Ministry of Justice

Liability / misconduct and incompetent or seriously negligent real estate work charges against licensee, managing director and agency arising from imbalances in VPA account balances / Real Estate Agents Act 2008, s3, s50, s72, s73b, s73c, s s85, s86, s110 / Professional Rules 2012, r5.1, r6.1, r6.3, r8.3, r8.4, r9.13 and r10.6c / HELD / licensee’s practice of ticking “no refund” without confirmation reckless / licensee liable for reckless contravention per s73b / director and agency did not have appropriate checks and balances to control VPA funds / numerous failings seen as systemic failure to reconcile VPA / properly characterised as negligence / director and agency liable per s73b / license failed to adequately particularise marketing and advertising costs / unsatisfactory conduct per s72a / director and agency’s failure to supervise licensee’s handling of VPA inadequate / director and agency liable for misconduct per s73b / penalty decision to follow

Penalty / licensee misled purchaser as to status of builder and existence of transferable guarantee / Real Estate Agents Act 2008, s3, s50, s93, s108, s1104, s1115 / Professional Rules 2012, r6.4 / licensee’s misrepresentation was careless but unintentional / breach of Rules occurred more than 10 years ago / licensee was novice agent at time of misrepresentation and not subject to disciplinary complaints in intervening years / no need for personal deterrence against repetition / disciplinary orders not warranted / no clear claim for compensation from purchaser / reference to significant legal costs allegedly incurred by purchaser not supported by breakdown of costs or documentary evidence / causative link between misrepresentation and loss unproven / no penalty orders imposed / passage of time since unsatisfactory conduct insufficient to displace presumption of publication of licensee’s identity in interests of transparency

Appeal / licensee failed to disclose removal of gate and shower glass wall in sale agreement and during final inspection / Committee found licensee guilty of unsatisfactory conduct and ordered replacement of gate and shower / Real Estate Agents Act 2008, s931f, s111 / Professional Rules 2012, r5.1, r6.2, r6.4 / HELD / licensee incorrectly applied “legalistic lens” to vendors’ query concerning removal of gate / should in fairness have disclosed to purchaser, irrespective of whether chattel or fixture, and despite intention to redevelop property / incorrectly advised vendors shower wall could be removed / no evidence of purchaser’s consent to shower wall removal / breaches of r5.1, r6.2 and r9.1 / properly assessed as low to middle gravity of offending / Committee lacked jurisdiction to order relief as consequences of licensee’s errors were no longer operative following demolition / Committee’s modified / liability decision and training order upheld / relief orders vacated

Appeal / complaint licensee failed to deduct GST from price of chattels included with property resulting in purchaser paying too much / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r5.2 / HELD /  Tribunal disagreed with Committee’s assessment that fundamental level of GST knowledge required expertise beyond what could be expected of licensee / licensee required to have basic understanding of GST or prompt purchaser to obtain professional advice / potential oversight from licensee / however, purchaser received legal advice and continued with transaction notwithstanding GST error which licensee declined to correct / purchaser waited more than four years to make complaint / delay in bringing complaint does not extinguish rights but is adverse factor / purchaser’s decision to continue with transaction notwithstanding error fatal to complaint / Committee’s decision confirmed / appeal dismissed

Liability and penalty / misconduct / licensee pleaded guilty to disgraceful conduct for non-compliance with Audit Regulations over period of nearly two years / failure to appoint auditor, notify Authority of trust account transactions, provide monthly balances, prepare statement or statutory declaration, and maintain adequate records / drew upon monies to pay personal and business expenses / Real Estate Agents Act 2008, s73a, s110, s1102f, s122, s123, s125, / Real Estate Agents (Audit) Regulations 2009, reg5, reg6, reg7, reg8, reg9, reg14, reg15 / HELD / trust account compliance necessary for public protection / deliberate and intentional breaches / personally benefitted from trust monies despite no loss to any client / discrepancies between trust monies required and those held often significant / aggravated by disciplinary history / serious wrongdoing / public interest favoured publication / Tribunal ordered censure, $16,784.17 in costs, and 5 year prohibition from real estate work

