Rules restricting real estate agents from benefitting in a property sale beyond their commission do not apply to subsequent deals done after a sale contract is signed, the High Court ruled in a dispute involving south Auckland property developer Glen William Cooper.
Mr Cooper seeks to cancel sale of four properties by his company Goldline Properties Ltd alleging Counties Realty agent Ian Croft did not disclose he was in league with the buyer, in breach of rules in the Real Estate Agents Act.
The High Court was told Maree Dawn Marsh signed up in mid-2020 to buy four vacant lots from Goldline Properties. She intended to buy relocatable houses, selling after shifting them on site. Ian Croft acted for Goldline, selling the vacant lots. Some weeks later, Ms Marsh turned to Mr Croft for advice and assistance after realising she would not be able to get finance for the project. She had previous dealings with Mr Croft who had acted as vendor agent when she bought other real estate. A joint venture agreement designed to advance her new project was signed in July 2020 by Ms Marsh, first with Mr Croft personally and later with his company One Property & Co Ltd. Goldline Properties gave notice cancelling sale of the four lots to Ms Marsh, stating Mr Croft’s failure to disclose his interest as purchaser as required by the Real Estate Agents Act gave it an automatic right of cancellation.
Ms Marsh registered caveats over the land to protect her rights as intending buyer. Associate judge Lester ruled the caveats remain. The conflicts of interest existing when a real estate agent purchases from a vendor client do not arise if the agent gains an interest in the property after the sale, Judge Lester said.
After the four lots were sold in mid-2020, Mr Croft’s role as agent for the sale was at an end. Ms Marsh said there was no intention when she purcashed that Mr Croft would be involved in the project. He became involved as a joint venture participant only at a later date, she said.
Marsh v. Goldline Properties Ltd – High Court (23.02.23)
23.024