March 22nd - 2015

RECO: Agreement to lease doesn’t show that tenant would rent to students

In this RECO decision, the registrant was disciplined after the owner of a property discovered that her property had been turned into a rooming house for students.

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In this RECO decision, the registrant was disciplined after the owner of a property discovered that her property had been turned into a rooming house for students.

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

THE FACTS

Jennifer was the owner and landlord of a property. She listed it for lease with Mike of Realty Plus. Another REALTOR® at a different brokerage, Roy, of Tops Realty, scheduled a showing to Sid, his purported client. Roy then faxed the lease documents to Mike, including a rental application and Agreement to Lease. All documents showed Sid as the tenant.

Roy explained to Mike that Sid worked at a language school with his business partner, Dave, and that Sid needed a large house to accommodate his family.  The rental application indicated that Sid would be the occupant, along with Sid’s relatives.  It also stated that Dave was Sid’s work supervisor. Mike then called Dave to confirm details of Sid’s employment.

An Agreement to Lease was reached. Afterward, the keys to the property were given to Dave in the presence of Jennifer, Mike and Roy.  During the meeting, Jennifer asked Dave for his driver’s license.  Dave handed her Sid’s license.  

Several months later, Jennifer checked on the condition of her rental property and discovered it had been turned into a rooming house for students.  Upset, she asked to speak to Sid, who soon arrived and demanded that Jennifer leave the property.

Several months later, Jennifer checked on the condition of her rental property and discovered it had been turned into a rooming house for students.  Upset, she asked to speak to Sid, who soon arrived and demanded that Jennifer leave the property. Jennifer did not recognize Sid and asked him for identification. Dave and Roy then arrived and also demanded that she leave. Jennifer then realized that Dave had presented himself as Sid during the meeting when the keys were handed over.

Jennifer filed a complaint with RECO. In his interview by a RECO inspector, Roy indicated that Sid was shown as the tenant and that Sid had signed the Agreement to Lease. Roy had obtained a driver’s license as identification and credit report. 

Roy told the inspector that he knew the property was to be rented to students.  Roy said that when he forwarded the Agreement to Lease to Mike, he informed him by phone that several students would be using the property, but he did not put that in writing.

The inspector then interviewed Mike, who said that he did not know the property was to be used for student housing.  Mike had asked Dave whether Sid intended to rent to students since he worked at a school. Dave replied that the place would only be used by Sid’s family and that if Sid rented it to students, he would fire him. 

THE FINDINGS

The RECO panel determined that Roy acted unprofessionally when he failed to indicate on the Agreement to Lease that the tenant intended to rent the property to students. The panel ruled that Roy breached the following sections of the REBBA 2002 code of ethics:  (3) Fairness and honesty, etc.; (27) (1) (a) Written and legible agreements; and (39) Unprofessional conduct, etc.

THE PENALTY

Roy was fined $9,000 and ordered to complete the Real Estate Institute of Canada (REIC) Ethics and Business Practice course.  The full case can be seen at www.reco.on.ca.  Look under “Complaints and Enforcement” and select “Discipline & appeals/Hearings & decisions.” Scroll down to click on “Search by year.” Select 2013 and then “Search.” Look under decisions dated 2013/03/11.


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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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