Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

April 7th - 2004

RECO Decisions

The following RECO Complaints, Compliance and Discipline Appeals decision has been condensed

The following RECO Complaints, Compliance and Discipline Appeals decision has been condensed and can be viewed in its entirety on the RECO website at www.reco.on.ca.

The Case
Salesperson A was employed by Selling Broker A and was approached by the buyers to assist them as a buyer agent to locate and purchase a home. Salesperson A explained agency relations but did not obtain a written acknowledgement from the buyers or a signed Buyer Agency Agreement.

Salesperson A showed properties to the buyers and eventually the buyers developed interest in a property that was listed by Salesperson A’s employer, Selling Broker A. The buyers did not acknowledge or consent to dual agency in this transaction.

The buyers made an offer to purchase the property with the following condition:

“…the purchaser arranging, at his own expense, a new mortgage for not more than ninety-five percent of the purchase price…Unless the purchaser gives notice in writing delivered to the Vendor within five banking days from acceptance of this offer that this condition is fulfilled, then this offer shall be null and void…”

The offer was signed back and accepted by the buyers. However, when Salesperson A referred the buyers to a mortgage broker, it was discovered that the buyers could not obtain financing due to bad credit. In the meantime, the buyers’ son went to the property and viewed it. The buyers’ son advised the buyers that the shingles needed replacement. When the buyers told Salesperson A about the shingles, she informed the buyers that the necessary repairs would be made by the seller.

Salesperson A had the buyers sign a waiver of the condition of financing even though at this time, the financing or mortgage for the buyers had not been approved.

The buyers asked their son to co-sign for the mortgage, but he refused. The buyer’s immediately informed Salesperson A who advised the buyers that they had already waived the condition of financing and the offer was now binding.

Findings
Salesperson A was found to be in breach of Rules 2, 3, 4, and 23 of the RECO Code of Ethics. She acted in an unprofessional manner by:

  • Representing a client without explaining agency to them and obtaining a written acknowledgement of same.
  • Representing a client without entering into a written Buyer Agency Agreement with the client.
  • Representing a client in a dual agency situation without explaining dual agency and obtaining a written consent of the clients.
  • Having her client waive the financing condition before the client actually obtained a mortgage approval.

Penalties and costs
Salesperson A was ordered to pay a fine of $5,000.00 within 120 days of the decision of the Discipline Committee.

  • Costs of $1,200.00 payable within 30 days.
  • In addition to above penalties, Salesperson A must voluntarily enroll in the RECO Code of Ethics course and provide RECO with written proof of completion no later than 120 days from the date of the decision.

RECO CODE OF ETHICS

RULE 2 Primary duty to client
A Member shall endeavour to protect and promote the best interests of the Member's Client. This primary obligation does not relieve the Member of the responsibility of dealing fairly, honestly and with integrity with others involved in each Transaction.

RULE 3 Disclosure of Role
At the earliest practical opportunity, but no later than when the Member Accepts an Agency, a Member shall fully disclose in writing the role and nature of the service that the Member shall be providing to the Person. The Member shall also disclose the Member's role to others involved in the Transaction when appropriate.

RULE 4 Written Representation Agreements
A Member shall enter into a written Representation Agreement with a Client at the earliest practical opportunity, and in all cases before any Offer to Purchase is submitted.

RULE 23 Obedience to Law
A Member shall practice in accordance with all federal, territorial or provincial law or municipal by-law relevant to the Member's fitness to practice.

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