Ministry of Justice

Penalty / misconduct / licensee failed to explain risk of weathertightness of cladding / Real Estate Agents Act 2008, s3, s110 / Professional Rules 2012, r5.1, r6.4, r10.7 / licensee censured, to provide apology, and fined $8,000 / compensation / loss on re-sale closely connected, but reduced by 25% for disclosure of weathertightness issue on re-sale and short timeframe between purchase and re-sale / expenses relating to property, weathertightness report, alternative accommodation, and expenses relating to resale, allowed but only when supported by evidence / general damages for emotional harm not allowed / discretionary reduction for contributory negligence (15%) and non-disclosure of risk of chance rather than actual weathertightness (15%) / compensation of $34,192.42 and costs of $13,228.60 awarded

Application for review / Registrar’s determination not to pursue a supplementary complaint as it was not sufficiently serious to warrant further action / applicant applied to review Registrar’s decision / application for non-party discovery / Real Estate Agents Act 2008, s 74(3)(a), s 112 / HELD / Registrar not required to conduct investigation on a complaint and has no power to require non-parties to produce documents / incumbent on complainant to put before Registrar sufficient and credible evidence to support allegations to justify referral to a Committee / insufficient evidence to support applicant’s suspicion licensees played role in prompting an IRD audit in an act of retaliation / not the role of the Tribunal on an application for review to obtain evidence that may support a complaint / application for non-party discovery dismissed

Penalty / unsatisfactory conduct / commercial property marketed with incorrect boundary and overstated carparking area / Tribunal previously found licensee breached rr 5.1 and 6.4 by failing to disclose boundary discrepancies and material information affecting use of carparks / Real Estate Agents Act 2008, s72, s110, s110A / Professional Conduct and Client Care Rules 2012, r5.1, r6.4 / HELD / conduct at upper end of unsatisfactory conduct / licensee aware of risk boundary depiction was incorrect but failed to investigate or correct marketing material / censure, training and apology warranted / fine of $7,500 imposed / compensation determined according to losses closely connected to unsatisfactory conduct / purchaser entitled to recover surveying, valuation and expert costs incurred investigating boundary issue / legal costs relating to dispute with vendor insufficiently connected and declined / claim for diminution in value and lost carpark leasing potential not proven on evidence / purchaser awarded compensation of $15,344.19 / costs of $11,700 awarded, reduced from usual starting point to reflect failure to prove misconduct charges

Appeal / residential property with direct-fixed monolithic cladding / purchasers alleged inadequate disclosure of weathertightness risks / Committee found licensee guilty of unsatisfactory conduct for inadequate disclosure / Real Estate Agents Act 2008, s89, s93, s111 / Professional Conduct and Client Care Rules 2012, r6.4, r10.7 / HELD / licensee’s knowledge of monolithic cladding engaged disclosure obligations / licensee required to ensure purchasers were informed of significant potential weathertightness risks and able to seek expert advice / forwarding moisture report without explanation or guidance insufficient / reasonably competent licensee should have highlighted relevant risks, explained implications of direct-fixed cladding and recommended a building inspection / Committee entitled to rely on contemporaneous and circumstantial evidence despite dispute as to conversations between parties / finding of unsatisfactory conduct upheld / compensation referral under s93(1)(ha) improper as provision not in force at time of relevant conduct and could not be applied retrospectively / compensation referral dismissed

Compensation referral / unsatisfactory conduct / Committee found licensee misinformed purchaser as to the age of the roof / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r5.1, r6.4, r9.1, r9.5 / prospective expense of replacing roof closely connected to licensee’s unsatisfactory conduct / innocent breach should not be treated in the same way as conscious untruthfulness or dishonesty / careless not deceitful / compensation reduced by 25 per cent for licensee’s innocent misrepresentation / honest belief roof was newer based on information from vendor / licensee ordered to pay $17,159

Appeal / appellant has a brain injury / alleges licensees pressured her into buying a property with many problems / committee found no breach and decided to take no further action / Tribunal declined preliminary issue to accept late appeal / Real Estate Agents Act 2008, s111 / HELD / purchaser, notwithstanding brain injury, legally allowed to make her own decisions / complaint not supported by corroborative evidence, including from those who assisted her throughout the purchasing process / no disclosure by vendor or red flags to put licensee on notice of any defects / purchaser responsible for own due diligence / purchased property with intention of renovating / licensees exercised skill, diligence and care throughout transaction / committee correctly decided to take no further action against licensees / appeal dismissed / Committee’s decision confirmed

