A long, draw-out case has ended badly for real estate firm Barfoot & Thompson.
A long, draw-out case has ended badly for real estate firm Barfoot & Thompson.
Real estate firm Barfoot & Thompson has been found guilty of unsatisfactory conduct relating to potential conflicts of interest involving its agents.
It follows a protracted court process that saw the company mount repeated legal challenges to an ruling made against it by the industry watchdog.
The case involved aninternal Barfoot policy which allows agents who are buying property listed with the company to deal directly with sellers. Barfoot director Peter Thompson says the firm is reviewing the decision and will make changes where necessary to ensure the client's best interests are being met.
A Court of Appeal decision says Barfoot's policy was an "abdication of its primary responsibility" to its clients and amounted to unsatisfactory conduct. "The policy leaves the client in the hands of a licensee whose objective as would-be purchaser necessarily conflicts with the best interest of the client as vendor," the decision says.
"Moreover, the licensee may be in possession of information that the client could reasonably expect to be confidential and to other material information that ought properly to be disclosed to the client."
The court raised the possibility of Barfoot licensees using confidential information to their advantage when trying to buy property or failing to disclose other offers "which may be material to the price the client would accept".
It cited a 2012 transaction in Te Atatu when two Barfoot agents looking for an investment purchased a property listed by two of their colleagues after a "team viewing".
The purchasers negotiated directly with the vendors, who revealed the level of previous interest in the property and the fact they were keen to sell before the current tenant left. The agents bought the property for $360,000 and received more than $5700 in commission.
The unsatisfactory conduct ruling was made by the authority's complaints assessment committee following two complaints in 2013. The committee censured Barfoot, ordered a refund of fees of $5000 to two complainants and fined the company $2500.
Barfoot unsuccessfully appealed the decision to the Real Estate Agents Disciplinary Tribunal and then the High Court in 2014.
