Real estate agent fined for failing to disclose leak

The complainants had claimed prior to their purchasing the property the agent had failed to disclose there was a historical leak at the property. Photo / File

A real estate agent has been fined $2000 and censured over her failure to disclose a serious historic leak and rotting wall.

In July this year, the Real Estate Agents Authority (REAA) found Whangarei real estate agent Adrienne Battersby guilty of unsatisfactory conduct under section 89(2)(b) of the Real Estate Agents Act 2008.

In a decision released today it was revealed the REAA, on August 28, ordered she receive a censure and pay a fine of $2000 to the authority within 21 working days of the decision.

The complainants had claimed prior to their purchasing the property the agent had failed to disclose there was a historical leak at the property, or disclose the dishwasher was not working.

They said it wasn't till the day they moved into the property that they noticed a sodden carpet and a wet area extending about a metre out from one of its walls.

A builder the complainants hired found one wall was completely rotten and blocks had been put into the wall to support it and then covered up again.

While they had not obtained a building report prior to the purchase they said they'd asked Ms Battersby if there was anything of note and nothing was declared.

While they said the agent had informed them the wall had been replaced, they said it wasn't till after the settlement that she attributed it to a historical leak.

The complainants requested an acknowledgement from Ms Battersby of her failure to disclose the issues, an apology and that her actions were noted by her agency and the REAA.

However, Ms Battersby claimed she did note the wall as having been replaced and that she'd discussed this with the complainant and her father.

She said she'd told all buyers about the leak and drew attention to paragraph four of the consent signed by the complainants that advised them to include a LIM and/or building report. However, Ms Battersby said the complainants insisted they did not require these.

However, the REAA ruled in favour of the complainants and deemed Ms Battersby had failed to fulfil her responsibilities under the Real Estate Agents Act and ensure the buyers were sufficiently informed of potential leaking or construction risks.

In explaining their decision to fine and censure Ms Battersby it said she'd failed in her duty to act as a conduit for the vendor and pass on all the appropriate information.

"The Committee notes the consequences of this conduct have had a serious outcome for the complainant who finds herself in a situation where she is faced with uncertain costs to make good this wall in her property."

While the committee agreed with Ms Battersby that a LIM or building report could have resulted in a different outcome, it also noted that if the issue had been disclosed then the complainants might have then decided to seek the reports.

However, the committee said it was not "reasonable" or within its power to order Ms Battersby to be held responsible for the not-yet-established costs of the investigation into and eventual repair of the property.

It therefore ruled the censure and fine was an appropriate reflection of the seriousness of the conduct.