Reference no: EM133813458

Questions

1. What has the salesperson done wrong? Explain what the salesperson has done that could be cause for Rules of the Code or legislation to be breached.

2. What section of the Fair-Trading Act 1986 has been breached? If appropriate, what section of the Contract and Commercial Law Act 2017 would enable the customer to claim a remedy?

3. Identify three relevant rules from the Real Estate Agents Act (professional Conduct and Client Care) rules 2012 (the Code) that the salesperson has breached.

Scenario 1. I loved the townhouse in Tui Street and wanted to make an offer on it. There was another townhouse down the same driveway, so I would need to fence the property as I have a dog. When I discussed this with the salesperson, he said, 'This would be an easy section to fence, no problem at all.' I also told the salesperson that I was a little nervous to make an offer as I struggled to understand everything he was talking about and the documents he gave me looked very confusing. He also spoke very quickly and English is not my first language. The salesperson told me 'Everything will be okay, this is a standard sale and purchase agreement and the home is great, you will love it.' The salesperson did not recommend that I seek legal advice but, thankfully, I decided to get my lawyer to check the sale and purchase agreement before I signed it. The lawyer told me that the townhouse has a cross lease record of title and I would need permission from the owner of the other townhouse to put up a fence. If I purchased the home and couldn't fence it, I would not have been able to keep my dog at the property. I did not go ahead with the purchase and made a complaint to the salesperson's branch manager.

Scenario 2. After struggling to sell my property privately, I decided to put my home on the market with a real estate agency and wanted to choose a salesperson who was very experienced in marketing and selling lifestyle blocks in my area. Looking through the local paper I found a full-page advertisement showing photos of 10 sold properties. The advertisement text stated the following. '10 SOLD in the last four months! If you want your property added to my sold page, call now for an appraisal. As your 'lifestyle specialist' I will get you results.' I was delighted to see there was a local specialist who had sold 10 properties recently, all in my area. I phoned the salesperson and requested an appraisal. During the appraisal meeting with the salesperson, I asked her some questions relating to the properties she had recently sold. I was keen to see how similar they were to mine and how long they had been on the market. The salesperson did not appear to have any knowledge on the 10 sold properties and she had only been working as a salesperson for one month. The salesperson had not sold any property herself and the 10 properties being advertised as sold were all sold by other salespeople at her agency. Set A ver. 2.0 © The Open Polytechnic of New Zealand Ltd 4

Scenario 3. Henry and Alice had found their dream home. When they first viewed the property, the salesperson had indicated the shrub line as being the boundary and commented on the large lawn area within that boundary. The salesperson told Henry and Alice that the current owner had been planning to put in a swimming pool, as there was plenty of room, and pointed out that it was the sunniest spot in the garden. Henry and Alice were delighted to hear this and told the salesperson they also wanted to put a large swimming pool in and if the large lawn area was also the sunniest spot, then that sounded perfect! Henry and Alice purchased and moved into their new home. Three months later they engaged a pool company to start building their swimming pool. The pool company had the property boundary surveyed to ensure they could go as close to the boundary as possible. Henry and Alice were shocked to be told that the boundary was not where the shrub line was at all, but two metres inside it. This meant that they would not be able to have a large swimming pool there as planned. Henry and Alice were very disappointed and immediately made an appointment to speak with their lawyer about claiming compensation for not being able to put in a large pool as expected.

Scenario 4. I was looking for a home to buy for my elderly mother. She does not drive so it needed to be within walking distance to shops and amenities. I went to view a property that had been advertised in the local paper as: 'An easy stroll, just 5 minutes from the popular Northcity shopping centre.' When I arrived at the open home, I realised that the road and driveway were extremely steep and my mother would not be able to walk up either the road or driveway. In fact, it wasn't going to be an 'easy stroll' anywhere to or from that property. The home was situated at the end of a very steep driveway, up a steep hill and was at least fifteen minutes' walk to the shopping centre. Set A ver. 2.0 © The Open Polytechnic of New Zealand Ltd 5

Scenario 5. Taika and Mia were very excited to be purchasing a lifestyle property to expand their current business. They have been growing sunflowers and watermelons and had outgrown their current lifestyle block. Their budget was $1,250,000 and they saw a property for sale advertised on their local agency's website. The advertisement reads 'Buyer enquiry over $1,100,000,' Noting the price guide is within their budget they quickly phoned the salesperson Ben, to arrange a viewing. At the viewing Taika and Mia made it very clear to Ben that they were looking to purchase the lifestyle property to expand their watermelon business and would need to use the four large paddocks at the front of the property. Ben assured them the paddocks would be perfect for growing watermelons. The following morning Taika phoned Ben to make an offer of $1,200,000. Ben told Taika he would need to make the offer higher as the clients were looking for offers over $1,300,000. Taika and Mia were surprised by his comment as the price advertised said buyer enquiry over $1,100,000, so they were expecting they could make an offer of around $1,200,000. However, Taika and Mia did not want to miss out and really needed to purchase a large property so they could expand their business. They made an offer that evening for $1,300,000 and it was accepted. One week before Taika and Mia were due to move into the property, they were driving past when they noticed the four large paddocks were all completely under water. Whenever there was heavy rain, the paddocks flooded. The clients had previously informed the salesperson of this flooding issue on their property but the salesperson did not disclose this information to Taika and Mia. They were very upset to find the property was not going to work for them. A complaint was made and they requested the contract be cancelled.