July 1st - 2011

RECO Decision: Restaurant listing never posted into system

The following decision from RECO Discipline and Appeals Hearings has been condensed. All individual and corporate names have been changed.

The following decision from RECO Discipline and Appeals Hearings has been condensed. All individual and corporate names have been changed.

The facts
Mac owned a restaurant called Haute Dishes. He wanted to sell his business and enlisted the help of Ron, a salesperson with Abbe Brokerage. Ron drafted a listing agreement dated May 28 with a list price of $69,900 and an expiry on Sept. 1.

In Mac’s view, things didn’t go according to plan. After the listing expired, he wrote a letter to RECO about Ron’s conduct. The letter noted that several months had passed without any activity, and when the listing expired, Mac approached two other salespeople at another brokerage to list his business. When Mac spoke to the new pair, he learned that Haute Dishes had not appeared on the MLS® System during the period of the initial listing agreement. Mac attached a copy of the agreement to his letter.

RECO contacted Barry, the broker of record at Abbe Brokerage. Barry stated that Ron was a licensed assistant to Ernest, another broker with Abbe. Barry told RECO that his brokerage had no record of receiving the Haute Dishes listing. Ernest admitted that Ron had asked him about listing a restaurant but when Ernest said he was not interested, Ron said he would list it himself. Ernest said when he asked Ron about the status of the “proposed listing,” Ron told him no paperwork had been signed.

Ernest confirmed that Abbe Brokerage was not aware of the situation with Mac until it heard from RECO. Ron wrote to RECO with his side of the story. He noted that after he drafted the listing agreement, the seller, Mac, asked him to “hold off listing his property” and that the documents were never finalized. Ron also said that Mac never followed up with him afterwards, and that there were “no keys, no MLS®, no anything, and this was because [Mac] thought he might have a private buyer and didn’t want [Ron] to do anything until he could figure out whether he could sell it privately or not.” Ron stated that after that he had lost interest in listing the property and made his position clear to Mac.

However, Barry advised RECO that Abbe Brokerage never received a copy of the listing agreement, nor was there a trade file for the Haute Dishes property. Ernest added that he never saw an agreement or trade file. When the Registrar asked Ron to see Mac’s written instructions to withhold the listing, Ron was unable to produce instructions or a copy of the agreement.

The findings
The panel determined Ron acted unprofessionally when he entered into the listing agreement and failed to provide a copy of the listing agreement to the brokerage, and when he failed to list the property on the MLS® System and market it as Mac had requested and in accordance with the listing agreement. The RECO panel determined that Ron breached the following sections of the REBBA 2002 Code of Ethics: Section 4 – Best Interests; 5 – Conscientious and Competent Service, etc.; and 39 – Unprofessional Conduct, etc.

Penalty
Ron was ordered to pay a $4,000 fine and successfully complete the Real Estate Institute of Canada’s “Ethics and Business Practice” course. The full decision is dated 2011/02/24 and can be viewed at www.reco.on.ca. Click on “Complaints and Enforcement” and then on “Disciplines and Appeals Hearings and Decisions” and scroll down to recent decisions. Find the appropriate year and search by date.

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