Complaint No C45644 [2021] NZREAA 75 (3 November 2023)

Last Updated: 10 April 2024

Before the Complaints Assessment Committee
In the matter of	Complaint No: C45644 Part 4 of the Real Estate Agents Act 2008
and
The Licensee:	The Licensee (XXXXXXXX)

Decision to take no further action

3 November 2023

Members of Complaints Assessment Committee: CAC2301 Chairperson: William Acton

Deputy Chairperson: Amanda Elliott Panel Member: Susanne Guhl

V202211

Complaints Assessment Committee

Decision to take no further action

The Complaint

1. On 10 January 2022 the Real Estate Agents Authority (the Authority) received a complaint against The Licensee (the Licensee) from The Complainant (the Complainant).
   
2. The Licensee is a licensed Salesperson under the Real Estate Agents Act 2008 (the Act).
   
3. The complaint relates to a property situated at The Address (the Property).
   
4. On 27th September 2022 the Complaints Assessment Committee CAC 2108 considered the information provided by the Authority and decided to inquire into the allegations under section 78(b) of the Act.
   
5. On 20 March 2023 the complaint was transferred to Complaints Assessment Committee 2301 (the Committee), they confirmed the decision to inquire made by CAC 2108.
   
6. On 11 May 2023 the Committee held a hearing on the papers and considered all the information gathered during the inquiry.
   
7. The Committee has decided to take no further action on the complaint. This decision was made under section 89(2)(c) of the Act.
   

Background to the Complaint

8. The Complainant, The Complainant, and her former spouse, Individual 1, were the beneficial owners of the Property which was their matrimonial home.
   
9. For mortgage reasons only The Complainant’s name was registered on the certificate of title, however, Individual 1 had lodged a caveat to protect his unregistered equitable interest.
   
10. After Individual 1 and The Complainant separated, and to record the terms of their separation, they entered a “Separation and Relationship Agreement “(the Separation Agreement).
    
11. Under The Separation Agreement Individual 1 and The Complainant agreed that Individual 2 would be the vendor’s named solicitor for the Property’s sale.
    
12. To help facilitate the sale process, Individual 2 set up a chat group through the platform Online with Individual 1, The Complainant, the Licensee, (whom he introduced to the other two) and himself.
    
13. After the introduction, Individual 2 advised the Licensee that she was the appointed agent and should do an appraisal. He also told her that the sale was due to a separation. He then forwarded the Licensee a copy of the Certificate of Title and Individual 1’s caveat.
    
14. It was not until after the formation of the chat group, that Individual 1 and The Complainant signed the Separation Agreement. A copy of which was then given to the Licensee by

Individual 1 in confidence.

15. The part of the Separation Agreement relating to the Property, specified the process and the timing of the sale. Individual 1 had the authority under the agreement to appoint the

Licensee who was to conduct the sale of the Property, and to appoint a valuer if required.

16. However, as The Complainant was the legal owner, only she signed the Listing Agreement. Although Individual 1 appointed the Licensee, negotiated the reduction in the commission, and paid the marketing budget and was always an active participant in the Online

conversations.

17. The Property went to auction and failed to sell but was later sold by negotiation at a price that was agreeable to both The Complainant and Individual 1.
    

Against this background the Complainant complains:

18. In particular, the Complainant said:
    
    1. The Licensee’s focus was to act on instructions from a third party, Individual 1, outside of the Barfoot & Thompson Listing Agreement.
       
    2. The Licensee did not always involve the Complainant when key decisions needed to be made and took instructions from Individual 1, who was not named on the Property’s Title.
       
    100. The Licensee’s position as agent required her to obtain the Complainant’s instructions and act only for her as the controlling principal in this contractual relationship.
         
    4. The Listing Agreement dated 30.03.2021 was not adhered to and was altered by the Licensee who should have obtained her signature to extend any date beyond the end date she had signed, being 30.06.2021.
       
    5. When the Complainant detected the dates had been changed without her knowledge, the Licensee’s explanation was that Individual 1 had instructed her to alter the

contract.

6. The Licensee assisted Individual 1 in accessing the Property to obtain a property valuation without her knowledge when the Complainant had said no to getting a valuation.
   
7. That the alleged tampering of certain signed and initialed pages may provide a pecuniary advantage to some person or persons who commit such an offence.
   
8. That she only allowed Individual 1 to stay in the Online group to obtain real estate information.
   

The Complainant requested a remedy, being:

19. That 50% of the agency commission is refunded to her.
    

The Licensee responded to the complaint against them.

