Two Auckland real estate agents and their boss are awaiting punishment for their part in two deals where homes were on-sold - in one case on the same day - for huge mark-ups.
Aaron Hughes, who was dismissed by Barfoot & Thompson earlier this year when the Weekend Herald revealed he had privately on-sold another property in Mt Wellington for a $725,000 profit, pleaded guilty to misconduct and accepted he should lose his licence at a penalty hearing yesterday over the latest revelations.
The former Papatoetoe agent and two colleagues were reported to the Real Estate Agents Authority (REAA) for their role in the 2014 sales of two South Auckland properties.
One was sold three times in 11 days for a total mark-up of $95,000. The other was "flipped" on the same day for an extra $100,000, with Hughes receiving double commission totalling about $45,000 on the sale.
A Weekend Herald investigation has found:
• Barfoot made financial settlements to the two original sellers, believed to total about $150,000, and helped negotiate a $55,000 discount for an aggrieved investor.
• The company carried out an internal audit after the three agents' activities came to light.
• Barfoot's former Papatoetoe branch manager and Hughes' then-boss, Avind Lal, was dismissed after the company identified "irregularities" while he was on bereavement leave relating to the two sales and lack of supervision.
• Hughes and fellow Papatoetoe agent Kymm Hape were given final warnings in late 2014 and reported to the REAA. Their conduct was not deemed serious enough to warrant dismissal.
• Hughes is also under investigation by the REAA for buying the Mt Wellington home privately through his company in February last year for $530,000, then on-selling it months later for $1.255 million.
REAA submissions to yesterday's hearing said Hughes' actions amounted to dishonesty which demanded his licence be cancelled.
"In both proceedings, Mr Hughes placed his own interest in obtaining commission before the interests of clients in obtaining the best price for their properties."
His conduct was a breach of trust and an "egregious breach of his fundamental fiduciary duty".
Hughes' lawyer, Simon Stokes, said his client accepted his offending and regretted his actions. Cancellation of his licence was inevitable and would have an immense financial impact on Hughes and his family.
But Hughes rejected dishonesty accusations.
"He admits that there were breaches which he regrets, but he did not set out to be deliberately dishonest when dealing with [the two original vendors]."
Hughes, Lal and Hape declined to comment.
Barfoot director Peter Thompson said the company had apologised to those affected and was disappointed the three agents had brought its good name into disrepute.
On discovering irregularities over the sales, the firm launched an investigation and dismissed Lal in late 2014. Hughes and Hape were given final warnings and the trio were referred to the REAA.
Thompson confirmed private settlement agreements were reached with the two original owners, one of them a widow in her 80s.
"Where there is an obvious breach from our side, we will endeavour where we believe the vendors or any particular party have been wronged [to] work with them through to a satisfactory settlement."
Thompson said the company took its legal responsibilities seriously, investigated irregularities immediately and worked closely with REAA investigators.
It was unfortunate the Papatoetoe cases had taken so long to investigate and prosecute, he said. He believed the REAA should be given powers to hand down interim suspensions while agents were under investigation.
He could not guarantee that other Barfoot agents weren't engaged in similar activity: "I don't think any agency could give a 100 per cent guarantee."
One of the original sellers, David Hedge, was disappointed at what had transpired.
He received a settlement after his sick, elderly mother sold her Carlie St, Papatoetoe home through Hughes in September 2014.
The property was sold twice more in 11 days with a $95,000 mark-up.
Meanwhile, Mark Mager and his ex-wife sold their Fitzroy St, Papatoetoe house through Hughes in July 2014 during a marriage break-up.
They received a $100,000 settlement from Barfoot, had commission fees wiped and legal costs paid after the property was resold the same day for an additional $100,000.
Mager, a 49-year-old electrician, questioned what monitoring was put in place given Hughes' subsequent involvement in the Mt Wellington sale.