Real estate agent censured over commission
A case of "double commission jeopardy" has cost an Invercargill real estate agent his commission and earned him a censure from his industry's disciplinary tribunal.
Woodend resident Robert McLachlan decided to sell his home in January 2010 and signed a 90-day exclusive listing agreement with Graeme Hegan from MacPherson Realty.
Hegan brought a buyer onto the scene but their offer was still about $45,000 lower than what McLachlan was asking for when he cancelled agreement in May.
McLachlan then signed a new agreement with PGG Wrightson Real Estate. But when the house later sold to that same interested buyer, both Hegan and the Wrightson agent asked for their commission - just over $16,400 in Hegan's case.
An earlier Real Estate Agents Authority Complaints Assessment Committee decision found that the standard listing contract that McLachlan signed allowed Hegan to gain a commission on any sale to a buyer he introduced, even if he was no longer the contracted agent.
However, McLachlan appealed to the Real Estate Agents Disciplinary Tribunal which agreed with the point about the contract, but still found the agent guilty of unsatisfactory conduct.
McLachlan testified, via telephone from his new home in Iceland, that Hegan had never informed him of the possibility that he might still owe him commission under any circumstances.
"The appellant [McLachlan] insists that the licensee [Hegan] told him he was free to list the property with anyone, or sell it privately, without the licensee being entitled to any commission," said the decision.
"The appellant put it to the licensee that the appellant would like to pay him for his efforts to date [at the cancellation of the contract] and was very pleasantly surprised to find that no money was owing to the licensee at that point.
"The meeting terminated with the appellant being under the impression that he and his wife were free to sell the property to anyone without further obligation to the licensee.
"The possibility that an obligation could arise if anyone introduced by the licensee 'ended up purchasing at a later date', as the appellant put it, never occurred to the appellant."
Neither McLachlan nor Hegan told the PGG Wrightson agent about the existing buyer interest when the property contract changed hands.
That was seen as an unprofessional oversight by the tribunal, which said relaying such information was standard practice and would have avoided a "very stressful situation to all concerned".
For his part, Hegan told the tribunal he thought the difference between the asking price and offer was too great and that the buyers were no longer interested.
The tribunal said it could understand the agent's failure under the circumstances, but it emphasised that "real estate agents cannot be acting professionally if they place vendors in a situation of liability for double commission".
Hegan ended up pleading guilty and he was censured, forfeited his rights to any commission, and was fined $1000.
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