20. In particular, the Licensee said:
    
    1. The Complainant and Individual 1 were introduced to her by Individual 2, the Lawyer,

then acting for them both in the sale of the Property, as they had equal ownership and they both wanted to sell their family house.

2. Individual 2 set up a chat group “Sale of The Address” which included the Complainant,

Individual 1, the lawyer, and the Licensee.

100. From the beginning of the listing, she recognized this sale included two beneficial owners, the Complainant and Individual 1, and used the Online group for all communication of the marketing process from that time until the end of the sales process, comprising of price feedback and listing and sale and purchase agreements.
     

4. Individual 2 posted the caveated title to the group and clearly introduced the

Complainant and Individual 1 as both being beneficial owners. He said that they would manage the marketing and selling of the property together, as had been agreed in the Separation Agreement.

5. She then simply followed those instructions as agreed by all parties at the outset and as per their mutual agreement.
   
6. Individual 1 showed the Separation Agreement to her confirming he was the key person to manage the selling process under clause 3.8 & 3.9.
   
7. The Complainant never disputed this arrangement and had left her to deal with

Individual 1. She never said that she was only to deal with the Complainant. Nor did the Complainant advise that she needed to seek her permission before the valuation was done.

8. The original Listing Agreement was emailed to the Complainant on 18 March and was a 90-day Listing Agreement as requested by both the Complainant and Individual 1.
   
9. The Complainant added some information, signed the Listing Agreement, and sent it back on 10 April 2021. This meant some information needed to be adjusted due to the delay in getting the signed copy back.
   
10. The house key was given to her by Individual 1, after the Listing Agreement was signed. He also retained a key.
    
11. The modified Listing Agreement date change came from Individual 1, who wanted the listing date modified from 26th April to 26th July.
    

50. The reason for this request, was the need for the Property to be on the market for 90 days as both he and the Complainant had previously agreed.
    

13. On 18 June the Complainant contacted her regarding the modified date, and the Licensee became aware that the parties were not in agreement.
    
14. As a result, she called and emailed them to say that she did not want to be involved in their argument and would revert to the original date unless they had an agreement.
    
15. Her manager also met the Complainant and explained and confirmed that they would follow the original listing agreement of 30th June.
    
16. The Independent Property Valuer valuation was agreed to by the Complainant and Individual 1 under the Separation Agreement Clause 3.5c & 3.10d & 3.11 & 3.12.
    
17. There was a discussion, between the Complainant, Individual 1, and Individual 2 about when The Independent Property Valuer would come to do the valuation, on the chat group.
    
18. Individual 1 and the valuer were at the Property together, but Individual 1 had brought

the wrong key. So, he called the Licensee to open the door for the valuer, as he was already at the house. Individual 1 left the Property before she arrived.

19. That the Complainant would have seen the Online discussion where Individual 2 had referred to obtaining an Independent Property Valuer valuation and the Complainant never said to her that she did not want this valuation.
    
20. It was after the Independent Property Valuer valuation, that the Complainant said that she was the sole owner of the Property, not Individual 1, and that the Licensee should only listen to and deal with her and not Individual 1. The Complainant had not said this during the previous 2 months of marketing and had always requested she deal with

Individual 1.

21. The Comparative Market Analysis report was adjusted from $1.1 to $1M before listing the Property on the market. This was after receiving the legal title, which proved that there were no legal carparks belonging to the Property.
    

5. This information was passed on to the Complainant during the phone and Online discussions on 2nd May 2022.

23. The driveway and parking issues were repeatedly raised by the Licensee with feedback provided to the Complainant and Individual 1, since the marketing had started and after each open home.
    

10. Four Sale and Purchase Agreements were presented and were discussed with both of them.
    

25. She understood that the caveat and Separation Agreement defended Individual 1’s rights and she “had been informed of this from day one”. That is why she started dealing with the two of them from the beginning.
    
26. She was also aware that under Clause 3.8 of the agreement, the Complainant accepted that Individual 1 was to appoint and work with their appointed listing agent. And that reasonably, the listing agent working on the sale of the Property should take

instructions from Individual 1.

