Ministry of Justice

Liability and penalty / misconduct / agency operated trust account for more than six years without appointing an auditor and failed to comply with trust account audit requirements despite repeated reminders from REA / Real Estate Agents Act 2008, s73c, s110, s125 / Real Estate Agents Audit Regulations 2009, reg9, reg12, reg15, reg16 / HELD / agency admitted misconduct arising from reckless contraventions of the Act and Audit Regulations / trust account received funds in 275 transactions between 2017 and 2023 while no auditor was appointed / failures included not appointing an auditor, not notifying REA of auditor appointment, not providing monthly reconciliations and statements, and not obtaining required audits / compliance with trust account regime fundamental to consumer protection and public confidence in the profession / prolonged offending over six years more serious than comparable cases / mitigating factors included early admission of liability and cooperation with Authority / agency censured / company officer ordered to complete trust account training / agency fined $18,000

Compensation referral / unsatisfactory conduct / Committee found licensee misinformed purchaser as to the age of the roof / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r5.1, r6.4, r9.1, r9.5 / prospective expense of replacing roof closely connected to licensee’s unsatisfactory conduct / innocent breach should not be treated in the same way as conscious untruthfulness or dishonesty / careless not deceitful / compensation reduced by 25 per cent for licensee’s innocent misrepresentation / honest belief roof was newer based on information from vendor / licensee ordered to pay $17,159

Appeal / appellant has a brain injury / alleges licensees pressured her into buying a property with many problems / committee found no breach and decided to take no further action / Tribunal declined preliminary issue to accept late appeal / Real Estate Agents Act 2008, s111 / HELD / purchaser, notwithstanding brain injury, legally allowed to make her own decisions / complaint not supported by corroborative evidence, including from those who assisted her throughout the purchasing process / no disclosure by vendor or red flags to put licensee on notice of any defects / purchaser responsible for own due diligence / purchased property with intention of renovating / licensees exercised skill, diligence and care throughout transaction / committee correctly decided to take no further action against licensees / appeal dismissed / Committee’s decision confirmed

Compensation referral / unsatisfactory conduct / non‑disclosure of prior cancelled sale due to absence of CCC for original dwelling / purchasers bought property unaware of issue and later incurred costs obtaining CCC / Committee found two licensees and agency liable for unsatisfactory conduct for failure to disclose prior cancellation, but no deliberate concealment / purchasers claimed $34,853.18 including council fees, remedial work and stress / Real Estate Agents Act 2008, s93, s110 / Professional Rules 2012 r5.1, r6.2, r6.4 / HELD / compensable loss must flow from nondisclosure rather than other underlying defects / only $210 inspection cost sufficiently connected / other claims not proven or lacked causal link; stress not recoverable absent diagnosable injury recognised as loss in its own right / respondents jointly and severally liable for $210.

Appeal / licensee advertised residential property as having carpark / appellant purchaser alleged licensee failed to exercise skill, care, competence and diligence by not identifying inconsistency between physical markers on property and boundaries shown in cross lease flats plan / Committee took no further action / Real Estate Agents Act 2008, s111 / Professional Rules 2012, r5.1, r6.4 / HELD / licensee must “know what they are selling”, though not expected to be solicitors, surveyors or building inspectors / no credible evidence of “red flags” to indicate carpark fell outside exclusive use area / any defect not reasonably apparent / licensee had previously sold property with no issues identified / no error of fact of law / Committee’s decision upheld / appeal dismissed

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / Real Estate Agents Act 2008, s74, s112 / Kacem v Bashir [2010] NZSC 112 / HELD / neighbour interested in acquiring vendor’s property around same time licensee approached vendor for off-market inquiry / no evidence supporting complaint that licensee conspired with neighbour to lower vendor’s price expectations / no evidence inquiry not genuine / no material error nor is Registrar’s decision plainly wrong / application dismissed / Registrar’s decision confirmed

