Real Estate Trader And Agent Both Fined

Real Estate Trader And Agent Both Fined For Misleading Claims

The true cost of making claims based on misleading information can often be more than a court fine warns Commerce Commission Director of Fair Trading Deborah Battell.

The warning comes after Judge Murray Abbott fined real estate agent Meta Dwyer and trader Grenadier Real Estate, $1,500 each in the Christchurch District Court for breaching the Fair Trading Act by making misleading claims in a promotional leaflet.

In January 2001, Dwyer distributed 965 promotional leaflets which created the impression she was responsible for the sale of a Cannon Hill property in the Christchurch’s St Andrews Hill area. Dwyer was not in fact the selling agent and the sale could not be attributed to her in any way. In addition, at the time the leaflets were distributed, the property was subject to a conditional offer and had not in fact been sold.

Ms Battell said it was difficult to put a true cost of such actions against the potential damage to the credibility of an agent or trader.

“We accept that agents need to build their own profile, especially in what is an extremely competitive industry,” said Ms Battell.

“An agent’s profile must, however, be built on accurate representations about their success. Dwyer’s actions had the potential not only to damage her own reputation but that of Grenadier. It is important that real estate companies develop good systems to keep control of the actions of their agents.”
In his sentencing, Judge Abbott said: “the leaflet clearly intended to convey the impression that Dwyer was responsible for the sale of four properties. It was difficult to see how the agent could have believed she was entitled to some credit for the sale. The sale of the property had nothing whatever to do with Dwyer.”

Ms Battell said this case was a timely reminder to traders and agents of the shared responsibility.

Grenadier claimed its principals had not seen the advertisement prior to publication, however Judge Abbott said that nevertheless “a principal is vicariously liable”.

“Grenadier was responsible for their agents’ actions even though it did not arrange or authorise the leaflets produced by Dwyer,” said Ms Battell.

Ms Battell added that Dwyer’s actions had the potential to cause significant consumer and trader detriment. “Dwyer’s claim that the house had been sold when that was not the case could have jeopardised interest shown by potential buyers. The leaflets also left a clear impression of her success as an agent, at the expense of other agents who operate in the area.”

Background
Dwyer is an agent who worked for Grenadier, which operates a Harcourts franchise in Christchurch’s Ferrymead area, trading as Harcourts Oceanside.

During 2000, Dwyer had been appointed as the agent by Harcourts Oceanside to sell the Cannon Hill property. By November 2000, the vendors were unhappy by the lack of interest shown in the property, and cancelled their contract with Harcourts Oceanside.

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