Relationship breakups


Relationship break-ups
A recent Tribunal decision has highlighted the need for licensees to take extra care when acting for vendors who are going through a relationship split.
In Mayer v REAA, File & Barnes [2017] NZREADT 44, the licensee acted as sole agent for the complainant and his former partner on the sale of their home. At the time, the vendors were going through Family Court proceedings regarding the division of their relationship property.

The situation became complicated when the licensee was asked by the former partner’s solicitor to swear an affidavit regarding the marketing of the property for the purposes of the Family Court proceedings. The licensee did so. The affidavit was prepared by the former partner’s solicitor, and the complainant wasn’t provided with a copy of it or given the opportunity to approve it (or otherwise) before it was filed. 

The complainant subsequently complained about the licensee’s involvement in the Family Court proceedings on behalf of his former partner when the licensee had been engaged by both of them on a joint basis.

Breach of rules 5.1, 6.1, 6.2, 6.4 and 9.1
The Tribunal found that the licensee failed to meet his obligations under rule 5.1 (exercise skill care, competence and diligence at all times), rule 6.1 (comply with fiduciary obligations to his clients), rule 6.2 (act in good faith and deal with all parties engaged in a transaction), rule 6.4 (not withhold information that should by law or fairness be provided to a customer or client) and rule 9.1 (act in the best interests of a client).

Know who your client is
The licensee in this case was engaged by both the complainant and his former partner. He owed them equal obligations as their agent, and he lost sight of this when he became involved with the Family Court proceedings on behalf of just one of them. 

Be extra careful when acting for opposing parties
Acting as the selling agent for both sides of a relationship break-up brings with it the need to be absolutely scrupulous, to act with complete and patent impartiality and to ensure that both sides are aware of and approve every action before it is taken. Licensees should also ensure that they keep records of their actions and interactions with both parties.

Acting for a separating couple can be fraught, as each party may have conflicting priorities. This case is a good reminder of the need for agents and salespeople to be extra careful when in this situation so that they can achieve the best outcome for their clients as well as keep themselves safe. Further training on knowing who your client is will be included in the 2018 verifiable continuing education programme.