Ministry of Justice

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

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