Ministry of Justice

Appeal / licensee misled or misrepresented to purchaser commercial property’s rental income, tenant identity and tenure, loan conditions, outgoings and property yield / withheld bank statements for rent / licensee and auctioneer put purchaser under undue pressure at auction / Committee took no further action / Real Estate Agents Act 2008, s72, s892c, s111 / Professional Rules 2012, r5.1, r6.4, r9.2, r9.4 / Vosper v Real Estate Agents Authority [2017] NZHC 453 / Tesar v Real Estate Agents Authority [2014] NZREADT 18 / HELD / breach of r5.1 &  r6.4 / statement of net annual rent implies actual rent paid and was misleading as actual rent paid was lower due to rental rebates / actual rent paid objectively significant to purchasers of commercial property, and purchaser was clear it was important / licensee can be liable for innocently misstating important information / other heads of complaint dismissed / unsatisfactory conduct in relation to rental income found / appeal partially allowed

Appeal / licensee marketed property as providing rental income when renting downstairs area for residential purposes not permitted / failed to disclose downstairs area was unconsented / licensee contacted purchaser after complaint was referred to Committee / Committee found unsatisfactory conduct / Real Estate Agents Act 2008, s4, s72, s111 / Professional Rules 2012, r5.1, r6.2, r6.3, r6.4, r10.7 / HELD / evidence shows marketing referred to income from residential and not commercial use / evidence shows downstairs area was unconsented / due diligence clause not a justification for failure to disclose unconsented downstairs area as licensee was aware of defects / email to purchaser was not real estate agency work, and even if it was, would not warrant disciplinary action / Committee should have had regard to context and content of email / Committee’s decision partially reversed / unsatisfactory conduct finding in relation to email vacated / penalty reduced / appeal partially allowed

Penalty / misconduct / former licensee found guilty under s73b (seriously negligent or seriously incompetent) for marketing lots without agency agreements, misrepresenting lot sizes & failing to ensure purchasers obtained professional advice, disclosing confidential information, and failing to ensure agreements contained material GST particulars before signature / Real Estate Agents Act 2008, s3, s73, s110, s110A / Professional Rules 2012, r5.1, r6.1, r6.4, r9.1, r9.6, r9.9, r9.17 / HELD / higher level of misconduct / lacked fundamental understanding of professional obligations and real estate transactions / no previous disciplinary history / voluntarily suspended license, but did not acknowledge responsibility or show remorse until after lengthy hearing / licensee indicated she had limited funds available / censured / ordered to pay $7,500 financial penalty / 50 per cent costs ($27,271.50)

Liability / licensee charged under s73 and s72 for communications with tenants as selling agent regarding consent for viewings / Evidence Act 2006, s50 / Real Estate Agents Act 2008, s4, s72, s73, s91, s109 / Residential Tenancies Act 1986, s48 / Professional Rules 2012, r5.2, r6.3, r9.1 / admissibility / Tenancy Tribunal and District Court decisions admissible / misconduct charges not proven / does not meet threshold for disgraceful conduct, not proven wilful or reckless breach of r6.3, or seriously incompetent or seriously negligent real estate work / unsatisfactory conduct found / breach of s72a, s72b (for breach of r5.2, r6.3) & s72d / licensee was acting as a real estate agent during conduct / harassed and threatened tenants / demonstrated unsound knowledge of Residential Tenancies Act 1986 / charges partially upheld / penalty decision to follow 

Liability and penalty / misconduct / two licensees charged under s73b and s73c / first licensee marketed property for sale without agency agreement, failed to ensure conjunctional sale agreement was in place, failed to explain he was assisting second licensee, deprived agency of commission, performed real estate work without supervision, misled agency about commission / second licensee worked with first licensee without agreement between agencies / deprived agency of commission / Real Estate Agents Act 2008, s3, s73b, s73c, s93, s110, s110A / Professional Rules 2012, r5.1, r5.2, r6.2, r6.3, r6.4, r9.6 / HELD / both licensees plead guilty / reckless conduct but not dishonest / apologised and expressed remorse / first licensee continually failed to meet professional obligations / donated part of commission to charity / censured / $6,500 fine / second licensee intentionally paid full commission to first licensee / censured / $3,000 fine / 50 per cent costs ($1,552.50), split evenly

Liability / misconduct / licensee charged under s73b for marketing lots without agency agreements, misrepresenting lot sizes & failing to ensure purchasers obtained professional advice, disclosing confidential information, and failing to ensure agreements contained material GST particulars before signature / Real Estate Agents Act 2008, s3, s73, s91 / Professional Rules 2012, r5.1, r6.1, r6.4, r9.1, r9.6, r9.9, r9.17 / HELD / breach of r9.6 / marketed lots by taking prospective purchasers to them, without agency agreement / breach of r5.1 and r6.4 / misrepresented lot sizes & lacked understanding of plans / should have sought clarification or recommended professional advice / purchasers relied on incorrect information / breach of r6.1, r9.1, r9.17 / disclosed vendor’s financial position without authority / breach of r5.1 and r9.9 / failed to ensure GST schedules were completed before agreements signed / breaches were seriously negligent or incompetent / charges upheld

