PHOTO: The fire began when a laptop reportedly overheated while charging in the master bedroom.
A New Zealand real estate agent has been censured and fined $3500 after the Real Estate Authority found he failed to properly disclose the extent of serious fire damage at a residential property.
Barfoot & Thompson agent Philip Oldham was found guilty of unsatisfactory conduct after a buyer complained that the history of a major bedroom fire—and the significant repairs that followed—had been downplayed during the sales process.
The Real Estate Authority’s Complaints Assessment Committee also ordered Oldham to complete additional disclosure training. The matter has been referred to the Real Estate Agents Disciplinary Tribunal to consider whether compensation should be awarded to the buyer.
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Laptop Fire Caused Significant Damage to the House
The fire began when a laptop reportedly overheated while charging in the master bedroom.
It was not a minor smoke incident.
According to the authority’s decision, the blaze destroyed the bedroom, blew out windows and required the attendance of the fire brigade.
Repairs to the property reportedly included:
- Replacement of the roof
- New carpeting
- Refurbishment of two bathrooms
- Relining and repainting
- Replacement curtains and blinds
- Significant remedial work in and around the bedroom
A later engineering report obtained during the authority’s investigation reportedly concluded that the fire had caused structural damage to the property.
That finding raised further concern because a statement prepared by the vendors had said there was no structural damage.
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Buyer Claimed Fire Was Described as Little More Than “Burnt Toast”
The purchaser alleged that the seriousness of the fire was not adequately disclosed before she bought the home.
Her daughter told the committee that Oldham referred to a smoking laptop and described the incident as involving “a bit of smoke, but nothing more than burnt toast”.
She said the word “fire” was not used during the conversation.
The buyer gave a slightly different version of events. She said that during a second viewing, after asking whether there were any issues she needed to know about, Oldham described the incident as hardly worth mentioning.
According to her account, she was told that a laptop had sparked while charging but had been quickly extinguished without causing damage.
The purchaser said she would not have bought the property had she understood the true scale of the fire and subsequent repair work.
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Vendor Statement Was Prepared but Not Provided
Two years after the fire, the owners prepared a written statement for the upcoming sale.
The statement outlined the cause of the fire and described the remedial work. It also said there had been no structural damage and that all fire-related concerns had been addressed and signed off by the fire chief.
Oldham and another listing agent, whose identity was suppressed, agreed that the statement would be provided to prospective buyers as part of the property disclosure process.
However, the successful purchaser said she never received it.
The Complaints Assessment Committee found Oldham failed to give the buyer the vendor’s written statement.
It also found he did not take reasonable steps to verify the information being passed on and did not advise the purchaser to obtain independent expert advice regarding the property.
Agent Denied Deliberately Withholding Information
Oldham maintained that he disclosed the fire to the buyer and her daughter during both the initial open home and the second viewing.
He argued there was no reason or advantage for him to conceal the information.
The committee did not find evidence that Oldham knowingly hid the property’s defects or deliberately kept the vendor’s statement from the purchaser.
However, an agent does not necessarily need to act dishonestly to breach professional obligations.
The committee concluded that Oldham’s handling of the disclosure was inadequate and amounted to unsatisfactory conduct.
It said he should have provided the written statement, verified the information he was communicating and recommended that the buyer seek appropriate independent advice.
Committee Criticised Vendor Statement
The authority also raised concerns about the wording of the vendor’s statement.
The committee said it appeared to minimise the extent of the remedial work completed after the fire.
It was also concerned that there was no supporting documentation confirming the claimed sign-off by the fire chief.
A subsequent engineer’s assessment obtained during the investigation reportedly found that the fire had caused structural damage, contradicting the information contained in the vendor statement.
The case highlights the risk of agents simply repeating information supplied by a vendor without obtaining supporting documents or recommending further professional investigation.
Poor Record-Keeping Contributed to the Dispute
Oldham’s lack of written records was also criticised.
The committee said disputes involving conflicting verbal accounts could often be avoided if agents created contemporaneous written records of disclosures made to prospective buyers.
Written disclosure records can establish:
- What information was provided
- When it was provided
- Which prospective buyers received it
- Whether supporting documents were supplied
- Whether independent legal, building or engineering advice was recommended
The committee reiterated that disclosures should be made promptly and clearly as part of maintaining professional standards and public confidence in the real estate industry.
Buyer Sought $17,000 in Damages
During the penalty process, the purchaser sought $17,000 in damages.
She said that figure did not represent the entire cost of the alleged remediation required.
The buyer also claimed her investigations indicated that the house was not structurally sound and that some remedial work may have been completed without council consent or a Code Compliance Certificate.
However, the committee said the penalty stage was not an opportunity to reopen or re-litigate its original findings.
It therefore did not determine the buyer’s damages claim.
Instead, the matter was referred to the Real Estate Agents Disciplinary Tribunal, which may consider whether compensation should be awarded.
Philip Oldham Fined and Ordered to Complete Disclosure Training
The Complaints Assessment Committee imposed the following penalties:
- A formal censure
- A $3500 fine
- Mandatory disclosure training
- Referral to the Real Estate Agents Disciplinary Tribunal for possible compensation
Oldham’s lawyers argued that he had not acted dishonestly, intentionally or for personal gain.
They said he did not set out to mislead the purchaser.
The committee nevertheless determined that the failures were serious enough to justify a financial penalty and additional professional training.
Barfoot & Thompson said it did not wish to comment while the matter remained under consideration by the tribunal.
What New Zealand Real Estate Agents Can Learn From the Decision
This case delivers a clear warning to real estate agents, vendors and property buyers across New Zealand.
A major historical event affecting a property should not be casually summarised or communicated only through informal conversation.
Where a property has experienced fire, flooding, structural movement, contamination, unconsented work or significant repairs, agents should ensure that relevant information is disclosed clearly and supported by available documentation.
Agents should also avoid making reassuring statements unless those statements have been properly verified.
If there is uncertainty, the safest approach is to provide all relevant information and recommend that the purchaser obtain independent legal, building, engineering or council advice.
Buyers Should Complete Independent Due Diligence
Although licensed real estate agents have professional disclosure obligations, purchasers should still conduct their own due diligence before committing to a property.
Depending on the property’s history, this may include obtaining:
- A builder’s report
- An engineer’s assessment
- A LIM report
- Council property records
- Building consent documentation
- Code Compliance Certificates
- Insurance information
- Legal advice regarding the sale and purchase agreement
Historic fire damage can affect structural integrity, insurance availability, future resale and the cost of ongoing repairs.
A brief verbal explanation should never replace proper documentation and professional assessment.
Property Disclosure Remains a Critical Issue in New Zealand Real Estate
The Oldham decision demonstrates how quickly a property transaction can become a prolonged regulatory and legal dispute when important information is not disclosed clearly.
Even where there is no finding of deliberate dishonesty, an agent may still face disciplinary action for failing to communicate information properly, verify vendor claims or recommend independent advice.
For New Zealand real estate professionals, the lesson is straightforward:
Disclose material information early, provide it in writing and keep accurate records.
For buyers, the message is equally important:
Ask questions, request supporting documents and complete independent due diligence before purchasing a property with a history of significant damage or repairs.
SOURCE: NZHERALD