Agent 'did not disclose issues, gave incorrect information'

The complainants said the real estate agent did not disclose that the solar energy system on a house did not have council consent. Photo / iStock

A Christchurch real estate agent has been censured, fined $3500 and costs of $3885.83 and ordered to undergo further training after being found guilty of unsatisfactory conduct over not disclosing a string of issues with a property and giving incorrect information about it.

Paul Middleditch was working for Four Seasons Realty, trading as Harcourts Hornby, when he did not disclose problems, according to the Real Estate Agents Authority.

"The details of the complaint are that at the time of purchase of the property the licensee failed to disclose a number of issues to the complainants and also gave incorrect information in regard to the property," the decision said.

An EQC claim on the property had been made outside the standard 90-day period allowed so was likely to be declined, the decision said.

"The licensee told the complainants the claim was valid and waiting on scope of works. The complainants subsequently found the claim had been declined," the decision said.

The complainants said he did not disclose that the solar energy system on a house did not have council consent, did not disclose code compliance issues on two buildings or damage to the buildings from a previous flood or that a neighbour was running a non-consented event centre and that there were legal battles over this.

The decision explained how the complainants had inquired directly about issues.

"They asked the licensee specific questions about the sewage system and the licensee did not tell them the sewage was discharging illegally. The licensee did not tell them the storm water drains were not legal," the decision said.

Middleditch responded that the complainants had a buyers' agent and he denied many of the events.

"He did not make representations in relation to the EQC claim as alleged by the complainants. The information provided by him to the complainants was factually correct and not misleading," the decision said.

Middleditch said a licensee was not required to discover hidden or underlying defects in land. The complainants undertook their own exhaustive investigations into the property, including visits and conversations directly with the vendors and their buyers' agent, to which he was not party.

"He did not know of representations made by the vendors and cannot be responsible for them. All prospective buyers including the complainants were advised to seek legal advice and the complainants did," the decision said of Middleditch's defence.

But the authority found otherwise.

"The licensee breached rule 5.1, 6.4, and 10.7 of the Code of Conduct 2012 and section 72 of the act as he misled the complainants, and prospective buyers, as to the chances of the EQC claim for the property being accepted; omitted information on non-compliant storm water pipes from the complainants, and then failed to inquire into whether there were further code of compliance issues or hidden defects within the property; and was incompetent in determining, or disclosing to the complainants, a problem with the compliance of one of the septic tanks," the decision said.