Three Bayleys agents fined $5500 after $551k loss claimed on leasehold deal

Real Estate Authority penalty decision out against Bayleys agents. Photo / file

Three Bayleys agents, including the firm's national compliance manager, have been fined a collective $5500 for unsatisfactory conduct after the sale of a Viaduct Harbour unit, carparks and storage lockers.

A Real Estate Authority complaints assessment committee decision said Tony Michael Bayley - the firm's licensing and compliance chief - was fined $1500, while fellow agents Phillip Haydock and John Alan Haydock were each fined $2000.

At issue was the agents' sale of a leasehold property and the claim that the vendor thought it was an unrelated company buying her places when in fact it was the landowner.

The complainant told the Herald today that Bayley and Alan Haydock sold her 40sq m apartment at The Sebel Auckland Viaduct Harbour, 85 Customs St West. That included a far more valuable 16 carparks and 10 storage units. The property was not identified in the decision.

Her assets were on land owned by Viaduct Harbour Holdings.

Asked for comment about the case and penalty decision today, a Bayley's spokesman indicated the business would try harder in future.

"Bayleys' group licensee and Bayley corporation agency compliance manager Tony Bayley said the company accepted the authority's decision and was looking at ways of improving its performance to ensure such a scenario did not arise again," the spokesman said.

The decision said that after a marketing and tender process carried out Alan Haydock and Tony Bayley, she agreed to sell her properties to a company. But two weeks later, that company nominated another as the buyer. That buyer was the owner of the underlying freehold land, the decision said.

The allegation was listing agents Alan Haydock and Tony Bayley knew one company acted on behalf of the other but either failed to tell her or gave misleading information to hide facts.

The complainant wanted the licensees to be fined $10,000 and to make an apology and she said the outcome of the deal gave benefits to Alan Haydock and Tony Bayley in their ongoing business dealings with the ultimate buyer.

But in their defence, the men said all the breaches of the Real Estate Agents Act were minor and the penalty should be limited to a censure.

The complainant said the ground rent was likely to increase 300 per cent in the next rent review although the authority said that was unsubstantiated and not supported by other rent reviews in the area.

The decision said the complainant said she had suffered a $551,431 loss. That was from the loss in the sale price of $465,000, $49,000 paid in commission, $18,600 paid in legal fees and $18,000 in personal time involved in seeking information, explanations and investigating the matter for the complaint.

The complaint against Phillip Haydock was that he failed to adequately or fairly deal with or investigate concerns against the two agents and that he withheld information requested by the complainant. Phillip Haydock said that when he got the complaint, he undertook a thorough and fair investigation.

The authority said Alan Haydock had breached his fiduciary obligations and incorrectly claimed that information about payment of a deposit belonged only to the purchaser and he would not release the information.

The complaint said he failed to put a buyer's email - confirming the deposit had been paid - on the transaction file.

Alan Haydock and Tony Bayley failed to report on a prospective purchaser's interest, the decision said. Further, they released confidential information to a successful tenderer - relying on a confidentiality agreement which had not been signed by the complainant, she said.

In the penalty decision hearing, Alan Haydock and Tony Bayley said the eventual buyer's identity was made known in week four and not week three for "purely administrative reasons". This did not affect the transaction, they said.

Phillip Haydock said the two licensees were both experienced and had no prior findings against them and the sale achieved was at the upper end of their initial estimate.

The penalty decision noted the men's right to appeal. It said Phillip Haydock's conduct was in the lower range of unsatisfactory.