Real estate agents fined $18,000 for not telling buyers about unconsented work: Deal ditched

An agent landed in trouble for issues including a toilet being added to a renovated bathroom without building consent or a permit. Photo / File

Three real estate agents were fined $18,000 for not telling buyers about unconsented building work, resulting in the buyers being unable to get insurance, finance or settle and suffering a $10,000 loss.

A Real Estate Authority complaints assessment committee found Barfoot & Thompson agents Dewei (Selina) Liu and Andre and Geraldine Zareian guilty of unsatisfactory conduct.

Liu failed to disclose information to the buyers about the house vendor converting part of the garage to make a rumpus room or fourth bedroom without consent.

Nor did she discuss a toilet being added to a renovated bathroom without building consent or a permit.

The committee found against the Zareians over advertising and not ensuring unconsented work was disclosed in the sale and purchase agreement or documents at an auction.

The buyers had to pay significant legal expenses to cancel the contract to buy the place, according to the committee’s decision.

The increased legal fees were associated with the agents’ failure to disclose the unconsented work which resulted in the buyers being unable to get insurance and therefore finance, the committee said.

Liu was fined $8000 and Andre and Geraldine Zareian were each fined $5000.

All three pleaded guilty to unsatisfactory conduct.

The decision was published without the names or identifying details of the buyers or the address of the property but the committee said all three agents’ names and who they worked for should be disclosed.

The complainants bought the property at auction in 2021. Before that settled, they were talking with a friend about their house purchase.

The friend pointed out concerns about the cladding and the lack of a bath in the bathroom.

“They were also advised by an agent from Barfoot & Thompson, who wants to remain anonymous, that there was a notification on the Barfoot & Thompson’s internal system about the property having unconsented work,” the committee said.

The complainants could not get insurance or finance to complete the purchase because of the unconsented work. After engaging with legal advice, they cancelled the contract and received a refund of the deposit paid.

It took a lot of time and effort through their lawyer to cancel the contract and it cost them $10,076.44 in legal fees and a lot of distress.

“They are asking for the legal fees to be paid and for them to be compensated for the stress that this issue has caused them,” the decision said.

Liu’s evidence to the committee was that she had indeed advised the complainants that the toilet and garage work done by the vendor was not consented.

But she did not provide that information to them in writing and therefore the committee was reliant on her recollections.

The committee accepted that the vendor did not disclose the unconsented work to either Andre or Geraldine Zareian at the time the property was listed.

Those two agents clearly complied with their obligations to discuss with the vendor the need to disclose the unconsented work when they noticed that it was likely the garage had been altered, the committee said.

The agents acknowledged that a censure was appropriate in the circumstances, a summary of findings said.

“The committee determined that a fine was appropriate as a reminder of the importance of maintaining professional standards as well as the need for specific and general deterrence,” its summary said.

For Liu there was an aggravating factor in her dismissive behaviour when asked about the unconsented work and the lack of honesty about the information being confidential.

Barfoot & Thompson said it did not wish to comment.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.