Estate agent 'remiss' in failing to disclose conflict of interest

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A real estate who failed to disclose his involvement as both an agent and vendor in a property deal has been found guilty of unsatisfactory conduct by a disciplinary committee.

The Real Estate Agents Authority said Richard Lancaster's behaviour fell short of a standard that a member of public was entitled to expect from someone in his position.

The Auckland agent was fined $2000 and ordered to apologise to the complainant, in a decision released this week.

Lancaster, of Elysium Realty Ltd in Te Atatu Peninsula, was "remiss" in not telling the buyer that he was a director of the company that owned the property, and said there was evidence to suggest he had benefited from the sale, the authority's commitee said.

"Mr Lancaster admitted that he was under pressure from his mortgagee to sell the property and a sale would therefore have benefited Mr Lancaster's company by alleviating that financial pressure."

Lancaster earlier told the committee there was no malice intended and he was hopeful that any punishment would be fair.

The buyer, known as 'Ms G' purchased the property after being shown through it by Lancaster in February of last year. Another agent was tasked to collect the deposit for the property.

"According to Mr Lancaster 'Mr O' was now the listing agent as the listing with Harvey's had expired and the property was listed with 'XYZ' (another company) at the time Ms G made the offer," the committee said.

Lancaster said he understood why the complainant viewed him as the agent of the property, but said he did not receive any commission from the sale and only remained the main point of contact as a courtesy to the purchaser.

"The moment I became aware that Ms G claimed not to know about my relationship to the property, I offered to consider how I could help get her out of the contract if that is what she really wanted," he said.

The complainant said Lancaster had deliberately and knowingly failed to disclose a conflict of interest as an agent and vendor of the property.

"Ms G further alleges that Mr Lancaster did not act in good faith and deliberately misled her into believing the property was in better condition than it actually was," the committee said.

The complainant said Lancaster told her that only a "cosmetic do-up" was required on the property, but later obtained a building report which revealed that it would take more than $20,000 to get the house into a decent condition.

As owner he should have had an in-depth knowledge of the property's condition, the complainant said.

"The committee believes that it received a plausible answer from Mr Lancaster, but as Mr Lancaster admitted that he knew that Ms G viewed him to be the real estate agent in the transaction, Mr Lancaster was remiss in not advising Ms G that he was the vendor," the authority said.

"A real estate agent in that position should perhaps ask the question -how would the situation appear to the purchaser."

- NZ HERALD ONLINE