Real estate agent fined $5000 for not revealing apartment block’s ‘serious defects’

Real estate agent fined $5000 for not revealing apartment block's 'serious defects'


A real estate agent who sold a Napier apartment in a complex with “serious defects” has been fined $5000 for failing to tell the buyers the full extent of problems with the building.

The agent, Marlene Nathan, was also found to have had a conflict of interest because she owned a unit in the building.

She is appealing against the findings, made by a Real Estate Agents Authority complaints assessment committee.

Nathan sold an apartment to a married couple in 2014, according to the committee’s written decision.

She lived in an apartment directly under theirs and told them ahead of the sale that there was a “relatively minor” noise issue in the top-level apartments during high winds, but it was under control and did not affect the unit they were buying.

But the buyers told the committee that, after they moved into the apartment, they became aware of a report undertaken for the complex’s body corporate that raised a number of issues with the building, including its fire rating, water entering the car park and basement, and vermin problems.

They told the committee they considered they had “become victims in what has been a major cover-up…”, and said their lives had been “a living hell” for the past two years. A large portion of their life savings was at risk as a result of the property purchase.

Real estate agent fined $5000 for not revealing apartment block's 'serious defects'

The apartments in Humber St, Ahuriri, Napier.

The Humber St complex, in Ahuriri, is one of two large apartment blocks in the suburb embroiled in a “leaky building” High Court claim involving Napier City Council.

The council said last year that, while it had included a $10.5 million contingent liability for the claim on its books, it planned to defend the claim and it “is not considered likely that this liability will materialise”.

In its decision, the committee said that, in failing to disclose the extent of the problems that were known about the property at the time of the sale, and by “downplaying the issues that were known about the complex”, Nathan had fallen short of the standards expected of a licensed real estate agent.

Nathan said she was appealing against the decision, but declined to comment further.

According to the decision, she and her husband bought their apartment in the complex in 2005 and lived there from 2009 until they sold it in 2015.

She told the committee the body corporate did not advise her of building issues and she did not have a copy of a 2010 consultant’s report that originally identified problems with the complex.

At the time she moved in, her husband was working for the developer of the complex. The body corporate was “not forthcoming with information” and was “very secretive”. She believed that was “because it didn’t want information being relayed back to the developer about what it was doing in respect of defects at the complex”, the decision said.

But the committee, which described the building as having “serious defects”, said it was not unreasonable for the buyers to expect Nathan to be well informed about relevant issues with the building, and to inform them.

It said there was also a risk that, as a property owner in the complex herself, her judgment could have been affected because disclosure of serious defects would have a detrimental effect on the value of her apartment.

The buyers who complained about Nathan did not respond to a request for comment.

This article originally appeared on on June 27, 2017 and was written by Simon Hendery


< Back to Blog           DIY Home >