Make sure real estate agents have a valid listing agreement

By | April 29, 2013

Real estate agents marketing and/or advertising a property need to ensure they have a valid listing agreement. A recent case (See Footnote 4) tested the boundaries of rule 9.15 of the Real Estate Agents Act (Professional Conduct and Customer Care) Rules 2009, where a real estate agent (Mr Pollett) had been found to be advertising and/or marketing a property without a valid listing agreement. The case was an appeal to the Real Estate Agents Disciplinary Tribunal from a decision of the Complaints Assessment Committee.

The situation: Under the direction of his supervisor (Mr McCarthy), Mr Pollett showed prospective clients through properties without agency agreements being in place. Mr McCarthy had either indicated that there was a listing agreement in place or told Mr Pollett that a listing agreement would be finalised if clients made an offer on the property.

There was a further scenario in which a property continued to be advertised on a real estate marketing website after the listing agreement had expired. Mr Pollett was responsible for the advertisement, however, he claimed to have asked both marketing and administration management to remove the advertisement as he did not have the ability to do so.

The decision: The Tribunal agreed with the Committee that on a strict interpretation of the legislation, Mr Pollett’s conduct could be considered unsatisfactory. However, Mr Pollett could have reasonably concluded that there was a listing agreement in place which allowed him to show the property in question. The Tribunal overturned the earlier decision. The Tribunal, however, went on to explain that Mr McCarthy should have ensured listing agreements were arranged (as Mr Pollett largely relied on him as his supervisor). Furthermore, the Tribunal went on to agree that Mr Pollett’s supervisors should have taken actions to remove the property advertised on the website before the expiry of the listing agreement.

Property buyers and sellers need to be sure their real estate agents tick every procedural box. Real estate agents must also acknowledge that a high level of conduct is expected of them and their supervisors and managers.

Footnote 4 = Pollett v The Real Estate Agents Authority [2013] NZREADT 4

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Copyright, NZ LAW Limited. Editor: Adrienne Olsen. E-mail: Ph: 029 286 3650.

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