The Real Estate Authority (REA) says the Real Estate Agents Disciplinary Tribunal’s recent decision to issue fines and censure two licensed real estate professionals (licensees) for misconduct is a reminder to the sector that all real estate agency work must be conducted with competence and care.
On 15 August 2022, the Tribunal found two licensees guilty of misconduct for inserting the signatures and initials of vendors taken from previous documents onto a new offer and failing to obtain the parties’ actual signatures on the contract. In its decision the Tribunal noted the conduct was “not a deliberate or dishonest act of forgery” but constituted seriously negligent or incompetent real estate agency work under section 73(b) of the Real Estate Agents Act 2008. In the penalty decision made by the Tribunal on 22 November 2022, and published in December 2022, one of the licensees involved was fined $10,000, and the other licensee was fined $4,000 by the Tribunal. Both licensees were censured and required to pay court costs.
REA Chief Executive Belinda Moffat says the case reinforces the importance of licensees upholding high standards of professional competence and conduct across all real estate agency work.
“The Code of Conduct says a licensee must exercise skill, care, competence, and diligence at all times when carrying out real estate agency work. Proper procedure around signatures and initials on documents throughout the transaction process, including during offer negotiations, is fundamental to that care and competence. As the Tribunal said, all licensees have an obligation to ensure that sale and purchase agreements are handled appropriately, and that real estate agency work is completed competently.
“It is crucial that licensees follow the rules within the Code of Conduct to protect consumers from harm and to promote confidence in the sector. Consumers should always feel that they are in safe hands when participating in a real estate transaction.
“We trust that this decision will serve both as a reminder to real estate licensees and a reassurance to consumers that the fundamental standards of conduct must be maintained and that the regulatory system enables licensees who fall short to be held to account,” Ms Moffat says.
Facts of the Case
The Tribunal decision relates to the handling of a sale and purchase agreement by two licensees. A sale and purchase agreement was signed by the purchasers and the vendors of a property, however this was cancelled when one of the conditions was not met. The agreement was subsequently amended by the licensees so that the purchasers could make another offer, but new signatures and initials from all parties involved were not obtained by the licensees. Instead, the signatures from the initial agreement remained, and one of the licensees electronically inserted the new date and the initials of the purchasers and the vendors. The purchasers were not successful in buying the property, therefore the sale did not go through.
The vendors requested a copy of the agreement as they had not received one from the licensees. Upon viewing it they found their initials and signatures were added to the amended agreement without their consent.
The vendors made a complaint to one of the agencies, who then made a report to REA about the conduct of the licensees concerned. An independent Complaints Assessment Committee (Committee) was appointed and inquired into the allegations, resulting in an investigation of the case. The Committee filed charges in the Tribunal under the Real Estate Agents Act 2008, alleging misconduct.
The Tribunal found that one licensee made an error of judgment in failing to remove previous signatures and initials before sending the offer document for a property on to the other licensee. This was deemed as a serious departure from acceptable standards and amounted to misconduct as seriously negligent or incompetent real estate agency work.
The Tribunal found the second licensee’s failure to take steps to check with any party whether he was acting correctly in inserting the initials also amounted to misconduct as seriously negligent real estate agency work.
Below is the link to the Tribunal’s decision and rulings in relation to this case.
For more information, contact the REA Media team on 027 237 7196 or via firstname.lastname@example.org
The Real Estate Authority (REA) is the independent government agency that regulates the conduct of licensed real estate professionals in New Zealand.
We license people and companies working in real estate, provide oversight of the code of conduct, oversee the complaints and disciplinary process for poor conduct by licensees, provide education and guidance to licensees to assist them to meet their regulatory obligations, and provide information to consumers about the real estate transaction process.
REA is governed by a Board. The Chair is Denese Bates KC. Belinda Moffat is the Chief Executive/Registrar.
People who have concerns about the conduct of a real estate professional can contact REA – visit rea.govt.nz(external link) or call 0800 367 732.
Consumers seeking independent information about buying and selling property can visit REA’s consumer website settled.govt.nz(external link).