Compensation referral / unsatisfactory conduct / licensees failed to disclose building reports obtained by vendor identifying weathertightness risk from insufficient window flashings / Real Estate Agents Act 2008, s50, s93, s110 / Professional Rules 2012, r10.7 / compensation considered on legally principled basis / losses must flow from unsatisfactory conduct found by Committee / liable for cost of replacement windows (retrofitting flashings not feasible), waterproofing, restoration of adjacent walls / claim for replacement blinds not casually connected / no contributory negligence by not obtaining formal building report / claim for interest costs for remediation partly successful / 25 per cent reduction for non-intentional breach / 15 per cent reduction as failure was to disclose risk, rather than known leaks / compensation of $26,486 awarded for losses, apportioned 75 per cent to lead agent

Appeal / Committee chose not to pursue complaint as it only disclosed inconsequential matters / complainant purchaser alleged that licensee provided misleading or false information about National Building Specification (NBS) for property / Real Estate Agents Act 2008, s74 / licensee had obtained up-to-date information from council and provided it to appellant / information was explicit that building was not considered earthquake-prone / no evidence to suggest licensee was privy to further undisclosed information / Committee appropriately assessed licensee’s failure to identify that EGM minutes described likelihood NBS rating would drop was a technical failure that did not meet disciplinary threshold / minutes not available to be provided in any event / no error of fact or law / application dismissed / Committee’s decision confirmed

Liability / alleged boundary misrepresentation in commercial sale / Real Estate Agents Act 2008, s72b, s72c, s73b, s73c / Professional Rules 2012, r5.1, r6.4 / HELD / salesperson marketed commercial unit showing approximate boundary and “25 carparks” / encroachment later identified in inspection / part of carpark on council reserve land and larger part on Crown land / licensee found to be aware of potential discrepancy in known versus apparent boundary but did not amend marketing or disclose to purchaser / inquiries would have revealed true boundary / licensee’s conduct deemed to be misleading and amounting to a failure to exercise care and diligence / no wilful or reckless breach / both alternative charges of negligence established to a high degree / conduct short of serious negligence / unsatisfactory conduct found / penalty to follow

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / vendor complainant alleged that licensees misled her as to number of enquiries by purchasers, lowered selling price without authorisation, disclosed price expectations and other personal information to potential purchasers, and provided poor customer service / Real Estate Agents Act 2008, s74 / evidence did not support applicant’s allegations / no evidence of misleading conduct nor poor service or communication / totality of evidence indicated licensees responded appropriately and professionally to complainant’s queries and contentions / no error of fact or law / application dismissed / Registrar’s decision confirmed

Liability / misconduct / licensee charged with misconduct under s 73b for failing to explain risk of weathertightness issues associated with property’s cladding to purchasers / licensee accepted alternative charge of unsatisfactory conduct but submitted conduct did not warrant finding of misconduct / Real Estate Agents Act 2008, s3, s72, s73 / Professional Rules 2012, r5.1, r6.4, r10.7 / HELD / licensee obliged to disclose known defects or potential risk of defects / whether licensee should have recognised a potential risk will depend on specific circumstances surrounding transaction / licensee knew complaints wanted to purchase warm and dry property due to elderly purchaser’s health issues / complainants communicated they did not want to maintain property / licensee recommended building inspection clause but did not explain basis for suggestion / finding of misconduct for seriously incompetent or seriously negligent real / penalty decision to follow

Application to review Registrar’s determination not to pursue complaint / Registrar considered complaint disclosed only an inconsequential matter and need not be pursued / Registrar found it outlined same factual circumstances and issues raised in first complaint alleging licensees had improper authority to sell properties / Real Estate Agents Act 2008, s74, s112 / HELD / no evidence to suggest that licensees were in breach of their obligations under the Act and Rules / Tribunal agreed applicant seeks to relitigate complaint / relitigation of the same issues would be “fundamentally inconsistent” with statutory framework and purpose / Registrar’s decision confirmed / application for review dismissed

Compensation referral / unsatisfactory conduct / licensee found liable for unsatisfactory conduct by incorrectly assuring purchasers electrical switchboard was compliant / Real Estate Agents Act 2008, s72a, s93, s110 / Professional Rules 2012, r5.1, r6.4 / Fair Trading Act 1986, s43 / HELD / broad and pragmatic approach taken to determine causal connection between losses claimed and contravening conduct / licensee agreed to pay for electrical work / purchasers’ claim for emotional damages dismissed due to lack of supporting evidence / licensee ordered to pay $3,678.72 for electrical work