Complaint No C50348 [2023] NZREAA 96 (8 December 2023)

Last Updated: 14 April 2024

BEFORE THE COMPLAINTS ASSESSMENT COMMITTEE

Committee: CAC2205

Complaint: C50348

A complaint under section 74 of the Real Estate Agents Act 2008 by The Complainant

against The Licensee [XXXXXXXX]

DECISION OF THE COMMITTEE

Dated 8 December 2023

COMPLAINTS ASSESSMENT COMMITTEE

Chairperson: Paul Biddington

Deputy Chairperson: Natalie Small

Panel Member: Fale Lesa

V202309

HOW THE COMPLAINT AROSE

1. The complainant, The Complainant, purchased a home at The Property (the Property), marketed by the licensee, The Licensee. At the time of viewing the Property, The Complainant commented that, if she purchased the Property, she intended to renovate the upstairs mezzanine bedroom by altering the roofline to give more head room on that level. At the time of purchasing, The Complainant was not aware The Licensee owned the neighbouring property.
   
2. After purchasing the Property, The Complainant began planning the renovations, and was advised that in order for building consent to be granted, the Property’s neighbour would need to consent to the alterations. The Complainant discovered The Licensee owned the affected neighbouring property and asked The Licensee for her consent. The Licensee refused to consent to the alterations.
   

THE COMPLAINT

3. Against this background, The Complainant complains that The Licensee sold The Complainant a property without disclosing all relevant information. The Complainant alleges that, prior to the sale, The Licensee knew of The Complainant’s plans to make alterations to the mezzanine floor of the Property, and with that knowledge, The Licensee failed to disclose to The Complainant that The Licensee was a neighbour from whom consent would be needed to undertake those alternations.
   

THE ISSUES

4. The Committee identified the following issues:
   
   1. Did The Licensee have knowledge of the work The Complainant wanted to do in the Property and if so, what was the extent of The Licensee’s knowledge?
      
   2. Was The Licensee obliged to disclose that she was a neighbour (who owned the property next door to the Property) who may be required to give consent for the work?
      

OUR DECISION

5. We found that:
   
   1. On issues 1 and 2, no further action was necessary or appropriate.
      

CONSIDERATION OF THE ISSUES

6. Issue One: Did The Licensee have knowledge of the work The Complainant wanted to do in the Property and if so, what was the extent of her knowledge.
   
7. Prior to her offer to purchase the Property going unconditional on 28 January 2022, The Complainant viewed the Property on two occasions: 4 January 2022 (first viewing) and 11 January 2022 (second viewing). The Licensee was present for both viewings.

8. The Licensee states that during the first viewing she was not present on the mezzanine floor when The Complainant discussed planned alterations with those who accompanied her to the viewing. During the second viewing, The Licensee states she remained downstairs for the duration of the viewing. The Licensee referred to Covid protocols at that time which meant she kept her distance during viewings.
   
9. By contrast, The Complainant says The Licensee was present, during both the first and second viewings, when she discussed altering the roofline to create more headroom in the mezzanine area. During the first viewing, The Complainant was accompanied by her friends, Individual 1 and Individual 2, as well as her two sisters. At the second viewing The Complainant was accompanied by her three children. Those who accompanied The Complainant for each viewing were asked by the investigator whether The Licensee was present during renovation discussions.
   
10. As regards to the first viewing, the evidence of both Individual 1 and The Complainant’s Sister, one of the complainant’s sisters, is that The Licensee was present when those attending discussed the possibility of making alterations to the mezzanine floor. Individual 1 states The Licensee was present on the mezzanine floor when he climbed back into the room after viewing the roof and they discussed the condition of the roof and headroom. The Complainant's Sister states that after viewing the mezzanine area, those attending discussed the possible alterations while standing in the lounge area, below the mezzanine, where The Licensee was also present.
    
11. As regards to the second viewing, the evidence of all three of The Complainant’s children is that while The Licensee was not present on the mezzanine floor when they discussed the alterations with their mother The Complainant, it was an open space with no doors or walls between the mezzanine and the lounge space below. In their view, the discussions were well within earshot of The Licensee who was in the lounge area below the mezzanine.
    
