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The principal agent of a Queenstown-based real estate company has been found to have a poor understanding of the Real Estate Agents Act and must undertake further training.
In addition, the company, Browns Real Estate Ltd, trading as Sotheby's International Realty, has been fined $4000 by the Real Estate Agents Authority for engaging in unsatisfactory conduct.
The company is appealing the ruling and penalties.
A former staff member whose contract with Sotheby's was terminated complained to the authority about possible breaches of the Act by the company and its principal agent. A complaints assessment committee hearing was held in August.
In its decision, released this week, the committee did not name the principal agent.
Sotheby's website, which promotes the company as "New Zealand's leading national premium real estate agency", lists its founders as Julian Brown and Mark Harris.
The two men are named as the main head office agents on the authority's public register.
A Sotheby's representative told the committee it appeared the matter was the continuation of an employment-contractor dispute which began when the staff member's contract was terminated.
The committee disagreed.
"This case is not a continuation of a retaliation ... but very much the result of an investigation initiated by the committee," its decision said.
The breaches alleged by the former staff member, who was known as "Mr C1" in the decision, included Sotheby's advertising and/or marketing property without valid listing agreements, not properly supervising staff, and the principal agent allowing a staff member to sign a document as a branch manager when he was not.
Mr C1 gave examples of the breaches, including Sotheby's continuing to market properties he had listed despite listing agreements having expired.
On another occasion, Mr C1 showed a prospective client through a property and did not find out until later there was no valid listing agreement for the property in place.
The Sotheby's representative told the complaints committee he did not believe an agency agreement had to be in place until an offer was presented.
The committee disagreed.
The Act made it clear an agreement had to be in place for any real estate work which involved the sale, purchase or other disposal or acquisition of land or property, and that must include an agent showing a prospective buyer through a property.
The committee also disagreed with his view that the rules were different for commercial and residential listings.
"The committee carefully considered the submissions made the licensee. It is apparent the licensee still does not have a sound knowledge of the Act.
"Both commercial transactions and residential transactions fall under the definition of transaction as defined in the Act - there is no distinction between the two.
"The licensee will therefore benefit from proper training," it said.
The company was censured and the principal agent ordered to register within one month for an Open Polytechnic course covering knowledge of real estate licensing and the code of professional company.
The company was also ordered to pay a fine of $4000 within one month.