Private house sale company to fight fees challenge

The Real Estate Institute is threatening legal action against a property sales marketing company, claiming it breaks the law when it takes payment for helping people sell their homes.

But Invercargill-based No Commission Sales said it would vigorously defend its position and had saved homeowners $2.2 million since opening in February last year.

Institute president Howard Morley said an injunction was being sought against No Commission in the High Court at Rotorua. The institute's action claims No Commission's fixed fee is an illegal reward under the Real Estate Agents Act.

He said the fee was charged regardless of whether a property was sold.

The institute wants the court to rule that No Commission has been acting as a real estate agency because it has been receiving payments and should, therefore, become a licensed operation.

"The fact that they don't charge commission based on a percentage scale does not, in our view, enable them to operate outside the act," Morley said.

But John Smart, a No Commission director and shareholder, said his business was entirely legal and designed to help people sell their homes without using licensed agents, who must be institute members.

Smart said No Commission had received no documents from the institute, nor had these been lodged with the Rotorua court when he asked to get copies.

"The proceedings - apparently issued but not yet served - will be most strenuously resisted," Smart said.

No Commission, which has 22 franchises and has been involved in the sale of hundreds of properties, had done nothing wrong. Instead, it was helping take the worry out of the house-selling business and saving people millions of dollars, Smart said.

Vendors paid between $2500 and $9900 to receive No Commission's services, depending on how much international or local marketing or advertising was needed.

"We take some of the stress out of this process by equipping homeowners with the tools, advice and forum to effectively market their own homes," Smart said.

Smart cited a case heard in the High Court at Auckland in 1996 when, he said, the institute failed in its action against a private sales company.

Growing business

* No Commission Property Sales, based in Invercargill.
* Nelson-based Green Door.
* No Percentage Property Sales, Christchurch-based.
* Home Sell, which promotes a fortnightly listings magazine.