Institute slams door on action over agent

Graeme Sawyer

The Real Estate Institute has rejected taking any further action against a Napier agent whose former firm was convicted after he attempted to buy two flats for almost half the asking price.

Vernon Tamatea, the institute's legal counsel and compliance manager, has investigated Graeme Sawyer's actions and written a report which recommends against the institute going to the Real Estate Agents Licensing Board.

The Government has charged the institute with policing its 16,000 agents, a system the Consumers Institute's David Russell and Auckland real estate barrister John Waymouth say is deeply flawed due to a conflict of interest.

The institute's rejection of further action in the Napier case has angered vendor Deb Leask, who complained about the actions of Mr Sawyer, a former residential manager at Bayleys Napier, after he offered to buy her two Napier flats for $230,000 when she had sought $400,000.

Mr Tamatea's report outlines the events involving the sale of the two-bedroom properties at 4/74 and 5/74 The Esplanade.

Associate Justice Minister Clayton Cosgrove said he was "surprised" and "disturbed" by the institute's decision not to take further action against the agent and asked officials to report back after a letter from Ms Leask was sent to his office.

"I have to say I'm disturbed the institute did not avail itself of the full range of disciplinary procedures in the legislation," he said.

"I have no statutory powers of investigation. I am not judge and jury but, on the face of it, I'm surprised."

The Real Estate Agents Act 1976 provided for "robust sanctions" against agents who did not act ethically.

"The question is not whether the act is deficient, the question is why weren't the robust sanctions used?" he said.

The act provided for a fine of up to $5000 for a licensed agent and for a licence to be revoked, and also a fine of up to $750 for a salesperson who breached the rules.

Ms Leask lives in Australia so her father, Bernie Leask, had power of attorney and dealt with Bayleys and agent John Payne who listed the flats. Mr Leask signed a listing authority with Bayleys for $250,000, Mr Tamatea found, even though $400,000 was being sought.

Bayleys told Mr Leask they were only listing the flats for $250,000 so that less commission would be paid on the properties than the higher amount due if the listing authority stated the full asking price of $400,000, Mr Tamatea found.

Soon after Bayleys listed the flats, an offer of $230,000 was faxed to Ms Leask in Australia. She was upset by such a low offer, which she learned came from Mr Sawyer. She complained to Bayleys, saying she had established the purchaser was Mr Sawyer, an employee of that agency and its residential manager.

Mr Tamatea said Mr Sawyer then emailed Ms Leask, stating valuers Telfer Young had assessed the flats and found them to be worth just $230,000 to $240,000. The valuation never existed.

Mr Tamatea said although there had been breaches of the rules and Bayleys had pleaded guilty to offences, no action would be taken directly against Mr Sawyer or Mr Payne.

Bayleys was fined $750 for each of three offences involving the wrongful listing amount of $250,000, false claims about the valuation and the low offer from Mr Sawyer.

Mr Tamatea said it was appropriate that the matter was handled by the institute's regional disciplinary subcommittee, which was the "lower level of disciplinary procedures available".

He found that there was no proof of any intent to defraud Ms Leask, based on the offer made by Mr Sawyer.

"By that I mean I do not believe there is sufficient evidence to reach the threshold or standard of proof required which is beyond a reasonable doubt that Mr Sawyer had intended to defraud the complainant," Mr Tamatea wrote.

The institute would need a higher standard of proof before it could take the matter to the licensing board - the authority that licenses about 1600 real estate offices employing 3500 licensees and branch managers and supporting 16,000 salespeople.

"I am satisfied that the actions by the institute as set out are in accordance with the Real Estate Agents Act and in accordance with the institute's rules," Mr Tamatea concluded.


HOW THE SYSTEM WORKS

* Grievances about agents go to the Real Estate Institute.

* The institute decides how it will handle a complaint.

* Many complaints are rejected but, if accepted, the institute decides which avenue is best.

* Some complaints go to regional disciplinary sub-committees and agents can be fined the maximum $750.

* More serious cases go to the Real Estate Agents Licensing Board and the agent can be struck off.


- Additional reporting by Anne Beston

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