Ministry of Justice

Appeal / complaint licensee and agency mismanaged conflict of interest and agency failed to appropriately supervise licensee / licensee’s family member purchased property / Committee found licensee and agency guilty of unsatisfactory conduct for failure to follow s134 / fined agency $9,000 and published its name / vendor appealed against penalty / Real Estates Agents Act 2008, s3, s4, s72, s73, s93, s111, s134, s136 / Professional Rules 2012, r6.4 / HELD / Tribunal clarified Committee’s liability findings / found Committee erred in failing to consider refund under s134 / complainants in disciplinary proceedings need not commence civil proceedings to recover under s134 / nexus required between subject of upheld complaint and refund / s134 does not require licensee to act under agency agreement nor any loss to vendor / refund punitive, not compensatory / licensee and agency ordered to refund commission shares / Committee’s decision modified / appeal partially upheld   

Liability and penalty / real estate agency pleaded guilty to amended charge of unsatisfactory conduct for non-compliance with Audit Regulations over one year period / failure to appoint auditor, notify Authority of trust account transactions, provide monthly balances, and prepare statement or statutory declaration / Real Estate Agents Act 2008, s72, s110 / Real Estate Agents (Audit) Regulations 2009, reg9, reg15, reg16 / HELD / Tribunal emphasised importance of trust account compliance for public protection / amount of monies transferred in and out of trust account were at times significant / accepted that breaches occurred inadvertently due to miscommunication and change in auditors / agency admitted liability and cooperated with Authority / no prior disciplinary history / company implemented changes to ensure future compliance / low to mid-level penalty appropriate / Tribunal ordered censure, required company officer to undergo training and imposed $5,000 fine

Application to review Registrar’s determination / Registrar cancelled licence as licensee failed to complete required continuing education / Real Estate Agents Act 2008, s54d, s55, s112 / Real Estate Agents (Continuing Professional Development Rules) Notice 2018 / HELD / did not complete CPD by deadline / Registrar correctly followed statutory process / Registrar must cancel licence as required by s54d / Registrar has no discretion to consider health or financial circumstances / no application for deferral or exemption made / licensees are responsible for ensuring they receive correspondence from Registrar / no error of fact or law / application dismissed / Registrar’s decision confirmed

Appeal / licensee advertised property as having “home automation” /  purchasers alleged that licensee had misrepresented that property featured a Control4 automation system / Committee took no further action / Real Estate Agents 2008, s111 / Professional Rules 2012, r6.4 / HELD / licensee provided base package material specifications which did not reference Control4 / purchasers made no queries about whether Control4 included and had obtained legal advice on sale and purchase agreement / purchaser had purchased base package with central hub wiring for smart home system / not proven that the licensee failed to accurately represent what was included in property’s home automation system / vendor’s evidence corroborated licensee’s evidence / appeal dismissed / Committee’s decision to take no further action confirmed

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

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 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