Compensation referral / unsatisfactory conduct / non‑disclosure of prior cancelled sale due to absence of CCC for original dwelling / purchasers bought property unaware of issue and later incurred costs obtaining CCC / Committee found two licensees and agency liable for unsatisfactory conduct for failure to disclose prior cancellation, but no deliberate concealment / purchasers claimed $34,853.18 including council fees, remedial work and stress / Real Estate Agents Act 2008, s93, s110 / Professional Rules 2012 r5.1, r6.2, r6.4 / HELD / compensable loss must flow from nondisclosure rather than other underlying defects / only $210 inspection cost sufficiently connected / other claims not proven or lacked causal link; stress not recoverable absent diagnosable injury recognised as loss in its own right / respondents jointly and severally liable for $210.

Appeal / licensee advertised residential property as having carpark / appellant purchaser alleged licensee failed to exercise skill, care, competence and diligence by not identifying inconsistency between physical markers on property and boundaries shown in cross lease flats plan / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.4 / HELD / licensee must “know what they are selling”, though not expected to be solicitors, surveyors or building inspectors / no credible evidence of “red flags” to indicate carpark fell outside exclusive use area / any defect not reasonably apparent / licensee had previously sold property with no issues identified / no error of fact of law / Committee’s decision upheld / appeal dismissed

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / Real Estate Agents Act 2008, s74, s112 / Kacem v Bashir [2010] NZSC 112 / HELD / neighbour interested in acquiring vendor’s property around same time licensee approached vendor for off-market inquiry / no evidence supporting complaint that licensee conspired with neighbour to lower vendor’s price expectations / no evidence inquiry not genuine / no material error nor is Registrar’s decision plainly wrong / application dismissed / Registrar’s decision confirmed

Compensation referral / unsatisfactory conduct / licensees failed to disclose building reports obtained by vendor identifying weathertightness risk from insufficient window flashings / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r10.7 / compensation considered on legally principled basis / losses must flow from unsatisfactory conduct found by Committee / liable for cost of replacement windows (retrofitting flashings not feasible), waterproofing, restoration of adjacent walls / claim for replacement blinds not casually connected / no contributory negligence by not obtaining formal building report / claim for interest costs for remediation partly successful / 25 per cent reduction for non-intentional breach / 15 per cent reduction as failure was to disclose risk, rather than known leaks / compensation of $26,486 awarded for losses, apportioned 75 per cent to lead agent

Appeal / Committee chose not to pursue complaint as it only disclosed inconsequential matters / complainant purchaser alleged that licensee provided misleading or false information about National Building Specification (NBS) for property / Real Estate Agents Act 2008, s74 / licensee had obtained up-to-date information from council and provided it to appellant / information was explicit that building was not considered earthquake-prone / no evidence to suggest licensee was privy to further undisclosed information / Committee appropriately assessed licensee’s failure to identify that EGM minutes described likelihood NBS rating would drop was a technical failure that did not meet disciplinary threshold / minutes not available to be provided in any event / no error of fact or law / application dismissed / Committee’s decision confirmed

Liability / alleged boundary misrepresentation in commercial sale / Real Estate Agents Act 2008, s72b, s72c, s73b, s73c / Professional Rules 2012, r5.1, r6.4 / HELD / salesperson marketed commercial unit showing approximate boundary and “25 carparks” / encroachment later identified in inspection / part of carpark on council reserve land and larger part on Crown land / licensee found to be aware of potential discrepancy in known versus apparent boundary but did not amend marketing or disclose to purchaser / inquiries would have revealed true boundary / licensee’s conduct deemed to be misleading and amounting to a failure to exercise care and diligence / no wilful or reckless breach / both alternative charges of negligence established to a high degree / conduct short of serious negligence / unsatisfactory conduct found / penalty to follow

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / vendor complainant alleged that licensees misled her as to number of enquiries by purchasers, lowered selling price without authorisation, disclosed price expectations and other personal information to potential purchasers, and provided poor customer service / Real Estate Agents Act 2008, s74 / evidence did not support applicant’s allegations / no evidence of misleading conduct nor poor service or communication / totality of evidence indicated licensees responded appropriately and professionally to complainant’s queries and contentions / no error of fact or law / application dismissed / Registrar’s decision confirmed