Real estate agency fined for not supporting agent under 'extreme pressure'

File photo / NZ Herald

A Hutt Valley real estate agency has been censured and fined for not providing adequate support to one of their agents who was put under "extreme pressure" to hand over keys to a property that had not been settled.

The Real Estate Agents Authority's (REAA) Complaints Assessment Committee found Hutt City Limited guilty of unsatisfactory conduct in a decision released today.

Along with the censure, the committee ordered the company to pay a fine of $5000 to the REAA.

The complainant was selling her mother's property through the agency last year. The complainant had power of attorney over her mother's affairs.

On the day of the sale last April, there was some work being done on the house and the buyers wanted to store some of their belongings in the owner's garage while settlement was going through.

That was agreed to by the complainant, but she said she never gave permission for keys to be handed to the buyers before settlement was finalised.

The unnamed real estate agent who was involved in the sale was contacted by the buyers about lunchtime urging her to pass the keys over because the removal company they were using needed to get to another job that day.

She explained she had not yet received a fax from the seller's lawyer authorising the keys could be handed over, but the buyers became agitated.

"I released the keys because I was under extreme pressure and as I believed there would be no delay in settlement," she told the committee.

"I did it out of empathy for my purchasers, not for any other reason."

However, the bank refused to released the purchaser's mortgage on the grounds that the purchasers could not get insurance for the property, so settlement did not occur.

The lawyer involved in the settlement was acting for the buyer and seller, and she suggested a short-term rental arrangement until construction work was complete and insurance could be gained.

The committee was concerned that nobody, especially the agency, had considered the unfinished construction work could hold up settlement of the property and no contingency plans were in place.

The committee also said the agent had no authority to hand over keys to the property before settlement was finalised.

The critical issue was the apparent lack of supervision of the agent by the company, through its supervising agent John Ross.

It said there was no evidence of the agent receiving support when the purchaser was obviously "extremely agitated".

"...the committee would have thought that John Ross, as supervising agent licensee, would have become aware of the situation and would have ensured that support was provided whether by an experienced salesperson, the branch manager or himself, after all this would seem to have been an 'out of the norm' situation."

The complainant was also concerned over the tenancy arrangements, however that issue fell with the lawyer, the committee said.

Mr Ross said he was unable to comment as he was appealing against the decision to the Real Estate Tribunal.

However, an REAA spokeswoman said Mr Ross had run out of time to appeal against the decision.