PHOTO: Amy Chen (top) and Gloria Zeng were found guilty of unsatisfactory conduct by the Real Estate Authority. Photo / Supplied
Two real estate agents, known as Jing Chen (Amy Chen) and Dequn Zeng (Gloria Zeng), who were associated with Barfoot & Thompson when they facilitated the sale of a house in Auckland in 2020, have been found guilty of withholding critical information about the property’s condition. The withheld information pertained to a building report that revealed excessive moisture levels in several areas of the house, with repair costs estimated at around $100,000.
Typically, a moisture reading between 7 and 13 percent is considered normal for a house. However, the property in question had moisture readings ranging from 40 to 80 percent in five different areas, signifying a high risk of timber decay.
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The realtors did not disclose this concerning information to the buyers until the sale became unconditional in November of the same year, even though they had commissioned the building report earlier in the process. The buyers only discovered the report’s existence when their bank requested it for financing purposes, and Chen provided it to them at that time.
Subsequently, the buyers filed a complaint with the Real Estate Authority, alleging that Chen and Zeng had knowledge of the property’s weather-tightness issues but chose not to disclose them. They argued that had they seen the report earlier, they would likely not have purchased the property. A subsequent report confirmed significant water ingress issues, primarily in the downstairs bedrooms and upstairs dining area, with estimated repair costs initially at $50,000 but later nearly doubling after receiving additional builder quotes.
In late the preceding year, the Real Estate Authority ruled that both agents were guilty of unsatisfactory conduct. In a decision released on Friday, they imposed fines, with Chen receiving a $1,000 fine, Zeng, the senior agent, receiving a $3,000 fine, and Barfoot & Thompson in Greenlane being fined $7,000 for failing to provide adequate supervision.
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During a hearing held the previous year, Chen admitted that she hadn’t thoroughly studied the technical terms in the 41-page report and hadn’t paid much attention to other sections. She had asked Zeng whether they should distribute the report at open homes, and Zeng allegedly advised her that they only needed to provide it to individuals who specifically requested it.
The Real Estate Authority acknowledged that Chen lacked construction and technical knowledge but emphasized that the moisture table in the report was not a technical term, and Chen should have recognized its importance.
In contrast, Zeng, a more experienced realtor with approximately seven months of experience, claimed she had not read the builder’s report until after the sale had gone unconditional. The authority determined that both agents had failed in their duty to disclose material information that could have influenced the sale. Merely not reading the report or only reviewing the general summary was deemed insufficient.
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The authority highlighted that a simple examination of the report would have indicated that half of the rooms tested had higher-than-expected moisture readings, indicating dampness and the need for further investigation. This should have been a red flag for potential problems with the property, prompting competent licensees to take appropriate action.
Additionally, the authority found that Barfoot & Thompson’s supervision of Chen and Zeng was insufficient and constituted unsatisfactory conduct. This aspect has been referred to the Real Estate Agents Disciplinary Tribunal for handling more serious complaints.
In its penalty decision issued on Friday, the authority noted that Chen lacked supervision, particularly considering her six months of experience and her first full listing. However, they distinguished this from Zeng’s situation, as she had more experience and should have recognized her duty to review a builder’s report.
Neither Chen nor Zeng provided comments for this article, and Barfoot & Thompson’s managing director, Peter Thompson, refrained from commenting due to the ongoing appeal process regarding the authority’s decision.
SOURCE: NZHERALD