Be Careful about “parking”

Agent Fails to Discover Parking Pads Legality

AGREED STATEMENT OF FACTS AND PENALTY

1. Fred Flintstone is a member of RECO and is registered as a salesperson under the Act. At all material times, Fred was employed by Brokerage ABC.

2. Registrant Wilma is a member of RECO and is registered as a broker under the Act. Registrant Barney was at all material times employed by Brokerage ABC.

3. Registrant Jeff Frey is a member of RECO and is registered as a salesperson under the Act. At all material times, Robert was employed by Brokerage XYZ.

 4. The Complainants Barney and Betty Rubble were at all material times the owners of a single family dwelling located at 1 Street.

5. The Buyer was at all material times represented by Registrant Jeff Frey in the trade of the Property.

6. The Sellers were the owners of 1-A Street (the “Property”), which was the neighbouring property to the Rubbles. At all material times, the Sellers were represented by Fred and Wilma and Brokerage ABC.

7. On or about April 16, 2012, the Sellers listed the Property with Brokerage ABC through Fred Flintstone.

The Property was placed on the Multiple Listing Service (“MLS”) with an asking price of $1,699,000.00.

The MLS listing information indicated that the Property had a mutual drive, one (1) parking space and the remark:

“Front Pad Parking Application has been submitted to the [City]”.

8. On or about April 12, 2012, prior to the 6:00 p.m. scheduled commencement of a wine and cheese event at the Property, the Complainants, having seen and reviewed the feature sheet and the list of features for the Property, spoke to Fred Flintstone and another member of the “Team” to advise them that the MLS listing information was incorrect regarding the parking representations.

In the response to this advice, Flintstone, or the other member of the “Team”, asserted that there was a monthly revolving right to park in the mutual driveway, which the Rubbles expressly denied.

The discussion between the parties concluded with the member of the Team stating that the listing error would be corrected.

9. Notwithstanding the objections voiced by the Rubbles, Fred continued to market the Property as having

  • a single parking spot
  • with the potential for a second,
  • along with the express misrepresentation” “Front parking pad applications [sic] has been submitted to the [City]”.

The continued efforts of the Complainants to rectify the misrepresentation in the MLS listing information were not acknowledged by Fred.

10. In fact, the Property shares a mutual drive and, therefore, has a complementary right of way with 1 Street, owned by the Rubbles.

Furthermore, there was no parking space.

Furthermore, licensed parking spots in the City do not follow the trade of a Property;

The new owner is required to apply for a transfer of the licence agreement with the City.

The Buyer asserts that, contrary to the representation in the MLS listing information regarding the potential for an additional parking spot, the City had already rejected the Sellers’ application for a parking pad.

11. Six (6) prior MLS listings for the Property, including three by Brokerage A in 1996, 2001 and 2002, all indicate a mutual drive and no parking spot.

12. Following a viewing of the Property with Jeff Frey during which he was told by Fred that there was one parking spot and “an excellent chance to get a second parking spot”, or words to that effect, on May 25, 2012, the Buyer submitted a conditional offer to purchase the Property for $1,610,000.00 (the “Offer”).

The Offer was conditional on financing, a satisfactory inspection and the delivery of a survey of the

Property which showed, among other things, all existing easements.

The Sellers accepted the Offer without amendment and executed the confirmation of acceptance at 8:30 p.m., on May 25, 2012, thus creating an Agreement of Purchase and Sale (the “APS”).

13. On June 1, 2012, the Buyer and Sellers executed and amendment to the APS removing the conditions and reducing the purchase price to $1,600,000.00.

14. The trade of the Property completed on August 31, 2012, without further incident.

15. Following the completion of the transaction, on or about September 5, 2012, the Buyer

  • was advised by the City,
  • contrary to the representations of Registrant Fred, other members of the Team and the marketing documents published for the sale of the Property,
  • that his new home had no parking spots and no potential for a city approved parking pad.

16. On September 10, 2012, the Rubbles filed a complaint with RECO concerning the sale of the Property and the conduct of Brokerage ABC, Fred and Wilma during the sale.

