Complaint No C54735 [2024] NZREAA 42 (25 July 2024)

Last Updated: 9 December 2024

BEFORE THE COMPLAINTS ASSESSMENT COMMITTEE

Committee: CAC2204

Complaint: C54735

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

against Licensee 1 [XXXXXXXX]

and Licensee 2 [XXXXXXXX]

DECISION OF THE COMMITTEE

Dated 25 July 2024

COMPLAINTS ASSESSMENT COMMITTEE

Chairperson: Denise Evans

Deputy Chairperson: Belinda Moss

Panel Member: Julian Twiss

V202309

HOW THE COMPLAINT AROSE

1. This complaint concerns a property for sale that was broken into, and items were stolen by thieves who broke into the listing licensee’s lockbox to obtain the key. The Complainants are the Vendors.
   

THE COMPLAINT

2. Against this background, the Complainants complain that:
   
   1. The Licensees had a duty of care to take with their Property. They did not take reasonable security precautions when they left the house key for the Property in a lockbox at the front of the Property, visible from the street. This resulted in a burglary.
      
   2. The Licensees provided incorrect information in their correspondence stating that the lockbox was not visible from the street when it was clearly visible. The Licensees also said they agreed to them using a lockbox, but they did not. They would have declined its use due to security concerns.
      

THE ISSUES

3. The Committee identified the following issues:
   
   1. Issue one: Whether Licensees 1 and 2 complied with their professional obligations and took sufficient care to ensure the security of the Property by leaving the Property’s key in a lockbox.
      
   2. Issue two: Whether Licensees 1 and 2 complied with their professional obligations when responding to the complainant's concerns after the burglary at the Property.
      

CONSIDERATION OF THE ISSUES

Issue one: Whether Licensees 1 and 2 complied with their professional obligations and took sufficient care to ensure the security of the Property by leaving the Property’s key in a lockbox.

The location of the lockbox

4. A licensee must ensure the security of a property (Rule 9.5a).
   
5. The Complainants say the lockbox was clearly visible from the street, and they weren’t aware that a lockbox was being used by the Licensees. They have stated that the street isn’t safe and includes social housing and gang houses.
   
6. The Licensees say that the key was only visible from the street if the gate was open or if someone entered the Property. The gate was usually latched. They say that using lockboxes is standard practice, and a lockbox was used when the Property was previously on the market with the same two Licensees and for the same Vendors a year earlier. Using a lockbox again was discussed during a phone call with the Complainants.

7. The Committee has seen photos of the lockbox and agrees it could be seen from the street by anyone of above-average height looking over the gate and was fully visible when the gate was open. It would not have been clearly visible when the gate was closed unless someone looked over the fence. It was placed on the poles supporting the carport closest to the street. The Licensees could have placed it in a less obvious location, for example, at the back of the Property.
   
8. The Committee has identified no link between the lockbox's location and the break-in. It is usual for agencies to use a lockbox when selling a property. The Property was obviously for sale because there was a For Sale sign on the street. Therefore, it was likely there would be a lockbox somewhere on the Property. It could be argued that the relatively public location of the lockbox could have been considered a deterrent to anyone breaking into the lockbox itself. However, on balance, a location at the back of the Property, out of view of the street, would have been preferable.
   
9. The Licensees have provided no written record of a phone conversation with the Complainants about using a lockbox. The Committee has seen no evidence that the Complainants were advised in writing that a lockbox would not be used. The Committee is satisfied that a conversation will likely occur and that the Licensees informed the Complainants they would use a lockbox. In any case, it is agreed that a lockbox had been used when the Agency had listed the Property previously, and the Complainants were aware of that then and could have questioned the repeated use of a lockbox if that was of concern.
   
10. The Committee has decided to take no further action on this issue in relation to both Licensees. However, it notes that all licensees should carefully consider where they place lockboxes.
    

Issue two: Whether Licensees 1 and 2 complied with their professional obligations when responding to the complainant's concerns after the burglary at the Property.

The Licensees’ response to the break-in

11. Rule 9 describes client and customer care. A licensee must act in the best interests of their client.
    
12. The Complainants say the two Licensees declined their request for a fee reduction or to meet to discuss them after the break-in and burglary, and did not acknowledge any responsibility for what had happened.
    
13. The Licensees say that on the day of the burglary it was Licensee 1 who noticed the front door was open when he arrived at the Property for an open home. It was obvious that the Property had been broken into and he immediately called the Police and advised of the burglary and obtained a Police reference number. He then called the Complainants, advised them of the burglary and provided the Police reference number. He met the Locksmith that afternoon to change the locks. The following day, Licensee 1 met the investigating Police person on site, and later that week, he met the Complainant's Insurance Maintenance person on-site to give access, make a list of what was taken and arrange for the Property to be cleaned up. Although the Licensees work as a team, most of the response was by Licensee 1.

14. The Licensees subsequently advised the Complainants that the burglary resulted from forced entry into the lockbox, and as such, they were not responsible.
    
15. The Committee has reviewed the Licensees’ response to the break-in and finds that Licensee 1 complied with his professional obligations when responding to the Complainants’ concerns after the burglary at the Property. He did everything possible and reasonable and demonstrated good aftercare to the Complainants and the Property.
    
16. The Committee has decided to take no further action with regard to the issue for both Licensees.
    

THE OUTCOME

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

PROVISIONS OF THE ACT AND RULES REFERRED TO

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

PUBLICATION

19. 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 Licensees.
    

RIGHT TO APPEAL

20. 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.
    
21. 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.
    
22. 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: Denise Evans

Deputy Chairperson: Belinda Moss

Panel Member: Julian Twiss

Date: 25 July 2024

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 9: 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 9.5a: A licensee must take due care to ensure the security of land and every business in respect of which the licensee is carrying out real estate agency work.