'Nothing more than burnt toast': Agent downplayed house fire to prospective buyer

A real estate agent accused of downplaying a serious house fire allegedly told a prospective buyer’s daughter there had been “a bit of smoke, but nothing more than burnt toast”. 

However, the fire, sparked by an overheating laptop left charging in the master bedroom, actually destroyed the room and blew out the windows, and the fire brigade was called. 

The house required a new roof, recarpeting, refurbishing of two bathrooms, relining, repainting and new curtains and blinds in the bedroom, according to a decision from the Real Estate Authority. 

The buyer complained to the authority that Barfoot and Thompson agent Philip Oldham had failed to adequately disclose the extent of the fire damage and subsequent remedial work before the sale. 

She alleged he never provided her with a statement prepared by the vendors about the fire and repairs, and downplayed what had occurred when discussing the property. 

But Oldham says he did tell the prospective buyer about the fire and denied withholding information about the property’s history. 

Two years after the fire, in preparation for the sale, the owners had drafted a statement describing the cause of the fire and the repairs, but said there was no structural damage. 

The statement said that “all fire-related concerns [had been] addressed and signed off by the fire chief”. 

Oldham, as the selling agent, and a second listing agent, whose name is suppressed, agreed that the statement would be provided to prospective buyers as part of the disclosure process. 

The buyer said she never received the statement and was not told how serious the fire was or the extent of the damage. 

She said if she’d known these things, she would never have bought the property. 

The woman told the complaints assessment committee that at the open home, the fire wasn’t disclosed. 

But at a second viewing, she said, when she asked if there were any issues she should know about, Oldham told her that while it was “hardly worth mentioning”, a charging laptop started sparking and was quickly extinguished with no damage. 

However, her daughter gave a slightly different account, saying Oldham did mention a smoking laptop at the first open home, but described it only as “a bit of smoke, but nothing more than burnt toast”. 

She says at no point was the word “fire” mentioned. 

Agent said he had no reason to withhold info 

However, the decision stated Oldham maintained he told the woman and her daughter about the fire at both the open home and the second visit. 

He said there was no advantage or reason for him to withhold the information. 

As part of the committee’s decision, it had to consider whether Oldham complied with his professional obligations in respect of the information he provided to the complainant about the property. 

In its substantive decision, the committee said there was no evidence that Oldham knowingly withheld information about defects at the property, or kept the vendor’s statement “hidden” as the buyer claimed. 

In issuing a finding of unsatisfactory conduct, the committee noted Oldham’s failure to pass on the vendor’s written statement about the fire to the prospective buyer, his failure to take reasonable steps to verify any information he did pass on, and his failure to recommend that the prospective buyer seek her own expert advice. 

It also dismissed two claims against the listing agent that she had failed to comply with her professional obligations in respect of the information they’d provided to Oldham and the complainant, saying there was no evidence to support these claims. 

The decision said it wasn’t necessary to decide whether disclosures were made during the first or second viewings. 

The committee also expressed concern at the vendor’s statement, saying it appeared to downplay the remedial work that was done. It was also critical of the lack of supporting documentation to corroborate the sign-off by the fire chief. 

It noted that a subsequent engineer’s report, obtained during the committee’s inquiry, found the fire had caused structural damage to the house. 

It was also critical of Oldham’s lack of record-keeping. 

“We observe that disputes arising from ‘he said/she said’ situations of this nature can be effectively avoided if there is a contemporaneous written record of all disclosures made to prospective purchasers,” the decision stated. 

“The Committee therefore reiterates that, as a matter of best practice and to uphold the integrity of their professional obligations, all disclosures should be made promptly.” 

Penalty 

In its penalty decision from May this year, the buyer sought $17,000 in damages, but stressed that it didn’t include the full cost of the remediation work. 

She claimed her investigations had shown that the house wasn’t structurally sound and that the remedial work was carried out without council consent, meaning there is no Code of Compliance certificate. 

But Oldham’s lawyers argued he did not intend to act dishonestly, intentionally, or for personal gain, and he didn’t set out to mislead the buyer. 

The committee noted the penalty orders process wasn’t an opportunity to re-examine or re-litigate the committee’s findings, and so it didn’t address the woman’s claims for damages. 

It fined Oldham $3500 and ordered that he undertake disclosure training. 

Finally, it ordered that the matter be referred to the Real Estate Agents Disciplinary Tribunal to consider whether compensation should be awarded. 

A statement from Barfoot & Thompson said it did not wish to comment, as the matter is still under consideration by the tribunal. 

Catherine Hutton is an Open Justice reporter, based in Wellington. She has worked as a journalist at the Waikato Times and RNZ. Most recently she was working as a media adviser at the Ministry of Justice.