May 6th - 2012

RECO Decision: Early birds break the rules

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

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

THE FACTS
Rick and Mary wanted to buy a house and enlisted the help of Josh, a salesperson with Podar Realty. The sellers, Ted and Ida, were represented by Dana, a salesperson with Treko Realty.

Rick and Mary bought the house owned by Ted and Ida. Both parties agreed to the closing date in the Agreement of Purchase and Sale.

The buyer couple asked Josh to arrange for a final walk-through of the property the day before closing. Josh made an appointment and picked up the keys from Treko Realty two days before closing. 

Without the sellers’ knowledge, the buyers kept the keys. The day before closing, Ted stopped by his vacant house and discovered that the buyers had moved some tools into the garage. While he was contacting Dana to let her know, the buyers showed up with more of their belongings. They claimed that Josh had told them it was okay to move their possessions in early.

When Dana called to investigate, Josh alleged that the buyers’ lawyer had prematurely released the keys to the buyers. Josh asked Rick and Mary to return the keys to the seller. They complied, and the transaction closed the next day as planned.

According to the sellers’ complaint to RECO, the buyers had asked several times to store items at the house before closing, but the sellers refused all these requests. The sellers were not aware that Josh had picked up the keys before the scheduled walk-through; their neighbours saw Rick and Mary moving possessions into the house two days prior to the closing date.

In his response, Josh said he received a text message that the property was vacant and that he could pick up the keys early. He said Rick and Mary had asked him during the walk-through about storing tools in the garage because the property was vacant. In his statement to RECO, Josh said the buyers had told him their lawyer had already released the keys to them.  

In Dana’s statement to RECO, she said that after she was contacted about the early move-in, she called her brokerage and the receptionist said Josh had not returned the keys after the scheduled visit. In a sworn affidavit, the sellers’ lawyer denied authorizing an early release of the keys. 

Josh apologized to the sellers and then asked Rick and Mary to remove their possessions from the property. Ted and Ida allowed the buyers to leave those items that were already unloaded. The buyers agreed to pay $150 to the sellers as a gesture of apology and the transaction closed on schedule.

THE FINDINGS
The RECO panel determined that Josh acted unprofessionally when he failed to return the keys to the listing brokerage after the buyers’ scheduled walk-through, and when he allowed the buyers to keep the keys and move possessions in before closing and without the sellers’ consent.

The panel ruled that Josh breached the following sections of the REBBA 2002 Code of Ethics: (3) Fairness and honesty, etc.; (5) Conscientious and competent service, etc.; (38) Error, misrepresentation, fraud, etc. and (39) Unprofessional conduct, etc.

PENALTY
Josh was fined $4,000 and ordered to complete the Real Estate Institute of Canada’s Ethics and Business Practice course. The full case is dated 2011/04/26 and can be viewed at www.reco.on.ca. Look under “Complaints and Enforcement” and scroll down to “Discipline and Appeals Hearings and Decisions.” Choose the year 2011 and search by date only.

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Ontario Real Estate Association

Jean-Adrien Delicano

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416-445-9910 ext. 246

Ontario Real Estate Association
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