A real estate agent faces criminal charges and could be jailed for up to seven years over two property transactions in which investigators say he personally benefited by more than $850,000.
Charges laid against former Barfoot & Thompson agent Aaron Hughes last week allege he obtained a valuation showing a Mt Wellington property he was selling was worth at least $1.2 million. He purchased it himself 11 days later through his company Az-Iz Rentals in a private sale for $530,000.
It is alleged the valuation was not disclosed to the elderly sellers Jack and Walter Tata and he on-sold the house within months with little or no improvement work for a $725,000 profit.
Hughes was investigated by the Real Estate Agents Authority after the transaction was revealed by the Weekend Herald in April and now faces one charge of causing loss by deception. The charge has been laid under the Crimes Act, meaning the matter will be heard before the District Court. Hughes faces up to seven years in jail if convicted.
Another charge alleges that Hughes, while acting as a real estate agent, obtained a Mangere Bridge property at 191 Wallace Rd by deception between October last year and January this year.
Charge documents say that on or about August 13 last year, Hughes obtained a valuation for the property showing it was worth at least $720,000 and that this was not disclosed to the vendor.
Hughes' company Kora Rentals Ltd then purchased the property on October 12 for $590,000 and still owns it, according to QV records.
The final charge is for carrying out real estate work without a licence. It is alleged that Hughes marketed three properties earlier this year through Trade Me after he had voluntarily suspended his licence when the Mt Wellington sale was revealed by the Weekend Herald.
Hughes was immediately sacked by Barfoot & Thompson when that story broke and referred for investigation to the REAA.
He is due to make his first appearance in court next month and did not respond to requests for comment yesterday.
The Tatas are now preparing a civil claim against Hughes.
Their lawyer Peter Jefferies said he was awaiting documents from the REAA that would form the basis of a claim for deception or misrepresentation.
"It appears that our initial suspicions may in fact be confirmed as a result of these charges. If the charges are proven or upheld, in my view they will form the basis for a potential claim."
Barfoot director Peter Thompson declined to comment as the matter was now before the courts. But he confirmed both the Mt Wellington and Mangere sales were conducted privately and without the company's knowledge. The Trade Me listings had occurred after the company dismissed Hughes.
REAA chief executive Kevin Lampen-Smith said the agency's role was to protect consumers and promote professional standards so agents who broke the rules were held to account.
"The buying and selling of property is a big deal, both financially and emotionally, and New Zealand's consumers should be able to trust that the person they are dealing with is licensed, will treat them fairly and that they are playing by the rules."
He urged consumers to protect themselves by ensuring they dealt with a licensed agent and checking an agent's disciplinary history on the REAA's public register.