Estate agent guilty over $47k 'buyer's' fee

A real estate agent who left a vendor liable for a second commission while pocketing a $47,500 fee from a buyer has been found guilty of misconduct. Photo / Thinkstock

A real estate agent who left a vendor liable for a second commission while pocketing a $47,500 fee from a buyer has been found guilty of misconduct.

Ian Morgan denied the charges but the Real Estate Agents Disciplinary Tribunal found the Matamata agent acted with serious negligence when he took the fee without the knowledge of his employer while the farm in question was still part of an agency listing with PGG Wrightson Real Estate.

Morgan, a prominent rural agent, was poached by PGG Wrightson from Bayleys in 2009 and was "extremely well paid" and in a position of seniority and trust as a contractor to the company, according to the decision released last week.

In December 2010, Morgan signed a sale document for a 1400ha property known as Waitoki Downs on behalf of Jim Shallue, but the sale didn't settle. In August the following year, the purchaser renegotiated and paid a $400,000 deposit, earning PGG Wrightson a $230,000 commission, of which $136,000 went to Morgan.

But in February 2012, when the first sale remained unsettled, Morgan was called by a second interested party - Matthew Denize of FarmRight - who had been in private negotiations with Mr Shallue over 600ha of the property, near Te Aroha.

Morgan helped the men break an impasse and reach an agreed price but when his personal assistant sent through the sale and purchase agreement it contained the PGG Wrightson logo and address, and stated that the $450,000 deposit be paid to the agency.

Reference to PGG Wrightson was crossed out by Mr Shallue's lawyers and Morgan told his employer of his involvement but said no commission had been sought, despite later being paid $47,500.

The original purchaser renegotiated his contract to buy the rest of the property.

PGG Wrightson launched an investigation before terminating Morgan's contract and complaining to police and the Real Estate Agent's Authority.

In his defence, Morgan said the agency listing with PGG Wrightson had ended so Mr Shallue was not liable to pay a second commission on the second sale, and that under his contract he had freedom to work for people who were not clients of the agency without sharing any commission.

However, the vendor had signed a second agency agreement with PGG Wrightson which expired on February 28, 2012.

The tribunal also heard from Mr Shallue and Mr Denize that they understood a fee would be paid by Mr Denize and that they were happy with the arrangement.

Mr Shallue said without Morgan's efforts he might have lost millions of dollars and Mr Denize said he had no complaint about Morgan.

But the prosecution said Morgan deliberately withheld details of the fee from PGG Wrightson to avoid splitting the money with the agency.

The tribunal said the agency listing still existed and Morgan was reckless in putting Mr Shallue at risk of paying a double commission.

On the fee from Mr Denize, the tribunal said it was a "serious departure from ethical standards" and that Morgan was in breach of his contract with PGG Wrightson.

Morgan was found guilty of the lesser unsatisfactory conduct, and misconduct at the lower end of the scale.

He faces a fine and contribution to costs of the case.

Morgan, who now works for Property Brokers Matamata and was named Rural Salesperson of the Year runner-up by the Real Estate Institute of New Zealand last year, said he still believed the agency listing had ended.