Ministry of Justice

Appeal / appellant alleged licensee failed to disclose water ingress issues, that downstairs living room and bedroom consented for rumpus room only, and that marketing of property was misleading about number of bedrooms and lounges / Committee undertook own initiative inquiry into adequacy of supervision of junior licensees / Committee found licensees guilty of unsatisfactory conduct, though subsequently recalled decision due to factual misunderstanding / Committee determined to take no further action / Real Estate Agents 2008, s892c, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r6, r10.7 / HELD / no “red flags” to put licensees on notice of water ingress, or actual knowledge / any evidence downstairs bedroom not habitable not apparent until after settlement, and no actual knowledge at time of property sale / agency’s policies and procedures relating to supervision of licensees adequate / Committee’s decision confirmed / appeal dismissed  

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

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

Appeal / licensee, neighbour of client vendor, omitted sale price of her property in CMA / licensee had sold own property to developer purchaser / Committee found licensee guilty of unsatisfactory conduct for failing to exercise skill and care, and failing to deal fairly with parties / also found agency guilty of unsatisfactory conduct for breaching supervisory obligations / Real Estate Agents Act 2008, s50, s89, s111 / Professional Conduct and Client Care Rules 2012, r5.1, r5.2, r6.4, r8.4 / HELD / licensee was in breach of obligation to deal fairly with parties in failing to disclose value of sale of her own property / factual finding that licensee did not disclose sale price over casual conversation / value relevant, recent and comparable / no supervisory failings by agency / branch manager not prosecuted / no evidence of systemic failure / no suggestion manager not suitably qualified / Committee’s determinations against licensee confirmed, determinations against agency reversed

Application to review Registrar’s determination / Registrar determined not to pursue complaint as it only disclosed inconsequential matter / parties filed joint memorandum 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

Compensation referral / unsatisfactory conduct / Committee found licensee marketed commercial property with incorrect rental return / goods and services tax (GST) specified as payable in addition to already GST-inclusive rent / Real Estate Agents Act 2008, s93, s110 / Professional Rules 2012, r5.1, r6.4 / rental return (yield) for commercial property a critical factor for purchasers / purchaser relied on representation, would have bid less knowing true yield / GST disclaimer in information memorandum does not displace express representation & does not account for errors beyond that document / settlement with vendor left unrecovered loss / no lack of care by purchaser / rent statements could not have alerted purchaser as it did not specify whether GST inclusive / legal costs negotiating with vendors not caused by agent’s wrongdoing, not awarded / general damages dismissed / licensee ordered to pay $46,875 (total loss of $62,500 reduced by 25 per cent as conduct not deliberate)

Application to review Registrar’s determination not to pursue complaint as it only disclosed inconsequential matters / prospective purchaser applicant alleged licensee was incompetent or deceitful in his communications concerning rent review provisions, building consent and a building warrant of fitness relating to commercial property / applicant alleged Registrar made no proper assessment of complaint / Real Estate Agents Act 2008, s74 / licensee responded appropriately and professionally to applicant’s queries and contentions concerning rent review clauses / circumstances would not justify a disciplinary process given extent of licensee’s responses, whether ultimately substantively correct or incorrect / inquiries with vendor and building specialists in respect of building consent and warrant of fitness issues satisfied professional obligations / no evidence of unprofessional communications / Registrar’s decision confirmed / application dismissed.