Ministry of Justice

Liability and penalty / misconduct / agency charged under s73b for errors in trust account transactions, non-compliance with audit regulations and failing to provide timely reconciliations over three financial years / Real Estate Agents Act 2008, s3, s73b, s110, s122 / Audit Regulations 2009, reg7, reg14, reg15, reg16, reg17 / Complaints Assessment Committee 520 v AJS Rental Realty Ltd [2020] NZREADT 20 / HELD / agency admitted charge / compliance with audit regulations is mandatory and breaches are taken seriously / length, extent and seriousness of agency’s non-compliance puts conduct at higher end of misconduct under s73b / period of time over which agency’s offending took place was concerning, particularly given compliance advice received by the Authority in late 2020 / credit given for admitting liability, cooperation with Authority and difficulties arising from COVID-19 pandemic / agency censured / ordered to pay $15,000 financial penalty

Appeal / licensee failed to inform purchasers that property’s cladding had risk of weathertightness issues and obtaining finance would be difficult / whether licensee ought to have put clause in purchase agreement as to how cladding could affect finance / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r6.4, r10.7 / HELD / licensee not required to give financing advice / licensee only obliged to refrain from withholding information that in fairness should be provided and to disclose known defects / licensee verbally informed co-purchaser at a viewing of the cladding and advised him to obtain building report / purchaser initialled acknowledgement in disclosure form prior to auction that property had cladding which risked weathertightness issues and expert advice should be obtained / purchaser incorrectly assumed acknowledgement was irrelevant / purchasers failed to undertake due diligence / appeal dismissed / Committee’s decision confirmed

Application to review Registrar’s determination / Registrar determined not to pursue complaint as it only disclosed inconsequential matter / parties filed joint memorandum noting complainant intended to file fresh complaint addressing additional issues and inviting Tribunal to reverse Registrar’s decision by consent, so Registrar may refer matter to Committee / Real Estate Agents Act 2008, s743a / HELD / application granted, Registrar’s decision reversed

Penalty / misconduct / licensee found guilty under s73ciii (wilful breach of Rules) for acting in transaction without direct contact with client, and personally inserting client’s signature and initial on documents without authorisation / Real Estate Agents Act 2008, s3, s73, s110, s110A / Professional Rules 2012, r5.1, r6.3, r9.6, r9.7, r12.2, r12.3 / HELD / licensee sought to cover up wrongdoing when confronted by employer / did not engage with Tribunal until after liability decision issued / explanations not accepted / offending a serious example of misconduct / obligation to deal directly with client or someone with power of attorney is fundamental / conduct wilful and spanned entire transaction / no confidence licensee learned from wrongdoing or can be rehabilitated / credited for clean record, late apology, admitting facts at early stage and no party suffering financial loss / financial hardship not established / censured / licence cancelled / 50 per cent costs ($8,520)

Liability / misconduct / licensee charged under s73ciii for acting in transaction without having any direct contact with client, and inserting client’s signature and initials on contractual documents without authority / Real Estate Agents Act 2008, s73, s126 / Professional Rules 2012, r5.1, r6.3, r9.6, r9.7, r12.2, r 12.3 / HELD / licensee did not attend hearing & admissions made prove charges / instructions were given by vendor’s daughter or assistant without proper authority from owner / breach of r9.6 as agency agreement invalid / breach of r9.7, r12.2 & r12.3 / licensee inserted signatures and had no contact with client / breach of r5.1 / obligation to communicate directly with client is fundamental to real estate work / breach of r6.3 / licensee’s conduct was wilful / attempted to conceal wrongdoing and lied to supervisor / charge upheld / penalty decision to follow

Appeal / licensee advertised property as legal home and income when minor dwelling was not legally consented as dwelling / Committee found unsatisfactory conduct / licensee appealed against publication order / sought to admit fresh evidence / Real Estate Agents Act 2008, s64aiv, s661fv, s84, s108, s111 / HELD / admitting fresh evidence concerning licensee’s health is in interests of justice / starting point on publication is open justice / gravity of wrongdoing is relevant / licensee was found guilty of unsatisfactory conduct, which is less serious than misconduct, and did not involve dishonesty / public does not need protecting from licensee / publication would likely seriously jeopardise her wellbeing / privacy of licensee trumps public interest in knowing wrongdoing of licensees / licensee and agency granted name suppression / appeal allowed