12. On balance, the Committee finds The Licensee must have been aware of The Complainant’s intention to renovate the mezzanine area. Evidence of the openness between the mezzanine area and lounge room below, where The Licensee says she remained for the second viewing, supports a finding that, at the very least, she heard the parties discussing the planned renovations. In addition, several witnesses made reference to a comment made by The Licensee to the effect that the property would have sold faster, or been more appealing to more purchasers, if the ceiling height in the mezzanine area was not so low. On that basis, we are satisfied The Licensee was aware of The Complainant’s intentions to renovate the mezzanine area’s ceiling height.
    
13. However, that is the extent of the discussions as they were in early January 2022 – a general intention to make alterations. There is no evidence to suggest The Licensee (or even The Complainant) was aware the consent of the neighbour would be required for those alterations to be made, nor that The Licensee had turned her mind to whether she, as an affected neighbour, would or would not give her consent.
    
14. While the Committee finds The Licensee did have knowledge of The Complainant’s general intention to renovate the mezzanine area, having such knowledge does not breach the

Conduct and Client Care Rules, and accordingly, the Committee has determined to take no further action pursuant to s 89(2)(c) of the Act.

Issue Two: Was The Licensee obliged to disclose that she was a neighbour (who owned the property next door to the Property) who may be required to give consent for the work?

15. The Complainant alleges The Licensee breached her professional obligations by not disclosing she was a neighbour of the Property sold to The Complainant, knowing The Complainant was buying it intending to do the alterations which would require the consent of the next-door neighbour.
    
16. The Licensee states she did not wish to disclose her home address as she was a single woman living on her own and did not feel comfortable doing so. The Licensee states she sought advice from her supervisor as to whether she had to disclose she was the owner of, and lived at, the Property next door and was advised she was not required to do so.
    
17. Firstly, as stated above, there is no evidence that at the time of marketing the property either party was aware the consent of the neighbouring property owned by The Licensee would be required to complete the renovations The Complainant intended to do at the Property. Given that, there was no reason for The Licensee to believe the fact she owned the neighbouring property would have any impact on The Complainant’s plans for the Property.
    
18. Secondly, neither the Professional Conduct and Client Care Rules nor the Act require a salesperson marketing a property to disclose they are the owner of a neighbouring property. As stated by The Licensee, she is entitled to keep her private information confidential.
    
19. Accordingly, we find The Licensee was not required to disclose she owned and lived at the neighbouring property. That being said, given both properties were residential properties in a small settlement In The Area, it is hard to imagine The Licensee would have been able to maintain her privacy for very long. The Licensee was living in the neighbouring property, therefore it would seem the new purchasers of the Property would discover that fact at some point after taking possession of the Property. If The Licensee was highly concerned with maintaining her privacy, she should have suggested another agent market the Property rather than herself.
    
20. Given the Committee finding that The Licensee did not breach her professional obligations by not disclosing that she owned and lived at the neighbouring property, the Committee has determined to take no further action pursuant to s 89(2)(c) of the Act.
    

THE OUTCOME

21. The Committee has made the following findings:
    
    1. No further action will be taken in relation to the complaint against The Licensee under s89(2)(c) of the Real Estate Agents Act 2008 (Act).
       

PROVISIONS OF THE ACT AND RULES REFERRED TO

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

PUBLICATION

23. The Committee directs publication of its decision. The decision will be published without the names or identifying details of the Complainant (including the address of the Property), any third parties and the Licensee.
    

RIGHT TO APPEAL

24. 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.
    
25. 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.
    

The Notice of Appeal form, which includes information on filing an appeal and the prescribed fee can be located on the Ministry of Justice’s website: https://www.justice.govt.nz/tribunals/real-estate- agents/apply/.

Signed

Chairperson:

Paul Biddington

Deputy Chairperson:

Natalie Small

Panel Member:

Fale Lesa

Date: 8 December 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.