Barfoot & Thompson Greenlane fined $7500 for failing to supervise realtors in $100k moisture case

Amy Chen (top) and Gloria Zeng were found guilty of unsatisfactory conduct by the Real Estate Authority in 2023. Photo / Supplied

A real estate agency has received a second fine for failing to properly supervise two realtors who waited until the sale of a property was final before disclosing a builder’s report that found $100,000 worth of moisture repairs could be needed.

The Real Estate Authority last year fined junior realtor Amy Chen $1000 for the oversight while a senior realtor who worked on the listing, Gloria Zeng, received a $3000 fine.

However, it was the pair’s employer, Barfoot & Thompson in Greenlane, Auckland that was stung with the biggest penalty of $7000 – as well as having its failure to supervise them escalated to the Real Estate Agents Disciplinary Tribunal.

The agency pleaded guilty to a charge of unsatisfactory conduct and this week the tribunal fined it a further $7500 following a hearing last month.

Barfoot & Thompson’s managing director Peter Thompson did not want to comment on the ruling but the agency was looking at its options to appeal.

At last month’s hearing, agency counsel Kim Burkhart said in submissions that Barfoot & Thompson admitted it had a gap in its system for how realtors, especially inexperienced ones such as Chen, should be supervised day-to-day.

Burkhart also submitted Chen, who had only been a realtor for six months, did not follow her training and inform her supervisor of the building report.

Instead, the agency assumed because Zeng had helped her junior colleague with the documentation everything was in order.

Burkhart said the incident was a one-off unexpected situation and the company had since revised its management and supervision policies.

According to the Real Estate Authority’s penalty ruling for the two realtors and the agency, the property had five areas where the moisture readings were between 40% to 80%

A moisture reading of 7 to 13% is considered normal for a house. However, where moisture readings exceed 20%, the risk of timber decay is high.

Despite the agents commissioning the report Chen did not read it and neither of them disclosed it to the buyers until after their offer went unconditional.

The purchasers discovered the existence of the report only when their bank requested one for finance purposes and Chen told her one had already been commissioned before the sale and sent it to them.

The REA claimed the lack of supervision at Barfoot & Thompson Greenlane was “systematic” and claimed a culture of supervision did not appear to have been emphasised or enforced by the agency, particularly regarding its more inexperienced employees.

The REA said in submissions the agency’s failure to properly supervise Chen was serious, especially given it was her first listing.

In a recently released ruling, the tribunal found the error likely arose from Chen not knowing whom she was to report to.

“Both Ms Chen and Ms Zeng made the mistaken assumption that their supervisor did not need to be informed of the report,” its ruling reads.

The tribunal agreed there was a “gap” in the system, but Barfoot & Thompson had since made concrete efforts to plug it and ensure the same issue did not happen again.

The tribunal disagreed with the authority’s claim the issue of supervision was systematic and said it saw no evidence of a pattern of unsatisfactory conduct among inexperienced employees at the agency.

Ultimately, it opted to fine the agency $7500 on top of the $7000 fine issued by the REA and issued it a censure.

REA chief executive Belinda Moffat said in a statement to NZME that under the Real Estate Agents Act realtors must be supervised properly.

“Supervision is a critical part of the regulatory system designed to prevent consumer harm in real estate transactions, to ensure work is performed competently, and to uphold high standards of conduct across the real estate profession.”

“The case serves as a reminder to the real estate sector of the importance of supervision, and the responsibility that each agency has to ensure effective supervision policies and practices are in place.”

Moffatt said the authority had detailed resources available to agencies to help them understand their obligations and was pleased to see in this case Barfoot & Thompson had revised its policies.

Jeremy Wilkinson is an Open Justice reporter based in Manawatū covering courts and justice issues with an interest in tribunals. He has been a journalist for nearly a decade and has worked for NZME since 2022.