Lane Nichols is a senior NZ Herald reporter

West Auckland real estate agent John Goodrum censured for failure to disclose

West Auckland real estate agent John Goodrum has been censured and fined for failing to disclose information to buyers. Photo / Supplied
West Auckland real estate agent John Goodrum has been censured and fined for failing to disclose information to buyers. Photo / Supplied

A real estate agent has been censured for failing to tell buyers the building inspection reports he provided were paid for by him and prepared by his own company.

West Auckland agent John Goodrum has been fined $5000 by the industry watchdog for unsatisfactory conduct.

His former agency, Buy West Realty Ltd, which traded as Ray White Te Atatu, was also found guilty of unsatisfactory conduct and fined $5000.

Goodrum - known as "the Legend of the West" - provided vendor clients with free building reports through a company of which he was the master franchisee.

The reports were given to potential buyers of homes he marketed. But Goodrum failed to disclose his connection to the inspection company to buyers or reveal that he paid for the reports and received a small commission on each one.

The conflict of interest raised questions about the independence of the reports and whether they could be relied on by purchasers.

Goodrum's offending featured on Fair Go in August 2015. He left Ray White in September that year before being employed by Barfoot & Thompson's Te Atatu branch.

His online bio boasts of him selling 10 times the number of properties as the average agent and being one of the country's top selling salespeople.

A just-released Real Estate Agents Authority decision says it was unfair for Goodrum's buyer customers not to be informed of his connection to the inspection company or the fact he had paid for the reports.

"The [Complaints Assessment] Committee likewise held the Agency guilty of unsatisfactory conduct because the Licensee had acted on behalf of the Agency with its full knowledge and consent."

Goodrum claimed the reports were undertaken by independent inspectors, meaning he had no say over their content or conclusions.

He also claimed he received "professional advice" that he was not required to disclose his connection with the inspection company or his financial links.

Furthermore, he told investigators he advised customers they were "at liberty" to obtain their own reports and he had not received any complaints.

Ray White argued it had properly supervised Goodrum and even obtained and acted on advice that he should disclose his connection in writing to purchasers.

However, the authority ruled that Goodrum had committed a serious breach of his obligations.

It was important that buyers had confidence in the independence and quality of pre-purchase reports, which they relied on to identify hidden defects. Agents had a duty to be "candid and fair" in their dealings with customers.

"It should have been plainly obvious to the Licensee that by withholding the information from customers, he was being less than candid and fair."

Withholding the information suggested customers would be less persuaded to buy the properties if aware of Goodrum's connections, the decision said.

"This does not reflect well on him."

Ray White's head of agency operations, Graeme Fraser, said: "In becoming aware of the conflict, we facilitated a mediation process to ensure concerns were addressed correctly. We withdrew our support of Mr Goodrum when we understood the extent of the conflict."

Barfoot director Peter Thompson said the findings related to Goodrum's time at Ray White.

"I can however confirm we have not had an issue with John since he has been working with us."

- NZ Herald

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