Agent guilty of breaching industry code

By ANNE GIBSON

The Real Estate Institute's vice-president, Howard Morley, has been found guilty of breaching an industry code of ethics and has paid a fine and costs.

But Mr Morley still intends to become the institute's president this year, heading a body which sets ethical standards for about 12,000 real estate agents and disciplines those who err.

Through his company, Auckland Property Management, Mr Morley faced two charges of breaching the code, but pleaded guilty to only one, which involved breaching an institute rule stipulating that members should follow good agency practice and conduct themselves in a manner which reflected well on the institute and the profession.

But institute president Graeme Woodley said there was no issue with Mr Morley assuming the presidency on September 8 at the institute's annual general meeting in Christchurch. Mr Woodley will stand down then, having completed his two-year term, when it is usual for the vice-president to step forward.

The institute had sought advice from its own barrister, David Bigio, on whether Mr Morley could still become president, Mr Woodley said.

"We wanted to make sure it was totally transparent and he [Bigio] said it was just like getting a parking ticket. Howard Morley just happened to have a staff member who sent out letters to the landlords they were looking after," Woodley said.

The matter dates back to August 2001, when Platt Property Management went under and Mr Morley's firm was appointed in a gate-keeper role to manage the business until a financial audit could be completed and the business sold.

Interactive Property Management bought Platt's rent role but alleged that Mr Morley's firm had poached the business and kept most of the landlords on his books, so Interactive took a complaint to the institute's Auckland branch.

Interactive owner Leonie Freeman complained that Mr Morley's firm failed to produce all the Platt files on the settlement of the deal, but the institute said this was not done in bad faith or with any intention to misappropriate Platt's property. Ms Freeman is angry about the outcome.

"I am concerned that this complaints process appears to me to be flawed," she said. "A member of the public has the ability to request an independent review if unhappy with the result, but a member of the institute has no ability to seek further redress or an independent review."

Ms Freeman's barrister, John Waymouth, said he had received instructions to lodge an application to the Real Estate Agents Licensing Board for the cancellation or suspension of Auckland Property Management's licence, which would mean the firm could no longer operate.

"I consider the disciplinary outcome has been somewhat of a whitewash, taking into account the overall seriousness of what occurred, and I don't believe the interests of the real estate industry as a whole have been served well by the manner in which this has been handled and the outcome of the process. I especially object to the way the hearing was conducted in secret." Mr Waymouth added that he had no idea what had happened to the second charge laid against Mr Morley's firm.

But Mr Woodley said the institute had learned from the matter and he would be writing an article for New Zealand Real Estate, the institute's journal, on the difficulties of selling a property management firm's rent roll.

Ethics breach

* How the Platt controversy unwound during the past three years:

* Howard Morley's firm appointed as caretaker of the failed Platt business.

* Leonie Freeman's firm buys Platt's rent role.

* Not all files are handed over - most landlords stay with Morley.

* Freeman complains to the institute that the caretaker has turned poacher.

* Morley is reprimanded and fined for breaching a code of ethics.

* He has kept most of the Platt business, but the fight is not over yet.

* Freeman's barrister is now vowing to scalp the licence of Morley's firm.