May 5th - 2009

RECO decision: Get buyers consent for advertising

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
This case involves violations of the REBBA 2002 Code of Ethics including responsibilities of brokers and salespersons, fairness and honesty and advertising.

In May 2006 Buyer B1 and Buyer B2 (the “Buyers”), made an offer to purchase a property located at 1-B Street in City B. The buyers were represented by a Buyer Representative.

The property was listed by Brokerage A with Salesperson A and Salesperson B at $559,900.00. The buyers offered $530,000.00 and the offer was signed back at $545,000.00. The counter offer was accepted and the transaction was scheduled to complete on July 26, 2007. The transaction did in fact complete as scheduled.

However, a couple of weeks before the deal closed, Sales Representatives A and B advertised the sale both in the newspaper and online. The ad included specific details regarding the property including the list price, selling price, location, size of property, taxes and number of days on the market.

The advertisement also included the following details, “Steps to Location D, Location C, and Location E, this 3 bedroom stone and brick home has had many updates by the vendors, including converting it from oil to gas heat. The most unique feature of this house is the garage. The owners have finished it off and heated it to allow it to be used as a recreation room with slate and ceramic tile,” says listing agent Salesperson A.

“Also, it has great access to the street level which can provide mud room access for dogs or children and strollers. Main floor has foyer with hardwood floors, and hide-away powder room under stairs, living room with hardwood floors and newly installed wood burning fireplace, open concept dining room with double French doors and walk-out to deck, updated kitchen with granite counter tops, slate flooring and stainless steel appliances. On the second floor, large open hallway upstairs gives lots of light, 3 bedrooms with hardwood floors, 1 with built-in desk, new 4-piece bathroom. The basement is finished with recreation room with slate flooring, French doors and walk-out; office with above grade windows, 2-piece bathroom located off laundry room.”

The buyers complained to RECO that they did not give Salespersons A and B consent to publish the detailed information. In response to the complaint, Salesperson A explained his reason for not seeking the consent of the buyers. Despite the clear provisions of the Code of Ethics, Salesperson A stated that based on information from the FAQ section of the Privacy Compliance Section of the City B Real Estate Board, she was of the view that they only had to seek the consent of the sellers. They did seek the sellers consent before publishing the information.

The Findings
The RECO panel determined that the registrants acted in an unprofessional manner when they “published or otherwise advertised information that could be used to identify the property and the contents of the agreement relating to the conveyance of the property in the newspaper without the written consent of the parties to the transaction.”

Salespersons A and B therefore breached the following sections of the REBBA 2002 Code of Ethics:

Section 2(1) – Brokers and salespersons
A broker or salesperson shall not do or omit to do anything that causes the brokerage that employs the broker or salesperson to contravene this Regulation.

Section 3 – Fairness and Honesty
A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

Section 36(9) – Advertising
A registrant shall not include anything in an advertisement that could reasonably be used to determine any of the contents of an agreement that deals with the conveyance of an interest in real estate, including any provision of the agreement relating to the price, unless the parties to the agreement have consented in writing.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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