Three real estate professionals in the Waikato region have been fined a combined total of $21,000 after failing to disclose significant issues with a lifestyle property, including a potential asbestos risk and misleading information about driveway access. The buyers of the property now live in a caravan on the lawn after the local council deemed the house uninhabitable and in need of demolition.
Key Takeaways
- Three real estate professionals, Steven Mathis, Scott Mathis, and Pete Lissington, were found guilty of "unsatisfactory conduct."
- They were collectively fined $21,000 for failing to disclose a potential asbestos risk and for advertising a private driveway as shared access.
- The buyers cannot insure the home, which the Waikato District Council has ordered to be torn down.
- The case highlights failures in agent due diligence and proper supervision of an inexperienced salesperson.
Agents Penalized After Sale Leaves Buyers Homeless
The Real Estate Authority (REA) has penalized two salespeople and their supervisor following a 2022 property sale that left the purchasers with a house they cannot live in. Experienced salesperson Steven Mathis, his son Scott Mathis (who had only five months of experience at the time), and supervisor Pete Lissington were all found to have engaged in unsatisfactory conduct.
According to the REA's penalty ruling, the buyers reported they are unable to afford to build a new home and are currently living in a caravan on the property. The issues stemmed from critical information that was not properly investigated or disclosed during the sales process.
A Purchase with Severe Consequences
The buyers told the authority they "paid for a property which is not ours due to the driveway... not being a shared driveway." The situation has left them unable to secure insurance for the dwelling, which authorities have now condemned.
Misleading Advertisement and Driveway Dispute
One of the primary complaints centered on the property's advertisement, which claimed access to sheds at the rear of the section was available via a shared driveway. The listing stated, "A shared driveway next to the house provides access to the rear of the section and both of the sheds."
However, this information was incorrect. The driveway in question belonged exclusively to the neighboring property. The neighbors contacted the listing agency to clarify that there was "no shared access" and that any use of their driveway would be at their discretion and not guaranteed.
Warning Signs Allegedly Ignored
The REA's decision noted that this crucial information was passed to Steven Mathis. Despite receiving this correction, the advertisement remained unchanged. The ruling stated that Steven Mathis "expressly ignored the information given by the adjacent property owners that they were not granting any access to the property through their driveway."
The buyers were unaware of the access issue until after they moved in and were confronted by the neighbors when they attempted to use the driveway. This lack of legal access significantly impacted the property's value and utility.
Inexperienced Agent Supervision Failure
Scott Mathis, the junior salesperson who handled the sale, was being guided by his father, Steven Mathis. However, Steven was not a qualified agent or branch manager and therefore was not permitted to provide formal supervision. The REA found that Scott Mathis should have insisted on being supervised by a qualified manager, and that supervisor Pete Lissington failed to provide the necessary oversight, which contributed to the "considerable harm" caused.
Undisclosed Asbestos and Health Risks
A second major failure related to the condition of the house's roof. The vendor's disclosure documents, provided to Steven Mathis, indicated the potential presence of asbestos, which is common in 1950s-era fiber cement materials used in the roof. The document also mentioned a "small leak" above a door.
The REA determined that the presence of a leak should have prompted Steven Mathis to seek more information. A leak could mean the asbestos-containing material was disturbed, creating a "real risk to the health of any potential purchaser."
The neighbors reported asking Steven Mathis if the roof's condition would be disclosed, to which he allegedly responded that "it was the buyers’ job to do their own due diligence.”
Scott Mathis claimed he verbally told the buyers that he didn't know what the roof was made of but that it could contain asbestos due to its age. The authority found this was insufficient, stating he was obligated to make his own inquiries to ensure the buyers were fully informed of the potential defect and health risk.
Penalties and Further Action
The Real Estate Authority handed down significant penalties to the three individuals involved, reflecting the severity of the conduct and the harm caused to the buyers.
- Steven Mathis: Fined $10,000 and censured. His actions were classified as being at the "high level of unsatisfactory conduct."
- Pete Lissington: Fined $8,000 and censured for his "high-level unsatisfactory conduct" regarding his failure to supervise. He was also ordered to undergo further training.
- Scott Mathis: Fined $3,000 and ordered to complete additional training on disclosure obligations. He was not censured, with the REA noting the educational courses he has taken since the incident.
The REA did not uphold other complaints from the purchasers regarding a septic tank, a fireplace, and an allegation they were verbally discouraged from getting a builder's report. The purchasers acknowledged they signed the contract on the same day they viewed the property without conducting their own investigations.
The case has now been referred to the Real Estate Agents Disciplinary Tribunal, which has the authority to consider ordering compensation for the buyers. None of the licensees provided a comment on the matter when approached.
