Ministry of Justice

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

Appeal / purchaser of residential property later discovered third bedroom consented as sunroom and not third bedroom as advertised / misleading marketing / Committee found licensee ought to have been on notice upon viewing property that further enquiry required / Real Estate Agents 2008, s111 / Professional Conduct and Client Care Rules 2012, rr 5.1, 6.2, 6.4 / HELD / licensee still bound by misleading information even if they did not expressly repeat or pass it on / however, no red flag to prompt a reasonably competent licensee to question status of the third bedroom / first LIM unlike 2024 LIM obtained later did not have a plan showing two bedrooms and a sunroom / valuer had accepted third bedroom without question / enquiry into status of third room prompted not by later agent’s inspection but 2024 LIM / no unsatisfactory conduct / Committee’s decision reversed / appeal allowed.

Compensation referral / unsatisfactory conduct / licensees found liable for unsatisfactory conduct in failing to disclose risk of asbestos and the inability to use the driveway to access rear of property (without neighbours’ permission), misleading advertisement and failure to provide supervision / Real Estate Agents Act 2008, s50, s110/ Professional Rules 2012, r5, r6, r10 / Fair Trading Act 1986, s43 / HELD / principles developed for award of loss or damage under FTA relevant to discretion to award compensation / broad and pragmatic approach taken to determine causal connection between losses claimed and contravening conduct / purchase of caravan, and health, personal circumstances and loss of enjoyment of property not closely connected to licensees’ unsatisfactory conduct / no evidence as to loss of value of the property / price paid for driveway over which purchasers have no legal right unclear / claim for compensation dismissed

Appeal / appellant alleged licensee failed to disclose water ingress issues, that downstairs living room and bedroom consented for rumpus room only, and that marketing of property was misleading about number of bedrooms and lounges / Committee undertook own initiative inquiry into adequacy of supervision of junior licensees / Committee found licensees guilty of unsatisfactory conduct, though subsequently recalled decision due to factual misunderstanding / Committee determined to take no further action / Real Estate Agents 2008, s892c, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r6, r10.7 / HELD / no “red flags” to put licensees on notice of water ingress, or actual knowledge / any evidence downstairs bedroom not habitable not apparent until after settlement, and no actual knowledge at time of property sale / agency’s policies and procedures relating to supervision of licensees adequate / Committee’s decision confirmed / appeal dismissed  

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / Real Estate Agents Act 2008, s50, s51, s72, s73, s74, s112 / HELD / licensee’s property management was not real estate agency work and therefore could not be assessed as unsatisfactory conduct, only misconduct / misconduct requires conduct reasonably regarded by agents of good standing or reasonable members of the public as disgraceful / no credible evidence indicative of misconduct / licensee’s employment with the agency was separate from her property management work / no error of fact or law / application dismissed / Registrar’s decision confirmed

Application to accept late appeal / Real Estate Agents Act 2008, s111 / HELD / appeal filed 33 days late / long delay / delayed filing due to desire to progress proceedings in Disputes Tribunal / no exceptional circumstances prevented the appeal from being made in time / appeal not accepted

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 / licensee unaware of unconsented work / not liable for statement about property unless knowingly, recklessly or carelessly makes misstatement / not reckless or careless in advertising property as having rooms it physically had / no reason to question vendor’s representation there was no unconsented work / unconsented work not substandard and consistent with the era / no evidence of red flag or indicator alerting licensee of need for further enquiry / not required to inspect council records in these circumstances / no material error nor is Registrar’s decision plainly wrong / application dismissed / Registrar’s decision confirmed

Application for leave to adduce new evidence / Real Estate Agents Act 2008 s105, s111 / application opposed by agent / vendor sought to produce email and Sale and Purchase Agreement for more favourable offer / supports assertion agent’s error had material impact / HELD / evidence cogent and credible, but could have been provided to Committee with reasonable diligence / leeway afforded to elderly vendor, not legally represented / vendor raised other offer during complaint to Authority, who did not request evidence of offer / no express consideration of other offer by Committee / in interests of justice to admit evidence / application successful

Compensation referral / unsatisfactory conduct / Committee found licensee failed to disclose house had a risk of both methamphetamine contamination and a weathertightness issue / purchaser subsequently discovered it suffered from both, leading to remediation costs / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r10.7 / compensation to be considered on legally principled basis / losses must flow from unsatisfactory conduct and substantive matters found by Committee / purchaser entitled to remediate methamphetamine contamination to below the acceptable levels stipulated in NZ Standard / claimed weathertightness losses not casually established, involved high level of contributory negligence / claimed legal costs not sufficiently connected / $24,707.75 in losses attributable to licensee’s unsatisfactory conduct reduced to $14,825, accounting for licensee’s innocent representation, purchaser’s contributory negligence, and nature of risk rather than known defect

Compensation referral / unsatisfactory conduct / Committee found licensee failed to disclose house had plaster cladding, and her overall disclosure concerning leaks in property had unjustifiably downplayed and misrepresented their potential seriousness / Committee further found licensee’s supervisor failed to adequately supervise and manage licensee / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r5.1, r6.1, r6.4, r10.7 / purchasers’ loss of rent (over 57 weeks), invasive property inspection fee, and costs for temporary repairs were casually and closely connected to licensees’ conduct / losses exceeded Tribunal’s jurisdiction of up to $100,000 / compensation reduced by 25 per cent for licensee’s innocent misrepresentation, by 15 per cent for purchasers’ contributory negligence, and by 25 per cent to reflect non-disclosure of risk rather than known defect /  licensees ordered to pay $35,000 / licensees’ liability joint and several, split equally between themselves

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matter / purchaser of vacant residential section later discovered fence encroaching onto property / alleged licensees should have warned him to obtain a boundary survey / Real Estate Agents Act 2008, s74, s112 / Professional Conduct and Client Care Rules 2012, r5.1, r6.4, r10.7 / HELD / licensees do not have duty to identify and point out property boundaries, except where there is apparent cause for concern / licensee must be proactive when asked or the licensee might reasonably be expected to do so / no ‘red flag’ in these circumstances / presence of fence and storm tank did not suggest encroachment / Registrar correct in determining there was insufficient evidence the licensees knew or should have known of potential boundary issue / application dismissed / Registrar’s decision confirmed

Appeal / property sold ‘as is where is’, buyers advised to seek advice from builder on piles / licensee failed to disclose report as to extent of problem with piles and condition of subsoil / Committee found licensee engaged in mid-to-high level unsatisfactory conduct for withholding information that should have in fairness been provided and for failing to exercise skill, care, competence and diligence / ordered censure, $6,500 fine and compensation referral / licensee appealed against assessment of conduct and fine / Real Estate Agents 2008, s89, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r6.4 / HELD / licensee failed to disclose geotechnical report containing very material and specific information and recommendation / Committee’s assessment of gravity of conduct overlooked ‘as is where is’ nature of sale, with specific recommendation to have piles examined by builder / unsatisfactory conduct properly assessed as moderate, not mid-to-high / fine reduced to $5,000