Two licensed real estate agents who worked at an Auckland Harcourts business run by Gurpreet Grewal are guilty of misconduct for failing to alert authorities that $1.2 million was missing from trust accounts.

Joseph Voordouw and Garry Mason went before the Real Estate Agents Disciplinary Tribunal in July.

The pair were both found guilty of misconduct under the Real Estate Agents Act 2008.

Charges were also laid against Grewal but those were stayed pending completion of other proceedings, the tribunal noted. The charge against Preet & Co Real Estate, which once traded as Harcourts Preet & Co, were withdrawn following the agency being put into liquidation.

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So the tribunal only heard the charges against the two men who were the third and fourth defendants.

The tribunal said Voordouw had signed a series of statutory declarations last year saying all bank balances and cash books were reconciled. But the tribunal said those declarations were incorrect.

Mason became aware last August that up to $1m and a further $200,000 had been transferred out of the trust account.

Yet neither of the two men notified the Real Estate Authority of the discrepancies, the tribunal found.

There were no allegations in the case that either man had misused client funds, the tribunal said.

Voordouw said he had relied in good faith on experienced and competent accounting staff to ensure documents were correct. The men described a series of meetings, emails and assurances given about the money.

The tribunal did not find the pair had engaged in misconduct as being reckless or a wilful breach of the Act, but did find the pair were "seriously incompetent or seriously negligent".

Both men have the right to appeal to the High Court.

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Harcourts has been contacted for comment.