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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!

November 12th - 2010

RECO Case – The price is right

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 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 Code of Ethics including Sections 2, 4, 5, 17, 26 and 41.

A bank listed a property, 1-A Street, for $345,000 with Broker A of Brokerage A. At the instruction of the bank, Broker A was to hold all the offers until May 31st, when they would all be presented simultaneously.

On May 25th Consumer A entered into a Buyer Representation Agreement (BRA) with Brokerage A and its representative, Salesperson A.  According to the BRA, Brokerage A was to assist Consumer A in locating a single family residence.

On the same day, Salesperson A submitted an Offer on behalf of Consumer A to purchase 1-A Street for $356,000.00 with a closing date of June 9. This offer was irrevocable until May 31st. On May 30th, after having learned that a total of eight offers had been received for 1-A Street, Consumer A instructed Salesperson A to increase her offer to $360,600.00. Salesperson A submitted this second offer to Broker A.

On the morning of May 31st, the assistant to Lawyer A, the lawyer acting on behalf of the Bank, faxed Broker A an authorization to “disclose the contents of the highest offer to all of the persons making an offer” for 1-A Street. Individual A also asked that “any resubmissions be made to Broker A by 3:30” of that same day.

At approximately noon of that same day, Broker A contacted Salesperson A to tell her that while Consumer A’s second offer had been the highest one made, she had been authorized to disclose the contents of the offer to all those who had made competing offers. She also informed Salesperson A that any improved offers were to be submitted by no later than 3:30pm that same day.

Salesperson A contacted the Consumer A to inform her of the situation, but failed to advise her that she was capable of improving her offer a second time.

The property was sold to another buyer for $361,500.00 with a completion date of June 7 -- $900.00 more and two days earlier than Consumer A’s second offer.

THE FINDINGS
Broker A acted unprofessionally by disclosing the substance of a competing offer causing the brokerage that employed her to contravene the Code of Ethics; and in providing services to more than one party in respect of the same trade in real estate, she failed to confirm, in writing, at the earliest practicable opportunity, and before either the first or second offer had been made, that she had informed all parties involved of the nature of her relationship to each.

As well as the same offences as Broker A, Brokerage A also acted unprofessionally when it failed to ensure that every salesperson and broker the brokerage employed was carrying out their duties in compliance with the Code of Ethics.

Salesperson A acted unprofessionally when after learning that the second offer was being disclosed, and that her client could improve upon her offer even more, she failed to protect her client’s best interests, failed to provide conscientious service to her client, or in the alternative failed to demonstrate reasonable knowledge, skill, judgment and competence in providing those services, by not telling her client within a reasonable amount of time.

Nature of Relationship
17. If a registrant represents or provides services to more than one buyer or seller in respect of the same trade in real estate, the registrant shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all buyers and sellers involved in that trade of the nature of the registrant’s relationship to each buyer and seller.

Competing Offers
26. (1) If a brokerage that has a seller as a client receives a competing written offer, the brokerage shall disclose the number of competing offers to every person who is making one of the competing offers, but shall not disclose the substance of the competing offers.

Duty to Ensure Compliance
41. (1) A brokerage shall ensure that every salesperson and broker that the brokerage employs is carrying out their duties in compliance with this Regulation.

Brokers and Salespersons
2. (1) 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.

Best Interests
4. A registrant shall promote and protect the best interests of the registrant’s clients.

Conscientious and Competent Service, etc.
5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services.

PENALTIES
Broker A breached Sections 2(1) and 17 of the REBBA 2002 Code of Ethics and was ordered to pay a fine of $5,000.00.

Salesperson A breached Sections 4 and 5 of the REBBA 2002 Code of Ethics and was ordered to pay a fine of $7,000.00.

Brokerage A breached Sections 17, 26(1) and 41(1) of the REBBA 2002 Code of Ethics and was ordered to pay a fine of $2,000.00

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