The extraordindary saga of 2B Edgecumbe Street, Hamilton is not just another leaky home story.

A top real estate agent who sold her rental property to a Waikato pensioner without disclosing it had been a 'leaky home' has been banned from the industry for three months and fined $2500 for disgraceful conduct.

Corinna Mansell, who was general manager of the Remax chain, admitted the charge at a Real Estate Authority (REA) Disciplinary Tribunal hearing in Hamilton last month but her lawyer Matthew Ward-Johnson had argued she shouldn't lose her real estate licence because of her guilty plea and otherwise unblemished record. The tribunal said her behaviour was a "serious breach of acceptable standards".

Margaret 'Jean' Warburton, who bought the house, is outraged at the penalty, saying it was just one per cent of her own $250,000 loss on the property. Warburton said Mansell was the "biggest winner" from a "pathetic" system.

However, the Real Estate Authority said the verdict was a triumph and sent a "clear message" in a difficult, unique case in which the REA had worried it might not be able to secure any punishment at all.

READ MORE:

* The Big Leak: A leaky house, a $500,000 lawsuit, a secret witness and a pensioner who lost her life savings

* Real estate boss in leaky home drama leaves job

* Real estate boss faces 'disgraceful conduct' charge over leaky home sale

* Hamilton house which was subject of major lawsuit not leaky, owner says

Warburton bought the house, in the Hamilton suburb of Whitiora, from Mansell for $490,000 in 2015. When she began renovations, she discovered it had major weathertightness issues. It has sat empty ever since.

Stuff's three-part investigation, The Big Leak, revealed how before the sale, Mansell had passed up five opportunities to disclose the house had been diagnosed as leaky, and undergone major repairs before she bought it. A vital report on the house's issues was also never passed on.

Warburton sued Mansell, builder Matt Carson, who had done the repairs, and a building inspector, Tony Bankier, who had given it a positive report. A settlement was eventually reached which involved Carson's parents buying the property. They recently tried to sell the house, but withdrew the listing after publicity about the home on Stuff.

Warburton said the only winners in the case were those who sold the house - Mansell, and her agents Cary Ralph and Andrew Gibson. Mansell was the "biggest winner ... who together with with her lawyer and our pathetic legal system was able to let the case drag on for several years, until she had run out of options, was backed into a corner and she had to finally admit her guilt and own up."

Mansell said the REA was "useless... just how 'disgraceful' does a real estate agent's conduct have to be before they will take serious action?"

Gibson, who helped sell the house but with Ralph, was cleared of knowing it was leaky, was equally dismayed. He compared the penalty to the case of Geoffrey Mairs, who had his real estate licence cancelled for sleeping at a vendor's house. "I guess we are gutted that after such a long and drawn-out disciplinary process, the result is no more than a damp squib. The agent who slept in a Mission Bay vendor's house was totally disqualified. Where is the balance in that?"

But REA chief executive Kevin Lampen-Smith said the cases weren't comparable, and he was pleased with the suspension, saying it was a "warning shot for the industry".

The REA's lawyer, Michael Hodge, had proposed a six-month ban for Mansell's "cavalier attitude", saying she had been well aware of what she should have disclosed. Lampen-Smith said there was a high bar to securing any suspension. "Not many cases have ended with a cancellation," he said. "Just getting any suspension is actually quite difficult ... most tribunals set a high bar before they will suspend someone's livelihood."

Lampen-Smith said their regulatory system wasn't designed for the unusual circumstance of prosecuting an agent for their actions as a vendor, and they had even considered dropping proceedings because of its complexity. "I'm glad we chose to keep going with it - not every regulator would, some would have given up halfway through and said 'this is outside our jurisdiction'. But we have kept up with it because of the connection between a real estate agent's behaviour and upholding professionalism in industry."

The case showed agents could be held liable to misconduct outside their working hours, he said. It also exposed a gap in the law which meant there was "very little legal risk" for vendors who didn't disclose problems with their homes when selling.

The REA's own Complaints Assessment Committee (CAC) had decided Mansell had a case to answer and referred it to the tribunal, which is independent of the REA. The CAC cleared Gibson and Ralph of any wrongdoing, a decision which angered Warburton.

The tribunal accepted Mansell's claim that she had arranged for the vital report to be posted to the two agents. However, her lawyer, Ward-Johnson, also said her reason for not disclosing it was her belief that the issues it identified had been fixed. But the listing agents never received the report, and said it was never mentioned to them at any time. It wasn't mentioned on listings forms or the sale and purchase agreement.

Ward-Johnson said Mansell had "engaged proactively" in the settlement, voluntarily stood down as an agent in March 2018, had pleaded guilty, and co-operated with the REA's investigation. He also said she should be given credit for not commenting to Stuff, "being conscious not to air the dispute publicly, to the detriment of the industry". He proposed a fine of $5000 to $7500.

The Tribunal had the power to cancel Mansell's licence and order she pay Warburton compensation. In doing neither, it said it should "impose the least punitive penalty ... appropriate" because rehabilitation was an important consideration and took into account her "long and unblemished record".

Mansell is now the general manager of REMAX's Flatbush branch in South Auckland and will be able to stay in that role during her ban. She did not respond to a request for comment.

Continue Reading

on Stuff

Featured