Ministry of Justice

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

Liability / unsatisfactory conduct / licensee charged under s73(a) and alternative charge of s72(b) for entering into commission sharing agreement with purchaser which he failed to disclose to vendors / Real Estate Agents Act 2008, s73, s72, s109, s110 / Professional Rules 2012, r6.1, r6.3 / HELD / voluntarily and unequivocally entered into agreement to share his commission with purchaser unknown to vendors / sharing agreement amounted to breach of fiduciary obligation of loyalty to client in breach of r6.1 / conflict of interest / no financial implications for client irrelevant / client entitled to know of licensee’s advantage / lowers the standing and reputation of industry in breach of r6.3 / not accepted licensee under duress / however, unable to conclude licensee wilfully contravened Rules due to irreconcilable factual accounts / breach of Rules and unacceptable conduct found, but not disgraceful conduct / unsatisfactory conduct charge upheld / penalty decision to follow

Appeal / complaint licensee did not disclose occupants of neighbouring property had gang connections / property also in rough condition / purchaser contended licensee avoided showing neighbouring property during video call / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.2, r6.4, r10.7 / HELD / property purchased sight unseen / previous open home cancelled due to large gathering nearby neighbouring property with some gang members present / licensee not aware neighbouring property had gang connection or that gang tangi was being hosted there / one-off event / Complaints Assessment Committee 1907 v Tapu [2021] NZREADT 32 distinguished / gang connections and general condition not defects in land for r10.7 / insufficient evidence licensee avoided showing neighbouring property / Committee’s decision confirmed / appeal dismissed

Application for leave to adduce new evidence / Real Estate Agents Act 2008, s105, s111 / appellant sought to produce affirmation and supplementary affidavit / HELD / affirmation supporting appellant’s contention about his knowledge of other auction bidders is admissible / shows Committee may have made wrong inference / while arguable it may have been provided earlier with reasonable diligence, admissible as in the interests of justice / other matters addressed in affidavits not admissible as not new, cogent, or could have been provided with reasonable diligence / balance of application to produce new evidence dismissed / application partially successful

Appeal / real estate agency advertised motel with drone photographs including appellant’s neighbouring property / appellant complained of privacy invasion, unsatisfied with principal agent’s response / Committee took no further action / Real Estates Agents Act 2008, s3, s4 s111 / Professional Rules 2012, r5.1, r5.2 / HELD / no evidence of privacy breach, listing photographs considered innocuous / concerns addressed by removing and blacking out photographs / photographs removed when motel sold / alleged false and misleading information in principal agent’s response to complaint was careless language rather than deliberate misstatement / email inferred necessary consents were obtained, but no consents needed / marketing and photography are real estate agency work / no breach of professional rules or unsatisfactory conduct / appeal dismissed / Committee’s decision confirmed

Appeal / agency released deposits before condition in sale and purchase agreement was satisfied and without express consent of purchaser’s solicitor / Committee took no further action / Real Estate Agents Act 2008, s111 / HELD / agency entitled to release deposits if every condition was fulfilled or waived / two conditions in agreement not satisfied before deposit released / non-fulfilment of conditions waived by purchaser’s solicitor signing forms confirming satisfaction or waiver of conditions / waivers permitted agency to release deposits / purchaser’s solicitor did not give express consent to release deposits, but no evidence he expressly declined consent or told agency not to release them / agency entitled to view signed forms and silence on deposits as authority to release them / appeal dismissed / Committee’s decision confirmed

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