Property deals cost realty agent his job
Ex-employee faulted over $2.5m transactions, vendors refunded
Auckland’s biggest realty firm has dismissed an agent and refunded two vendors’ commissions after an employee was found guilty of misconduct for “fundamental” breaches of his professional obligations.
Former Barfoot & Thompson Papatoetoe agent Deepak Goyal is now awaiting penalty and looking for a new job following a finding by the Real Estate Agents Disciplinary Tribunal in connection with his 2015 purchase of neighbouring Pakuranga homes.
Goyal sold the Grassways Ave properties to developer Manjit Grewal in late 2014 for a combined total of $2.508 million, receiving commission on both transactions.
He later transferred nearly $200,000 to Grewal’s bank account, which investigators argued was to cover the deposits, before buying both properties himself through a nominee company, VAD Properties Ltd.
At a tribunal hearing in August, prosecutors argued Goyal’s actions constituted a serious conflict of interest and brought the industry into disrepute. The developer was a “front” for Goyal to purchase the development site, they argued, while sidestepping his professional obligations to both vendor clients.
Goyal had failed to disclose his financial interest or gain the required written consents. By earning commission on both sales he effectively bought the properties for a discount, prosecutors said. He ultimately developed the adjacent properties into an
eight-lot subdivision and named its access way Goyal Lane.
During the hearing, Goyal argued he did not originally intend to buy the properties, and only lent Grewal money because the developer had over-extended himself. Goyal said it was common in Indian culture to lend large amounts to acquaintances without formal documentation of the loans or agreed repayment plans.
He had only decided to buy the properties when it became obvious Grewal could not complete the transactions. He had not understood his disclosure obligations, arguing the two purchases had essentially been private transactions between him and Grewal after the original sales had gone unconditional.
Goyal’s lawyer, Tim Rea, said his client accepted he fell short of his professional obligations but blamed inexperience.
Rea further argued the vendors were not financially disadvantaged by Goyal’s actions, and his client was only guilty of unsatisfactory conduct.
However, prosecutor Michael Hodge said Goyal wilfully or recklessly breached his obligations by concealing his involvement in the purchases from his commissionpaying clients.
“He submitted that Mr Goyal did nothing whatsoever to bring his purchase of the properties to the vendors’ attention, or to identify and explain his conflicted position,” the tribunal decision says.
“He submitted that Mr Goyal was aware of, at least, the risk of a conflict of interest arising out of his loans to Mr Grewal, and his concern as to Mr Grewal’s inability to settle, but as he wanted to protect his investment, he went ahead anyway.”
The tribunal ruled Goyal downplayed his financial interest and involvement in the properties and breached consumer protection rules in the Real Estate Agents Act.
“Mr Goyal’s evidence of ‘ inexperience’ is considerably diminished by his evidence as to the number of his sales, and his significant success over a fairly short period of time,” the decision said. While Goyal’s actions were not considered deliberate, his failures “can only be described as seriously incompetent or seriously negligent real estate agency work”.
Goyal is now awaiting a tribunal penalty order, but his firm has already taken action.
Barfoot managing director Peter Thompson told the Herald the firm’s original clients were immediately refunded their commission as soon as the company learned what had happened.
“The company decided to terminate Deepak’s contract for services after reading the decision by REAA.”
The Herald has approached Goyal for comment.