A former Harcourts agent was found to have not told his buyer about negative building inspection report.
Ben Cartwright, who worked for Harcourts at the time and is now apparently with Ray White Johnsonville, sold a home with rot and "bogged" weatherboards and other damage.
He was ordered to pay $35,000, which includes $20,000 worth of general damages, which is the largest penalty believed to have ever come out of the Real Estate Agents Disciplinary Tribunal.
The following is contained in the tribunal's decision:
Cressida Saywood, with her partner, bought the house from Cartwright in 2015.
She later became aware of "significant rot in a window frame", so she ordered a building inspection which revealed rot, "bogged" weatherboards, and other damage which needed repairing.
Mr Cartwright told Ms Saywood that an earlier sale had not proceeded due to financial reasons, rather than the truth: that the deal was canceled due to the negative inspection report.
When Ms Saywood then re-sold the house, the incurred $185,000 loss and were out of pocket a total of $207,731.
Cartwright was order to undergo training, pay $20,000 to Saywood for the loss she had suffered, and another $10,518 for inspection, surveying, and legal costs. And he further has to pay a fine of $5,000.
A lawyer who trains real estate agents John Waymouth, said the case was a warning for the industry, and the fine was the largest he knew of for that kind of case.
In a written statement, he wrote that other agents should beware.
"This could be the beginning of a disturbing trend. Agents found liable for unsatisfactory conduct or misconduct were being ordered to pay people compensation which is in effect damages for other non-specific matters."
Hartcourts Group CEO Chris Kennedy said Cartwright had pleaded guilty, and he was no longer with Harcourts, so he had no further comment.
Since we're discussing New Zealand...
Agent Who Bought A Home He Was Selling Is Censured, Fined
Jinlei "Leo" Zhang, an agent for Ray White, has been censured and fined because his wife bought a client's home without him disclosing his conflict of interest.
Mr Zhang was an agent for Pure Realty, which traded as Ray White Mt Albert. In 2015, a seller listed a property with one of Mr Zhang's colleagues at the agency.
His colleague asked him if he knew of any potential buyers, and he said he did, one "Mr Yan".
Yan agreed to buy the property for $550,000, the vendors accepted, and Mr Yan deposited $55,000.
About 2 months later, Mr Yan found that there was volcanic rock under the property, which required a different resource consent than the one the vendors had provided.
Instead he chose to not continue the contract. He said he would rather lose his deposit than have to pay an unknown amount to build on the property.
Around the same time, Mr Zhang and his wife, Fang Liu, talked about buying a new home themselves.
Zhang approached Yan and asked if he could nominate his purchase agreement to Zhang instead. Yan agreed.
Zhang paid Yan $55,000 as a reimbursement for his deposit, and then executed the nomination agreement in the name of his wife.
He said it was to go to his wife, since her parents had provided the funds for the purchase. The deal was settled in March 2015.
A year later, the original vendors saw Mr Zhang at the property. They said they were not aware until then that Zhang was a Ray White agent.
They said his association with the firm had never been disclosed, nor had he provided them with a certified valuation as required.
According to the Real Estate Disciplinary Tribunal's decision, Mr Zhang himself notified the agency of the issue, and they reported it to the proper authority.
Before the tribunal he accepted that he had not informed the vendors that his wife was the nominated purchaser, he had not obtained their informed consent, and he had retained his share of the commission from the sale.
He was charged with misconduct which was "seriously incompetent" or "seriously negligent".
The prosecutor noted Mr Zhang did not act deliberately or in bad faith, had shown remorse, and had offered to repay his commission to the vendors.
However, he also said the tribunal must send a strong message to licensees about the importance of disclosure.
Mr Zhang was fined $3,000, censured, and ordered to undertake conflict of interest training.
However, he was not ordered to repay the commission, as Mr Yan's offer had been accepted before Mr Zhang had any financial interest in the property.
Neither of these stories are intended to reflect on the named agencies. They are relatively large agencies, and the agents involved have moved on.
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