to the Agency’s failure to provide the CCTV Footage; act on the Director’s health and safety concerns and respond to the Mediator.
3.108. These concerns have all been addressed in this decision and, no findings have been made against the Agency or, any of the Licensees.
3.109. In making its findings the Committee has also had regard to the manner in which this complaint was dealt with by the Agency and the Licensees.
3.110. The Committee is not persuaded that there were failures by the Agency or the Licensees in their response to this complaint that indicate a lack of promptness or professionalism.
3.111. The evidence shows that Licensee 1 addressed the concerns raised by the Director following the auction of Property 2 promptly and, whilst the Director did not obtain the outcome he sought and did not agree with matters raised in the response, the Committee does not consider the content of the response to be unprofessional.
3.112. Licensee 3’s response, albeit later than originally anticipated was within the timeframes set out in Agency A’s complaints procedure and, was not, in the Committee’s view unprofessional. Further, the Committee does not agree with the Directors suggestion that comments made by Licensee 3 to the effect that “he welcomed the investigation” would be construed by reasonable members of the public as an endorsement of misconduct and unsatisfactory conduct by the Licensees.
3.113. Finally, there is no evidence of a failure or refusal to engage or, a lack of professionalism by the Agency or the Licensees in their response to this investigation.
3.114. The Committee takes no further action concerning this aspect of the complaint.
Supervision and management
3.115. Rule 8.3 requires all salespeople employed by an agency to be properly supervised and managed.
3.116. The Director says Licensee 1 failed to ensure that Licensees 2 and 4 were properly supervised and managed.
3.117. The Director describes Licensees 2 and 4 as “inept” and says their “sloppiness” included the fact that the deposit was incorrectly recorded as 10% of the purchase price in the ASP for Property 2.
3.118. The Committee notes that the ASP was sent to the Complainant’s lawyer on 5 December 2019. The covering letter advised:
“We note the following variations agreed by the Vendor and appended to the contract:
3.119. This confirms that the Complainant’s lawyer was correctly advised as to the level of the deposit and, does not indicate any failure to exercise skill, care or competence nor, any failures as to supervision or management.
3.120. The Director has not provided any other specifics concerning supervision or management failures that address this aspect of the complaint.
3.121. The Committee has not made any unsatisfactory conduct findings against Licensees 2 and 4 or, their supervisor, Licensee 1 and, nor does the evidence before it indicate any overall
failings in supervision or management in respect of the transactions for the Properties.
Accordingly, the Committee takes no further action concerning this aspect of the complaint.
4. Publication
4.1. The Committee directs publication of its decision. This 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.
4.2. 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.
4.3. 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.
5. Your right to appeal
5.1. If you are affected by this decision of the Committee, the right to appeal is set out in section 111 of the Act. You may appeal in writing to the Real Estate Agents Disciplinary Tribunal (the Tribunal) within 20 working days after the date notice is given of this decision. Your appeal must include a copy of this decision and any other information you wish the Tribunal to consider in relation to the appeal. The Tribunal has the discretion to accept a late appeal
filed within 60 working days after the date notice is given of this decision, but only if it is satisfied that exceptional circumstances prevented the appeal from being made in time.
5.2. The Notice of Appeal form, which includes information on filing an appeal, can be located on the Ministry of Justice’s website: https://www.justice.govt.nz/tribunals/real-estate-
agents/apply/.
6. Provisions of the Act and Rules referred to
6.1. The provisions of the Act and the Rules referred to in this decision are set out in the Appendix.
Signed
Maria McElwee Chairperson
Amanda Elliott
Deputy Chairperson
Susanne Guhl Member
Date: 29 January 2021
Appendix: Provisions of the Act and Rules referred to
The Real Estate Agents Act 2008 provides:
78 Functions of Committees
The functions of each Committee are—
(a) to inquire into and investigate complaints made under section 74:
(b) on its own initiative, to inquire into and investigate allegations about any licensee:
(c) to promote, in appropriate cases, the resolution of complaints by negotiation, conciliation, or mediation:
(d) to make final determinations in relation to complaints, inquiries, or investigations:
(e) to lay, and prosecute, charges before the Disciplinary Tribunal:
(f) in appropriate cases, to refer the complaint to another agency:
(g) to inform the complainant and the person complained about of its decision, reasons for the decision, and appeal rights:
(h) to publish its decisions.
79 Procedure on receipt of complaint
(1) As soon as practicable after receiving a complaint concerning a licensee, a Committee must consider the complaint and determine whether to inquire into it.
(2) The Committee may—
- (a) determine that the complaint alleges neither unsatisfactory conduct nor misconduct and dismiss it accordingly:
- (b) determine that the complaint discloses only an inconsequential matter, and for this reason need not be pursued:
- (c) determine that the complaint is frivolous or vexatious or not made in good faith, and for this reason need not be pursued:
- (d) determine that the complaint should be referred to another agency, and refer it accordingly:
- (e) determine to inquire into the complaint.
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 Disciplinary Tribunal against the determination within 20 working days after the day on which
notice of the relevant decision was given under section 81 or 94, except that no appeal may be made against a determination under section 89(2)(a) that a complaint or an allegation be considered by the Disciplinary Tribunal.
(1A) The Disciplinary Tribunal may accept a late appeal no later than 60 working days after the day on which notice was given to the appellant if it is satisfied that exceptional
circumstances prevented the appeal from being made in time.
(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 (ab) the prescribed fee, if any; 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.
123 Money to be held by agent for 10 working days
(1) When an agent receives any money in respect of any transaction in his or her capacity as an agent, he or she must not pay that money to any person for a period of 10 working days after the date on which he or she received it.
(2) Despite subsection (1), a court order or an authority signed by all the parties to the transaction may require the agent to pay the money before the expiry of the period specified in that subsection.
The Rules from the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012 referred to in this decision 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 6.3 A licensee must not engage in any conduct likely to bring the industry into disrepute.
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.
Rule 9.1 A licensee must act in the best interests of a client and act in accordance with the client’s instructions unless to do so would be contrary to law.
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 9.3 A licensee must communicate regularly and in a timely manner and
keep the client well informed of matters relevant to the client’s interest, unless otherwise instructed by the client.
Rule 9.17 A licensee must not disclose confidential personal information relating to a client unless—
(a) the client consents in writing; or
(b) disclosure is necessary to answer or defend any
complaint, claim, allegation, or proceedings against the licensee by the client; or
(c) the licensee is required by law to disclose the information; or
(d) the disclosure is consistent with the information privacy principles in section 6 of the Privacy Act 1993.
Rule 10.2 An appraisal of land or a business must—
(a) be provided in writing to a client by a licensee; and
(b) realistically reflect current market conditions; and
(c) be supported by comparable information on sales of similar land in similar locations or businesses.
Rule 10.3 Where no directly comparable or semi-comparable sales data exists, a licensee must explain this, in writing, to a client.
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