Penalty / unsatisfactory conduct / licensee found guilty under s72a (conduct falling short of expected standard) and s72b (conduct contravening Act or Rules) for misrepresenting to purchaser commercial property’s rental income / Real Estate Agents Act 2008, s931ha, s1102g, s1104, 110A / Professional Rules 2012, r5.1, r6.4 / HELD / first appearance before Tribunal / misrepresentation innocent but had no strong foundation / conduct low-medium in seriousness / not minor or technical breach as it concerned important matter for purchaser / licensee cooperated but no apology / Committee should have referred compensation / Tribunal can self-refer compensation if unsatisfactory conduct found on appeal / is consistent with consumer protection focus of Act / no compensation or relief awarded as no causal connection between purchaser’s expenses and losses and licensee’s misrepresentation / self-represented purchaser not entitled to costs / censured / ordered to pay $1,500 financial penalty

Application to review Registrar’s determination / Registrar cancelled licence as licensee failed to pay annual fee for keeping licence suspended / Real Estate Agents Act 2008, s54h, s55, s112 / HELD / licensee did not file submissions / not disputed that licensee was required to pay suspension fee by certain date, received required communications from Registrar, and did not make payment by deadline / Registrar correctly followed statutory process / Registrar must cancel licence as required by s54h / no error of fact or law / application dismissed, Registrar’s decision confirmed

Appeal / agency contract showed commission estimate included GST / agency charged additional GST on commission in invoice / Committee found unsatisfactory conduct in relation to agency and took no further action in relation to two licensees / Real Estate Agents Act 2008, s111, s126 / Professional Rules 2012, r5.1 / HELD / Committee correct to inquire into agency’s conduct / handwritten note on agency contract saying commission “Inc of GST” made by licensees / licensees knew and intended commission to be GST inclusive / Committee did not treat agency and licensees contradictorily / basis for agency’s unsatisfactory conduct was that the agency itself invoiced the GST to the vendors / agency lacked skill and care in issuing invoice when it knew licensees told vendors GST was already included / Committee’s order to refund GST not inequitable / contractual position between vendors and agency irrelevant in this case / appeal dismissed / Committee’s decision confirmed

Liability / misconduct / licensee charged under s73a with misconduct for producing false valuation report four times in respect of property he was seeking to acquire an interest in / licensee did not attend hearing / Real Estate Agents Act 2008, s73, s109A, s110 / HELD / licensee sought to pass off valuation report as legitimate and from reputable valuation company / licensee admitted facts underlying charge / Tribunal rejected explanation that it was impossible for valuations to occur during COVID-19 restrictions / forgery of valuation report is dishonest even though licensee would receive no financial benefit and vendors would suffer no loss had he been successful / honesty essential to achieving purpose of Act and maintaining public confidence in profession / conduct a marked and serious departure from required standard of conduct / conduct would be regarded by agents of good standing and reasonable members of the public as disgraceful / charges upheld / penalty decision to follow

Penalty / unsatisfactory conduct / licensee found guilty under s72a (conduct falling short of expected standard), s72b (conduct contravening Act or Rules) and s72d (unacceptable conduct) for harassing tenants in emails concerning property viewings, threatening to sue tenants & knowledge of Residential Tenancies Act 1986 falling short of obligations as a real estate agent selling a tenanted property / Real Estate Agents Act 2008, s3, s72, s73, s110, s110A / Professional Rules 2012, r5.2, r6.3, r9.1 / HELD / conduct at moderate level of seriousness / threats not as serious as threats made in Subritzky and Li Wang (Re Complaint No C26114) / conduct in harassing tenants in manner that she did and in threatening to sue tenants was inappropriate / failed to accept responsibility for conduct / costs reduced as most serious charges not upheld and agreed statement of facts filed / censured / ordered to pay $3,000 financial penalty / ordered to undergo training / 20 per cent costs ($3,148.56)

Application to review Registrar’s determination / Registrar cancelled licence as licensee failed to pay annual fee for keeping licence suspended / Real Estate Agents Act 2008, s54h, s55, s112 / HELD / licensee did not file submissions / not disputed that licensee was required to pay suspension fee by certain date, received required communications from Registrar, and did not make payment by deadline / Registrar correctly followed statutory process / Registrar must cancel licence as required by s54h / no error of fact or law / application dismissed, Registrar’s decision confirmed

Appeal / auctioneer misinterpreted indication of maximum price as bid and put purchaser under undue pressure at auction / licensee misrepresented property’s location and number of bedrooms / Committee found unsatisfactory conduct for misrepresenting number of bedrooms and took no further action on other heads of complaint / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r6.4, r9.2 / HELD / purchaser’s narrative of auction events improbable / common practice for auctioneer to privately negotiate with bidders when auction stalled / threshold for undue pressure is high / purchaser more likely than not understood he placed bid / online advertising text itself misleading as to location of property, but advertising material in totality not misleading / purchaser’s email was a submission / submissions process followed by Committee was proper / Tribunal agreed with penalty imposed by Committee for same reasons as Committee / appeal dismissed / Committee’s decision confirmed