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / Real Estate Agents Act 2008, 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 / licensee’s communications to complainant were direct and could be perceived as abrupt and rude, but behaviour not “disgraceful” / communications relating to rent relief viewed in context of longstanding dispute as to alleged rent arrears which licensee and colleagues sought to resolve / no evidence of threatening behaviour / application dismissed / Registrar’s decision confirmed

Penalty / unsatisfactory conduct / licensee breached fiduciary obligation having entered into commission sharing agreement with purchaser which he failed to disclose to vendors / Real Estate Agents Act 2008, s72, s93, s110, s110A / Professional Rules 2012, r6.1, r6.3 / HELD / licensee’s conduct towards the serious end of unsatisfactory conduct, but not the graver wrongdoing of misconduct / wider real estate profession must be deterred from entering into arrangements unknown to client / first disciplinary matter in more than 10 years / licensee has had successful career, acknowledged wrongdoing and expressed remorse / licensee’s health considered / usual award of costs appropriate / licensee’s defence was unsuccessful but acted in good faith throughout proceedings / parallel civil proceedings immaterial to disciplinary costs / Tribunal ordered censure, $3,000 fine and 50 per cent costs ($22,000)

Appeal / licensee facilitated sale following relationship property division agreement / property owner alleged that licensee enabled unauthorised entry of valuer into property, accepted ex-husband’s instructions without agreement, and improperly changed duration of agency agreement / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.1, r6.2, r6.4, r9.1 / HELD / no evidence of wrongdoing by licensee in allowing valuer to enter house / owner was informed prior to visit and did not object / owner did not inform licensee to deal only with her or correct understanding that ex-husband was fully active participant / however, licensee wrong to alter duration of signed agency contract without owner’s consent / breach of r5.1, r6.2 and r9.1 / licensee acted on another beneficial owner’s instructions and immediately took steps to rectify / threshold for disciplinary response not met / Committee’s decision confirmed / appeal dismissed

Appeal / complaint that licensee failed to disclose defective and non-consented work & misrepresented multi-offer situation / complaint licensee misled purchaser as to status of builder and existence of transferable guarantee / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.2, r6.4, r10.7 / HELD / no evidence licensee withheld building report, was aware of defects or unauthorised building works, misled purchaser about multi-offer situation, or improperly responded to purchaser’s legal claims / extent of defects not evidence of licensee’s knowledge / licensee entitled to rely on council certification and engaged building professionals / finding that licensee made significant albeit innocent misrepresentation about builder’s status and building work having transferrable master builder guarantee / finding of unsatisfactory conduct warranted / Committee’s decision modified to reflect adverse findings / decision otherwise confirmed

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 does not dispute he failed to pay annual suspension fee but submits he did not receive reminder communications / Tribunal accepts Registrar followed correct process / licensees are responsible for updating their contact details / Registrar must cancel licence as required by s54h / no error of fact or law / application dismissed, Registrar’s decision confirmed

Appeal / complaint that licensees failed to fully disclose information relating to property’s weathertightness and defects / Committee found unsatisfactory conduct / Real Estate Agents Act 2008, s111, s 133 / Professional Rules 2012, r5.1, r9.3 / HELD / no breach of r9.3 / vendor’s evidence of knowledge of initial inspections incorrect / initial inspections’ recommendation to engage further expert not passed on, but immaterial as expert engaged per licensees’ advice / internal disclosures form updated and not passed on to vendors, but immaterial as vendors knew new information / breaches of r5.1 (and s133), but no disciplinary action warranted / expert not advised of initial findings, but identified same issues / offer presentation not signed in accordance with s133 but remedied quickly and purchaser was a licensee familiar with guide / Tribunal observed licensees in a team can be individually responsible for same failures / Committee’s decision reversed / appeal allowed

Appeal / licensee advertised property as having consented visitor facility and ready to generate income / facility had resource consent but did not have certificate of approval or code compliance certificate / purchasers contended licensee’s lack of due diligence was a serious error which impacted them financially / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.4, r9.2, r10.7 / HELD / agents must take reasonable steps to verify representations of positive statement of fact / however, not reasonably expected to review resource consent line by line to identify need for further certification / here ‘red flag’ existed in form of small notation in advice notes / purchasers must also undertake their own due diligence and are responsible for their agent’s or solicitor’s actions / licensee made innocent misrepresentation but otherwise performed as competent agent / no sanctions warranted / Committee’s decision upheld / appeal dismissed