Complaint No C48399 [2023] NZREAA 46 (16 June 2023)

Last Updated: 6 April 2024

Before the Complaints Assessment Committee
In the matter of	Complaint No: C48399 Part 4 of the Real Estate Agents Act 2008
and
Licensee 1:	The Licensee (XXXXXXXX)

Decision to take no further action

16 June 2023

Members of Complaints Assessment Committee: CAC2204 Chairperson: Denise Evans

Deputy Chairperson: Belinda Moss Panel Member: Julian Twiss

V202211

Complaints Assessment Committee

Decision to take no further action

1. The Allegation

1.1. On 24 August 2022, a report was submitted under r 7.2 of the Real Estate Agents Act

(Professional Conduct and Client Care) Rules 2012, regarding The Licensee (the Licensee). The Real Estate Agents Authority (the Authority) referred the allegation to a Complaints

Assessment Committee (CAC2106) on 16 September 20221.

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

1.3. The allegation relates to a residential property at The Property (the Property).

1.4. The allegation details are that the Licensee was involved in two of three sales of the Property over a nine-month period, which saw an “exceptional” capital gain of $685,000

(approximately 43%).

1.5. CAC2106 decided (under s 78(b) of the Act) to also investigate the appraisal the Licensee provided to the Purchaser in the third sale and whether this was provided before the listing agreement for the Property was signed.

1.6. In particular, the Authority said:

1. Was the Licensee involved in the transaction relating to the sale of the Property from Entity 1 to Entity 2 as recorded in the agreement for sale and purchase dated 12

August 2021?

2. Did the Licensee provide Entity 2 with an appraisal of the Property before the signing of the listing agreement for the Property before the third sale?
   

1.7. The Licensee responded to the allegations against her.

1.8. In particular, the Licensee said:

1. She was not involved in the sale from Entity 1 to Entity 2 (the second of the three sales of the Property).
   
2. Regarding the third sale: In October 2021, the Director of Entity 2 signed a listing

agreement to sell four standalone new house packages off the plan. The Licensee and her team prepared an appraisal provided to the vendor. However, not long after the

listing was signed, the vendor changed her mind and decided to sell the Property

instead of the home packages. The Licensee and her team prepared a new appraisal for the vendor before the vendor signed the form to change the selling method to auction.

2. What we decided

2.1. On 27 September 2022, CAC2106 considered the information provided by the Authority and decided to inquire into the allegation under section 78(b) of the Act.

2.2. CAC2106 considered that the complaint also raised issues about the timing of an appraisal prepared by the Licensee. Therefore, CAC2106 decided to inquire into this issue under

1 The complaint was subsequently referred to another committee in May 2023. Refer paragraph 2.3.

section 78(b) of the Act.

2.3. On 8 May 2023, the complaint was transferred to Complaints Assessment Committee 2204 (the Committee), which confirmed the decision to inquire made by CAC2106.

2.4. On 8 May 2023, the Committee held a hearing on the papers and considered all the information gathered during the inquiry.

2.5. The Committee has decided to take no further action on the allegation.

2.6. 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 10.1 and 10.22.

3. Our reasons for the decision

3.1. The Committee concluded that no evidence was provided to show that the Licensee had been involved in the second of the three sales. And in the third sale that the Licensee was

involved in, there is evidence to show that the appraisal was completed on time. In summary, there was nothing before the Committee to indicate any concerns related to the Licensee’s conduct.

Was the Licensee involved in two of the three sales?

3.2. The Property was sold three times in nine months. The sales in question are the second sale on 12 August 2021 between Entity 1 and Entity 2 and the third sale between Entity 2 and Entity 3.

3.3. At the time of the second sale, the Licensee was working for Agency 1. She moved to Agency 2 in August 2021 and worked for Agency 2 at the time of the third sale.

3.4. The Licensee said the second sale was a private sale with no agency or licensee involved. The directors of the vendor (Entity 1) and purchaser (Entity 2) have confirmed this. In addition,

Agency 1 have no record of the sale and received no commission.

3.5. The suggestion that the Licensee was involved in the second sale is likely to have come about because the agreement for sale and purchase was written on an Agency 1 form. The director of Entity 2, who purchased the Property, explained this was because she used the wrong

blank agreement saved on her computer. The Committee is satisfied with the director’s explanation.

3.6. The Committee concluded there is no evidence to suggest the Licensee was involved in the sale in question and has decided to take no further action on this issue.

Did the Licensee provide the vendor with an appraisal before the listing agreement was signed before the third sale?

3.7. This issue relates to the third of the three sales. The vendor, Entity 2, signed a listing

agreement with Agency 2 on 31 October 2021. The Licensee was working for Agency 2 at this time and was the listing salesperson along with another licensee.

3.8. The issue arises because there are inconsistencies in the dates on various forms. For example,

2 Rule 10.1: This rule applies to an agent (and any licensee employed or engaged by the agent) who is entering, or has entered, into an agency agreement with a client for the grant, sale, or other disposal of land or a

business. Rule 10.2 An appraisal of land or a business must be provided in writing to a client by a licensee.

the Agency 2 listing agreement with Entity 2 signed on 31 October 2021 has two

commencement dates, 24 September 2021, which is crossed out, and 1 November 2021. The Comparative Market Analysis (CMA) is dated 3 November 2021. The Conversion of Listing

Authority to Auction Authority form has a commencement date of 11 November 2021. Under Rules 10.1 and 10.2, the CMA must be completed and signed before the listing agreement.

3.9. The Licensee explained that a previous CMA was signed before the listing agreement was signed on 31 October. However, she said she could not provide evidence of the initial CMA because Agency 2’s database doesn’t allow her to see CMA records older than three months.

3.10. She said there was a second CMA because the vendor changed her mind about selling the Property as a housing package and decided to sell by auction instead. As a result, the

Licensee and her team prepared a new CMA signed on 3 November before the auction authority form was signed with a commencement date of 11 November. The Vendor confirmed this.

3.11. The Committee is satisfied with this explanation. The Committee notes there were errors in some dates (for example, the end date of the Agency Agreement is March 2021, which is before the commencement date in November 2021), which could have been better. However, it is satisfied that the second CMA was signed at the same time as the listing was changed to an auction, if not before.

3.12. The Committee concluded that there is no evidence to suggest the Licensee did not provide an appraisal on time and has decided to take no further action on this issue.

4. Publication

4.1. The Committee directs publication of its decision. This decision will be published without

identifying the name or identifying details of the Licensee, the address of the Property, or the third parties.

4.2. 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.

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 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

Denise Evans Chairperson

Belinda Moss

Deputy Chairperson

Julian Twiss Member

Date: 16 June 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.

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 10.1: This rule applies to an agent (and any licensee employed or engaged by the agent) who is entering, or has entered, into an agency agreement with a client for the grant, sale, or other disposal of land or a business.

Rule 10.2: An appraisal of land or a business must be provided in writing to a client by a licensee.