The consideration of the issues:

We, The Complaints Assessment Committee, must consider the following issues:

(a) Was the conduct of the Licensee unsatisfactory in relation to the Licensee making several amendments to the Listing without consulting the Complainant or seeking her permission? (S 72 and Rules 5.1 and 6.4)

(b) Was the conduct of the Licensee unsatisfactory in that the Licensee took instructions from Individual 1 to make changes to the Listing Agreement when he was not the client? (S 72 and Rules 5.1 and 6.4)

(c) Was the conduct of the Licensee unsatisfactory in that the Licensee provided access to the Property for Independent Property Valuer to conduct a registered valuation without seeking permission from the Complainant?

(d) Was the conduct of the Licensee unsatisfactory in that the Licensee did not keep the Complainant updated about relevant matters, such as providing an updated appraisal?

(e) Was the conduct of the Licensee unsatisfactory in that the Licensee failed to meet her fiduciary obligations to the Complainant by not seeking clarification or instructions from the Complainant about matters relating to the transaction?

The Relevant Legislation:

Section 72 Real Estate Agents Act 2008 provides that:

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.
  

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

6.1 A licensee must comply with fiduciary obligations to the licensee's client.

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

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.

Was the conduct of the Licensee unsatisfactory in that the Licensee took instructions from Individual 1 to make changes to the Listing agreement when he was not the client? (S 72 and Rules 5.1 and 6.4)

21. The Committee has chosen to respond to the above Complaint first, as it considers the

determination of the roles of both Individual 2 and Individual 1 in relation to this transaction is paramount.

22. The Committee accepts that there were two separate but interrelated legal agreements with regard to the sale of the Property. The first being the Separation Agreement which was signed and agreed to amicably, and the second being the Listing Agreement for the Property.
    
23. There is no dispute that Individual 2 was the Complainant’s agreed solicitor at the time, and as such was designated with her authority. As a result, he made it clear when setting up the chat group, that its purpose was to help the participants’ communication throughout the selling process.

24. There is also no dispute that from the outset, the Licensee was aware from Individual 2, that the Complainant and Individual 1 were equal owners of the Property, and they were selling the Property together (even though only her name was on the legal title).
    
25. That they had agreed in the Separation Agreement to the process of selling and Individual 2 provided the Licensee with a copy of Individual 1’s caveat protecting his interest to indicate that ownership.
    
26. Having received a copy of the Separation Agreement signed by the Complainant and

Individual 1 the Licensee was satisfied that as the person who appointed her, despite not signing the agency agreement, Individual 1 had the requisite authority to give her instructions (Clause 3.8 and 3.9).

27. The Committee does not consider this an unreasonable assumption on the Licensee’s part, given that for over two months, the Licensee, Individual 1, and the Complainant clearly participated in the chat group, and that during this time, there is no doubt that the Licensee continued to treat both Individual 1, and the Complainant as the owners of the Property.
    
28. Individual 1’s involvement was seemingly open and transparent, and it is apparent from the chat group that the Complainant had full knowledge of his participation, due to the

discussions regarding the marketing process, the photos, the selling price, the open home feedback, and the auction process. In addition, the four agreements were all discussed and

checked by both Individual 1 and the Complainant. The Committee also notes that clause 3.8 of the Separation Agreement stated, “Ling agrees that Individual 1 shall appoint his preferred real estate agent...”, which further supports that Individual 1 was allowed give instructions to the Licensee.

29. At no stage did the Complainant correct the Licensee’s understanding that Individual 1 was not a fully active participant in the process, nor did she state that the Licensee must only take instructions from her.
    
30. The Committee also notes that when the Licensee became aware that the Complainant was not actually in agreement with Individual 1 as to the alteration of the Listing date, the

Licensee immediately tried to rectify this misunderstanding and offered to either cancel the agreement or revert to the previous agreed date.

31. Whilst the Committee accepts that in normal circumstances a licensee should not take

instructions from any person other than a client, being the vendor who signed the agency agreement or their solicitor, in this instance, the Committee does not conclude that the

Licensee’s conduct was unsatisfactory in taking instructions from Individual 1. Due to the Complainant’s tacit acceptance that Individual 1 was an owner, and as such was equally

involved in this transaction and from what Individual 2 had told her, it was not unreasonable that she initially accepted his instructions regarding the change of the Listing Agreement date.

Was the conduct of the Licensee unsatisfactory in relation to the Licensee making several amendments to the Listing without consulting the Complainant or seeking her permission? (S 72 and Rules 5.1 and 6.4)

32. Given the Committee’s above reasoning and conclusion that the Licensee’s conduct was not unsatisfactory in receiving instructions from Individual 1, and that upon realizing there was no agreement from the Complainant to the new date, she immediately offered to revert back to the original date, which is what occurred, as the Listing finished on that date.

