Real Estate Agents Act fines are not ordered as compensation for agent misrepresentations in property sales. Fines are penalties for unprofessional conduct.
The Real Estate Complaints Assessment Committee ruled Hawkes Bay agent Heatha Edwards demonstrated ‘unsatisfactory conduct’ when facilitating a 2016 residential sale to Graeme Bridge of a property in Bibby Street, Waipawa. Mr Bridge complained an advertising flyer misrepresented the state of both the property and its boundary fence. He purchased the property sight unseen; he was living in the Bay of Islands. He demanded some $49,300; the cost of bringing the property up to standard represented in the flyer. The Complaints Committee fined Ms Edwards $5000 and ordered remedial professional education. On appeal, the Real Estate Agents Disciplinary Tribunal ordered Ms Edwards to pay Mr Bridges $10,000 as ‘relief from the consequences of her misrepresentations’. The order to pay $10,000 was overturned by the High Court.
Justice Doogue said the Tribunal’s power to ‘rectify’ the consequences of an agent’s misrepresentations typically extends to putting the property back on the market with reselling costs falling on the agent. ‘Rectification’ is not an avenue to recover compensation.
The High Court was told Mr Bridge obtained a building report before declaring the Bibby Street purchase unconditional. This report detailed all faults with the property, including issues misrepresented in the advertising flyer. This put Mr Bridges on notice that the property’s condition was not necessarily as advertised, Justice Doogue said. Ms Edwards said Mr Bridges did not in fact spend any money to make good the complained deficiencies and sold Bibby Street at a profit eighteen months after purchase.
Edwards v. Bridge – High Court (12.09.19)
19.165