Are more real estate agents misleading buyers?

By Brittany Keogh, Anne Gibson

The case of a Tauranga real estate agent who didn't tell a couple the house they were buying would soon lose its sea views could be just the tip of the iceberg.

Property professionals say more and more real agents are misleading buyers by failing to disclose crucial information that could affect what houses are worth.

Their comments come after it was revealed licensed agent Tanya Dunham had failed to notify Rosalie and Jared Ogilvy she was aware of neighbours' plans to build a two-storey unit which would block part of the Forrester Dr property's views.

Ms Dunham was found guilty of misconduct and will be sanctioned by the Real Estate Disciplinary Tribunal next week.

Read more:
Agent knew couple's sea views would be blocked

John Gray, President of Home Owners and Buyers Association of New Zealand (Hobanz), says the Ogilvy's case is not unique, but instead is part of a larger issue.

"Hobanz continues to see many instances where agents have misled purchasers by failing to meet their obligations in respect to disclosure of defects or other matters that will have an impact on the amenity and/or value of their property."

Auckland property lawyer Adina Thorn agrees. The number of clients asking for legal advice after being duped by estate agents steadily increasing, she says.

Most complaints are about failure to disclose information, rather than untrue claims: "Silence can be misleading."

Ms Thorn says the issue appears to be systemic and there are questions that need to be answered.

"How have we still got agents operating like this? Where is the licencee in this? All the checks and balances have gone out the window."

However, Mr Gray believes despite an increasing number of real estate agents behaving poorly, "the vast majority of agents are diligent and work very hard to meet their obligations to both the buyers and sellers".

He recommends prospective buyers do their own research before they purchase by talking to neighbours and requesting resource and building consent reports of neighbouring properties from the local council.

For homeowners who have been misled, the financial cost is high. An exclusive Herald analysis of property data published today revealed sea views add an average of 48 per cent to the cost of an Auckland property.

Ms Thorn estimates the amount of money lost by homeowners who have been duped to be, tens, if not hundreds, of thousands of dollars.

Unfortunately, the Real Estate Disciplinary Tribunal is unable to award monetary damages to complainants, even when complaints are upheld.

Both Mr Gray and Ms Thorn say buyers who have been misled can and should pursue civil actions. The courts are able to, and often do, sentence agents found guilty of breaching contract to pay compensation.

In regards to the Ogilvy's case, both experts agree Ms Dunham should apologise.

Mr Gray says he is "deeply disappointed" in what has happened.

"She should front up. It's not okay to duck for cover," says Ms Thorn.

- NZ Herald

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