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Agent found guilty over misleading commission costs

Wednesday 28th of April 2010

A Complaints Assessment Committee (CAC), appointed by the Real Estate Agents Authority (REAA) found Lawrence Lalit Naidu of Sega Realty in Manukau guilty of misconduct after there was a discrepancy between the commission fee he told a vendor would be payable on sale and what was ultimately charged by the company in October 2009.

The complaint was laid in December after the vendor was charged $5,287 more than she was led to believe from the oral agreement when she first signed up her house listing.

REAA chair Kristy McDonald said the CAC found Maidu's  failure to adequately and accurately explain the commission that would be charged to the complainant and her husband fell short of the standard expected from a "reasonably competent licensee".

However, the CAC was not able to impose any penalties against Naidu because the conduct occurred before the Real Estate Agents Act 2008 came into force on November 17 ,2009. Under the 1976 act, not penalties could be imposed against a salesperson for the equivalent unsatisfactory conduct.

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Latest Comments
FMA outlines its latest expectations for advisers
Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
16 hours ago Steve Wright
FMA outlines its latest expectations for advisers
Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
18 hours ago Backstage
FMA outlines its latest expectations for advisers
All things said are great aspirational goals for a great financial advice industry, it mirrors what both the legislation and the code requires. However, like most things discussed it talks about what's expected not how it's done. The hardest aspect of financial advice today isn't what it is, it is how it is done. The how only comes from those that have done it, the how is only provided with examples. Guidance documents that spell out what's required along side how it it done. We’re still dealing with the same issues we started with in 2021, figuring out the how. And figuring out the how in every advice business is consuming resources that could easily be shortcut by the FMA demonstrating what they are expecting. It's not about “do it this way” its about this is the sorts of things we’re looking for. In the absence of standards and expectations, guesswork prevails. That represents significant risk to FAPs and the result is onerous overcooked advice processes for multiple advice operations and undercooked she’ll be right for single operators focused on getting the work done. Both approaches have potential for harm and as its been said earlier, leaves advisers open to explain they haven't been speeding with the authorities have pulled them over. The advice industry needs guidance on the how we know the what already.
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2 days ago Jon-Paul Hale
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To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
3 days ago Paul Flood