June 9th - 2005

RECO DECISION: Play fair on the web

The following RECO Complaints, Compliance and Discipline decision has been condensed and can be viewed in its entirety in the Regulatory Activity, Discipline and Appeals section of the RECO web site

The following RECO Complaints, Compliance and Discipline decision has been condensed and can be viewed in its entirety in the Regulatory Activity, Discipline and Appeals section of the RECO web site at www.reco.on.ca. Also, a chart summarizing the RECO CCD decisions is posted under Legal Pamphlets on the MyOREA web site, available from www.orea.com.

THE CASE
Three complaints were filed against the registrant. The complaints were similar in nature and pertained to web sites. The registrant “reserved” or “bought” several domain names for his company with names that had nothing to do with his company’s name. The names he reserved related to his competitors’ companies names. The competitors complained that a member of the public searching these domain names that were similar and related to their companies’ names, but in fact belonged to the registrant, would be misled into thinking that their companies and his were related.

The competitors also complained that the registrant reserved the domain names hoping to divert traffic to his web site. Typing in any of the list of unrelated names led users to the registrant’s web site.

The RECO discipline panel found that the registrant purchased the web addresses to reserve names that his competitors may want to use, as a competitive edge against fellow members of the real estate community. RECO also determined that the registrant used the domain names to “point” users searching the web to his web site.

As such, the registrant was found to be in violation of Rules 1, 20 and 46 of the RECO Code of Ethics.

Rule 1(2) – A Member shall endeavour to protect the public from fraud, misrepresentation or unethical practice in connection with real estate Transactions.

Rule 1(5) – A Member shall deal fairly, honestly and with integrity with the public, other Members and third parties.

Rule 20 – A Member shall only practice using the Member’s name as registered with the Council.

Rule 46 – A Member shall not engage in an act or omission relevant to the practice of the profession that, having regard to all circumstances, would reasonably be regarded by Members or the public as disgraceful, dishonourable or unprofessional.

The registrant’s subsequent appeal of the discipline panel was dismissed.

THE PENALTY AND COSTS
The registrant was ordered to pay a fine of $5000 within 30 days of the decision of the discipline panel.

The registrant was also ordered to pay costs of the discipline hearing and costs of the appeal, totaling approximately $4000.

SIMILAR CASE
A comparable case where another registrant reserved domain names that were similar to the names of three of his competitors also resulted in that registrant being ordered to pay a penalty of $4000 and costs. RECO determined that the registrant in this case “acted in an unprofessional manner: By utilizing and promoting domain names confusingly similar to local registrants and electronically forwarding inquiries from these domain names to his company’s domain.”

In this second case, the RECO discipline panel found the registrant to also be in violation of Rule 21 of the RECO Code of Ethics, pertaining to advertising.

Rule 21 – A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for Properties and services, is not false, misleading or deceptive.

Furthermore, such behaviour could also be viewed as a possible breach of Article 18 of the CREA Code of Ethics (in particular as it relates to Interpretation 18-5) which state:

ARTICLE 18 – REALTORS shall ensure a true presentation in all advertising. Properties and services shall not be advertised without identifying the firm or, where applicable, the individual practitioner, in accordance with provincial licensing legislation.

Interpretation 18-5 A REALTOR shall not use as search engine keywords for his/her Internet web sites, the trade names or trade marks of any firm, franchise, board or organization other than those with which the REALTOR is affiliated or otherwise authorized in writing to use.

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416-445-9910 ext. 246

Ontario Real Estate Association
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