An Auckland real estate agent who sold a property with illegal rooms was found guilty of unsatisfactory conduct, fined $2000, reprimanded, ordered to undergo training and told to pay the victim $1000.
In the case where the victim said dreams had been "shattered," a Real Estate Authority Complaints Assessment Committee said Siu Yeung of Bayleys Real Estate advertised a property which had an unconsented kitchenette and two unconsented bedrooms.
He advertised it as having five bedrooms, two living rooms, two bathrooms, one kitchen and a kitchenette.
But the vendor did not tell the agent - also known as Sam Yeung - that the downstairs area of the property had unconsented work and the agent thought the downstairs area was part of the original house, the committee decision said.
Yet there were "red flags" which the committee found ought to have prompted Yeung to make inquiries.
A prudent agent should have asked questions about the compliance of the renovations and the consent. Worse, the LIM report revealed nothing about the obviously older house having clearly been renovated.
Yeung works at Bayleys Mairangi Bay where he is a member of the firm's $150m+ Sales Club Member. His profile says he was that agency's top salesperson in the last three years and in the top 5 per cent of Bayleys salespeople for two years.
"This is the first time I have been fined by the authority," he said today, referring to having worked for Bayleys for more than 10 years. "It's not really my fault."
But the committee said Yeung should have known and disclosed far more about the place he was selling than he did.
"A prudent agent would have confirmed with the vendor in those circumstances that the works complied with any council requirements under the Building Act," the decision said.
In 2016, the property was sold and rooms were rented.
But a tenant complained to the Tenancy Tribunal and the buyer then found out about the illegal rooms so a complaint was laid with the authority against Yeung.
"The complainant considers that his dream of owning a five-bedroom property with the potential to rent out part of it to help pay for the mortgage has been shattered," the complaint assessment committee's penalty order said.
In his defence, Yeung told the committee he was unaware the downstairs area was unconsented, the vendors did not disclose that and the entire house looked consistent and had all recently been renovated.
There was no way of detecting the downstairs area was converted, Yeung said.
But the authority viewed the case under sections of the Real Estate Agents Act 2008 on professional conduct, client care, a duty to act fairly, a duty not to mislead or withhold information and the need for supervision and management of salespersons by the firm they worked for.
The complainant said the agent had "an ignorant attitude on settlement" and had turned a blind eye to the possible lack of council consents on an extensively renovated property.
Tony Bayley, Bayleys Real Estate group licensee and Bayley Corporation agency compliance manager, said today that the company accepted the decision and would be reviewing its training programmes in accordance with the authority's recommendation.