33. To determine this complaint, the Committee has for completeness also considered the

Licensee’s actions with regard to the reasonableness of the alterations that she made to the agreement.

34. The Committee notes that the Complainant did not return the signed Listing Agreement

which she received on the 18th of March, until the 9th of April. Meaning the Property was not able to be listed until the 29th of April. As the Licensee knew from the terms of the Separation Agreement that the Property was required to be on the market for 90 days, it seems not

unreasonable that she accepted instructions that the original dates needed to be changed to reflect this.

35. The Committee also notes that the Complainant made no objection and accepted without complaint the other necessary alterations the Licensee made to the agreement, made

necessary due to the delay in signing and not getting the property to market for 40 days, being the agency date, auction date, settlement date, search indicator, lawyer information, and open home checklist.

36. The Committee, considering this background, accepts that the Licensee’s conduct was not in breach of any rules in these particular circumstances.
    

Was the conduct of the Licensee unsatisfactory in that the Licensee provided access to the Property for Independent Property Valuer to conduct a registered valuation without

seeking permission from the Complainant?

37. Both Individual 1 and the Licensee provided evidence that the Licensee only gave access to

the Valuer because Individual 1, who was known to have a key, requested the Licensee come and open the door as he had come with the wrong key.

38. The Committee notes from the Separation Agreement, clauses 3.5 and 3.12, that the Complainant was aware that there could be a valuation and by signing the Separation Agreement has agreed that a valuation could occur.
    
39. Given the Committee accepts that the Complainant was or should have been aware of the Valuer’s visit due to the chat group conversation, the Committee does not consider the

Licensee’s actions were unsatisfactory for unlocking a door at the request of a co-owner, who, except for an inadvertent error, could have opened the door without the Licensee’s

assistance.

Was the conduct of the Licensee unsatisfactory in that the Licensee did not keep the Complainant updated about relevant matters, such as providing an updated appraisal?

40. The Committee accepts that the Complainant was kept updated by the Licensee in relation to all relevant matters relating to the Property via the chat group and discussions with the

Licensee. The Committee has also been provided with an Online screenshot which shows that an updated appraisal was sent to the Complainant on 2 May 2021. The Complainant’s position is that the updated appraisal was not presented to her. The Committee’s is unsure

why the Complainant considers that it was not presented to her and from the evidence it has seen accepts that the updated appraisal was provided to the Complainant. The Committee’s view is that it did not receive adequate evidence from the Complainant to indicate that the Complainant was not kept informed of all matters relevant to the Property.

41. The Committee also finds this complaint perplexing considering the Complainant’s other comments regarding her feeling pressure, due to the Licensee’s attempts to contact her regarding sales agreements.

Was the conduct of the Licensee unsatisfactory in that the Licensee failed to meet her fiduciary obligations to the Complainant by not seeking clarification or instructions from the Complainant about matters relating to the transaction?

42. Due to our above reasoning in relation to the other issues of this complaint, the Committee does not consider that the Licensee failed to meet any fiduciary obligations to the

Complainant.

43. However, the Committee strongly advises the Licensee that in circumstances such as this, where there is an equitable as well as a legal owner, she should obtain clear written

instructions either from the client or their solicitor as to who has the authority to give her instructions.

What we decided

44. We find that the conduct of the Licensee was not unsatisfactory nor in breach of S72 of the Act nor rules 5.1, 6.1, 6.4, and 9.1 of the Real Estate Agents Act (Professional Conduct and Client Care) Rules 2012.
    
45. The Committee notes that transactions with multiple owners going through personal issues can be difficult to navigate and a licensee must balance their obligations to both clients. On balance the Committee considers that the Licensee acted in good faith and exercised skill and care while navigating the relationship with both parties. Ultimately the Committee therefore considers no further action is required.
    
46. 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, as set out in the Appendix.
    

Publication

47. 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.
    
48. The Authority will publish the Committee’s decision after the period for filing an appeal has ended, unless the Real Estate Agents Disciplinary Tribunal (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.

49. 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.

Your right to appeal

50. 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 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.

51. 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/.

Provisions of the Act and Rules referred to

52. The provisions of the Act and the Rules referred to in this decision are set out in the Appendix.
    

Signed

William Acton Chairperson

Amanda Elliott

Deputy Chairperson

Susanne Ghul Member

Date: 3 November 2023

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.

Section 72: 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.

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.

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

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.