Appeal / complaint licensee concealed identity of bidder from appellant & conspired with the bidder to enable appellant’s husband to purchase property & disclosed the reserve price / Committee took no further action / Real Estate Agents Act 2008, s892c, s111, s134, s136 / Professional Rules 2012, r6.2, r6.4 / HELD / licensee disclosed the name of the purchaser, a purported corporate entity / not required to disclose persons behind an incorporated entity, or that the company did not exist, unless the licensee knew the entity did not exist / disclosure would also be required if the licensee knew the husband intended to be nominated as purchaser, or if the bidder directed the licensee not to disclose their identity / no evidence that further disclosure was required / licensee did not conspire with bidder and husband / no evidence licensee disclosed reserve price to the bidder / bidder had prior knowledge of price expectations / appeal dismissed / Committee’s decision confirmed

Penalty / misconduct / licensee guilty (s73(c)(iii)) for recklessly contravening r6.3 by consensually hugging client, together with a peck on the cheek & their cheeks touching, and accidentally brushing of their lips / Real Estate Agents Act 2008, s3, s93, s110 / Professional Rules 2012, r6.3 / HELD / incident was consensual and not sexual / licensee was found to have overstepped professional boundaries / conduct was serious albeit a momentary lapse only / conduct at low-moderate to moderate level / licensee censured / ordered to pay $4,000 financial penalty / 20 per cent costs ($7,109)

Penalty / misconduct / first licensee guilty (s73b) for sending draft agreement to another licensee without deleting previous signatures and not ensuring new signatures were obtained / second licensee guilty (s73b) for failing to check whether he had consent to insert signatures / Real Estate Agents Act 2008, s3, s91, s110 / Professional Rules 2012, r5.1, r6.1, r6.3 / HELD / first licensee / two prior adverse disciplinary findings relevant / admitted wrongdoing early and co-operated / conduct at moderate to higher level / while not deliberate or dishonest, same outcome / first licensee censured / ordered to pay $10,000 financial penalty / second licensee / no prior disciplinary history / voluntary suspension of licence relevant / denied involvement for significant period before admitting wrongdoing / similar seriousness to first licensee / second licensee censured / ordered to pay $4,000 financial penalty / 50 per cent costs ($2,839), split evenly

Liability / misconduct / licensee charged under s73a (disgraceful conduct) for failing to account for $92,210 of bond money relating to 49 residential tenancies paid to his property management company to be transferred to Tenancy Services / instead, bond money was retained for use by his businesses / Real Estate Agents Act 2008, s73, s91 / Residential Tenancies Act 1986, s19 / HELD / licensee admits charge and apologised at the hearing / conduct is a marked and serious departure from the expected standard of a professional real estate agent and would be regarded by agents of good standing and reasonable members of the public as disgraceful / honesty is essential to achieve the purpose of the Act, particularly public confidence in the industry / charge upheld / penalty decision to follow

Costs applications by appellant and licensee / appellant unsuccessfully appealed Committee’s decision to take no further action / complaint and appeal alleged licensee was dishonest, acted in bad faith, and faked a document / Real Estate Agents Act 2008, s110A, s111 / HELD / no evidential basis for complaint / s110A2 factors not present / appellant did not lack good faith and did not obstruct process, and believed allegations to be true / no reasonable basis for appeal, particularly regarding dishonesty, fake document and bad faith allegations / licensee entitled to reasonable contribution towards costs, but in the absence of bad faith or obstruction, not entitled to indemnity costs / two-thirds of reasonable costs appropriate / costs of $11,560 awarded to licensee / no basis for appellant’s costs application

Appeal / complaint licensee did not disclose specific leak, conspired to have appellant vacate property to hide the leak, falsely alleged the appellant delayed listing and settlement, and overcharged for marketing / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r6.2, r10.7 / HELD / no breach of r10.7 or r6.2 / Committee addressed defects generally, did not specifically address specific leak / nevertheless, property marketed and sold on “as is, where is” basis, and evidence shows licensee disclosed specific leak to potential purchasers / not required to investigate gravity or source of leak / advice that vacant premises would achieve best sale price appropriate, no bad faith motive / no evidence of overcharging, or that licensee blamed appellant for delaying listing or settlement / licensees must be honest to owners about disbursements / appeal dismissed

Liability / misconduct / first licensee charged under s73b or s72b for using previous signed agreement to draft a new agreement, sending that new agreement to another licensee without removing previous signatures, and not ensuring new signatures were obtained / second licensee charged under s73a or s73b for amending new agreement to include initials, instead of having agreement signed / Real Estate Agents Act 2008, s3, s72b, s73a, s73b / Professional Rules 2012, r5.1, r6.1, r6.3 / HELD / neither licensee found to be a credible witness / first licensee breached rr5.1, 6.1 & 6.3, guilty under s73b / failure to delete signatures and initials of parties before forwarding document a serious departure from acceptable standards / second licensee guilty under s73b / failure to check whether he was acting correctly in inserting initials was seriously negligent / penalty decision to follow