Tribunal chairman David Plunkett dismissed other parts of the buyer’s appeal.
The appellant, identified only as UM, bought the superette at the auction but alleged the agent’s advertising and representation of it was misleading, particularly about the rent paid and the tenant’s identity.
She also complained about the auctioneer, referred to only as SU, who is also a licensed agent.
She initially complained to the Real Estate Authority, which formed a complaints assessment committee that wrote to Gow and the auctioneer about their obligations.
The complainant was unhappy about that so she appealed to the tribunal, where she was successful “in respect of Mr Gow’s misleading statement as to the actual rent paid and as to his failure to review the bank statements and inform the purchaser of the reduced rent paid shortly before the auction”.
Matters dated back to late 2020 when Gow told her the dairy was well “patroned” and operating well, and that the tenant had been paying rent regularly.
But when she bought the shop, Gow gave her the payment documents, which showed the tenant had not paid rent up to date.
The auctioneer told her the property could be leased at any time, but she said she was shocked to discover later that many commercial properties in the CBD were empty.
The auctioneer had urged her to increase her bid by saying he would buy the property himself. She said she had told the pair she had no commercial investment experience. She wanted to cancel the sale and be refunded her deposit.
She complained to the authority about Gow and the auctioneer, alleging:
- The two realised she was a newcomer to the business and put a great deal of pressure on her;
- False advertisement about the annual return;
- False advertisement about outgoing costs;
- False advertisement about the identity of the tenant and duration of the tenant’s business;
- Misleading information about bank lending;
- The auctioneer assured her CBD property could be leased out at any minute, saying he would buy the property if she didn’t keep up the bidding.
The Real Estate Authority wrote to Gow and the auctioneer reminding them they had to meet their obligations as licensees. It was recommended they review their practices on contractual documents but the authority was unable to identify any other law breaches.
The buyer was dissatisfied so her complaint then went to an assessment committee. Gow told that entity that the auction was virtual via livestream with her telephone bids being relayed to the auctioneer by him. He denied giving false information to her.
She alleged the statement about the store returning $49,062 annually was false because the rent was cut by $9400 in 2020 due to Covid lockdowns.
Gow said he didn’t tell her that the tenant had paid full rent and expenses during the lockdowns in 2020. During the inspection of the premises, she asked how the store had been trading during 2020 and he told her that he did not know. Bank statements were available, but she didn’t ask for them during the inspection, he said.
The auctioneer said he had never commented on the ease of releasing residential or commercial property because it was not his area of expertise. He was not in the room or on the telephone to the buyer when she agreed to raise her bid.
The tribunal upheld her challenge about Gow’s misleading statements on the rent.
The appeal was otherwise dismissed. The committee’s decision would therefore be modified.
Any challenge to its decision had to be made this week. A separate hearing will now take place to decide what penalty is appropriate.
A Colliers spokesperson said today it acknowledged the decision “and as this remains an ongoing matter, we are unable to comment”.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