On April 15, 2013, the Buyer submitted a second complaint concerning the sale of the Property.

17. And other such particulars and matters of ethical conduct that subsequently may come to the attention of the Registrar in relation to this matter, and as may be presented during the hearing of this matter.

SUMMARY OF AGREEMENTS

It is agreed that Fred Flintstone acted unprofessionally:

1. In failing to advise his brokerage, Brokerage A, the co-operating registrant, Registrant B, and the Buyer of the erroring the marketing documents and, therefore, a material fact about the Property. Fred failed to treat the participants in the transaction fairly, honestly and with integrity in violation of s.3 of the Code.

2. In failing to take reasonable steps to inquire into the assertions of the Rubbles regarding a material fact about the Property, Fred falsely represented a material fact about the Property on behalf of the Sellers and, thereby, failed to promote and protect the best interests of his clients in violation of s.4 of the Code.

3. In failing to take reasonable steps to inquire into the assertions of the Rubbles regarding a material fact about the Property, Fred falsely represented a material fact about the property on behalf of the Sellers and,

thereby, failed to provide conscientious service to his clients and customers and in so doing dialed to demonstrate reasonable knowledge, skill, judgment and competence in providing those services in violation of s.5 of the Code.

4. By issuing opinions about the status of the parking and the potential for a parking pad permit that were contrary to the existing and readily determined facts, Fred failed to demonstrate reasonable knowledge, skill, judgment and competence in providing such opinions, contrary to s.6 (1) of the Code.

5. In failing to take reasonable steps to determine a material fact about the Property and instead relying on the representations of his clients while disregarding the assertions of the Rubbles as to the parking issues, Fred, thereby, acted contrary to s.21 of the Code.

6. On the basis of the foregoing particulars and allegations, Fred knowingly made an inaccurate representation in relation to a trade in real estate, failed to exercise his best efforts to prevent error, misrepresentation or fraud, and knowingly engaged in an act or omission that, in having regard to the circumstances, would be reasonably regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant in violation of ss.37, 38 and 39 of the Code.

It is agreed that Fred has breached the following sections of the Code of Ethics:

FAIRNESS, HONESTY AND INTEGRITY

3 A registrant shall treat everyone the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

BEST INTERESTS

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

CONSCIENTIOUS AND COMPETENT SERVICE

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

PROVIDING OPINIONS, ETC.

6 (1) A registrant shall demonstrate reasonable knowledge, skill, judgment and competence in providing opinions, advice or information to any person in respect of a trade in real estate.

MATERIAL FACTS

21 (1) A broker or salesperson who has a client in respect of the acquisition or disposition of a particular interest in real estate shall take reasonable steps to determine the material facts relating to the acquisition or disposition and, at the earliest practicable opportunity, shall disclose the material facts to the client.

(2) A broker or salesperson who has a customer in respect of the acquisition or disposition of a particular interest in real estate shall, at the earliest practicable opportunity, disclose to the customer the material facts relating to the acquisition that are known by or ought to be known by the broker or salesperson.

INACCURATE REPRESENTATION

37 (1) A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate.

(2) A registrant shall not knowingly make an inaccurate representation about services provided by the registrant.

ERROR, MISREPRESENTATION AND FRAUD, ETC.

38 A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate.

UNPROFESSIONAL CONDUCT, ETC.

39 A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all of the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant.

AGREED PENALTY

Fred Flintstone be ordered to pay a penalty of $10,000.00 on or before March 4, 2016.

DECISION OF THE CHAIR Having reviewed and considered the Agreed Statement of Facts, the Chair of the Discipline Committee (REBBA 2002) concluded that the Respondent breached Sections 3, 4, 5, 6(1), 21(1), 21(2), 37(1), 37(2), 38 and 39 of the REBBA 2002 Code of Ethics.

The Chair of the Discipline Committee (REBBA 2002) is also in agreement with the joint submission of the Parties as to penalty and accordingly makes the following order: 1. Allister Sinclair (a.k.a. Al Sinclair) is Ordered a Fine of $10,000.00 payable to RECO on or before March 4, 2016.

[Released: January 27, 2016]

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource

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