Two real estate salespeople, and a supervisor, have been fined after necessary inquiries weren't made and disclosed to the purchasers of a property at "real risk" from potential asbestos. Photo / 123RF
Buyers of a lifestyle property have been left with a house they “can’t even live in“, can’t get insurance on, and have been told by the Waikato District Council needs to be pulled down.
Now, real estate professionals involved in the 2022 sale have been found to have engaged in “unsatisfactory conduct” – specifically around lack of disclosure about the state of the roof, and possible presence of asbestos, and misleading information about driveway access.
In a recent Real Estate Authority penalty ruling, the buyers said they cannot afford to build a new home and “paid for [a] property which is not ours due to the driveway [to the rear of the property] not being a shared driveway”.
They told the authority they’re living in a caravan on the front lawn.
The issues stemmed from the actions of two real estate salespeople and their supervisor, two of whom have been censured. All three have been hit with fines at varying amounts, to a combined sum of $21,000.
Two sets of complainants brought issues related to the sale to the Real Estate Authority – the purchasers, and the neighbours.
The neighbours share a boundary and, when they first saw the property had been listed for sale, they got in touch with the listing agency.
The authority noted it was obvious from the photographs on the advertisement that there would be “potential building issues given the age and condition of the house on the property”.
“There are a number of sheds on the property, which are referred to in the advertisement as being a selling point for the property,” the determination decision read.
The advertisement for the property said, “Access to this property is (sic) comes off the street with easy access on the private gravel driveway.
“A shared driveway next to the house provides access to the rear of the section and both of the sheds.”
The neighbours clarified with the agency that there was “no shared access, and that any access would not necessarily be granted and would be at their discretion”.
The information made its way to experienced salesperson Steven Mathis, who had listed the property.
However, it was his son, Scott Mathis, who was working for a different branch, but with his father’s guidance, who was directly involved in the sale of the property.
He had had only five months’ experience as a salesperson, and was supposed to be receiving formal supervision from an agent or branch manager in preparing sales and purchase agreements and giving advice to potential buyers.
His father was not an agent or branch manager.
Steven Mathis told the authority he passed on the information about the driveway access to his son.
However, the authority said Steven Mathis was “under an obligation to make that information explicitly clear to any potential purchaser”.
The information had not been recorded in writing in the property information.
The buyers only learned about the lack of access to the driveway after they moved in and were told by the neighbours, after they started trying to use it.
The authority’s penalty decision said Steven Mathis “expressly ignored the information given by the adjacent property owners that they were not granting any access to the property through their driveway”, and left the advertisement unchanged.
The neighbours also asked Steven Mathis if he had made potential buyers aware of the “lack of consent for the new garage”, and asked him if the condition of the roof would be disclosed to potential buyers, being “1950s fibre cement and highly likely to contain asbestos”.
They said his response was “that it was the buyers’ job to do their own due diligence”.
The authority referred to the “Property Description & Disclosure” document supplied by the vendor to Steven Mathis.
This included information about the likelihood of asbestos, given the age and materials of the property, and the presence of a “small leak” above the door.
Given there was a leak over the door, Steven Mathis should have sought more information as there was a “possibility that the asbestos had become disturbed, which created a real risk to the health of any potential purchaser”, the decision said.
Scott Mathis told the authority he pointed out to the purchasers that “he did not know what the roof was made of and said that given the age of the roof there was a possibility it could contain asbestos”.
The authority said this was not enough, and he was obliged to make his own inquiries “to ensure that [the purchasers] were informed of the potential defect and risk”.
While there were other complaints about a lack of disclosure regarding a septic tank, a fireplace, ongoing presence of a nearby transfer station, and the purchasers’ claim that they had been “verbally talked out of getting a builder’s report”, none of these were upheld.
The purchasers acknowledged they just “looked around the place” and didn’t undertake investigations in respect of the property before signing the contract.
“Neither [the purchasers] nor [Scott Mathis] provided the committee with any information about why the contract was signed on the same day as it was viewed by the complainants,” the decision said.
“There is no suggestion that there was any pressure put on them to do so by [Scott Mathis].”
Scott Mathis was fined $3000, and ordered to undertake additional training, specifically “Disclosure: obligations to your client and customer”.
The authority said he should have been aware his father was not qualified to supervise him, and insisted he was supervised by someone who was qualified – a branch manager or agent – as “being a more experienced salesperson does not allow you to supervise a newly qualified salesperson”.
The authority noted the education and courses he has undertaken since the conduct occurred. He was not censured.
Steven Mathis was found to be at “the high level of unsatisfactory conduct”, and with no mitigating factors, was fined $10,000, and censured.
Their supervisor, Pete Lissington, whose lack of necessary supervision the authority found led to “considerable harm” and was considered “high-level unsatisfactory conduct”, was also censured, and fined $8000.
He was ordered to do “Supervision: processes, planning and practice” training.
The matter has now been sent to the Real Estate Agents Disciplinary Tribunal to consider whether to make compensation orders.
None of the licensees wished to comment to NZME.
Hannah Bartlett is a Tauranga-based Open Justice reporter at NZME. She previously covered court and local government for the Nelson Mail, and before that was a radio reporter at Newstalk ZB.