This is a rather unusual situation. The agent knew the mother and undertook all real estate related activities with the mother although the son was truly the client.
The agent did not meet or communicate directly with the son, including failing to confirm any instructions or directions purportedly provided to her on his behalf by his mother.
The real estate agent acted on the son’s behalf in:
a) negotiating the purchase of the property,
b) attempting to negotiate amendments to the purchase price; and
c) attempting to assist in obtaining financing for the son by contacting a bank on his behalf.
This is awfully peculiar!
In the course of representing the son, the agent accepted several documents that were purportedly signed by him, including representation agreements, purchase agreements and proposed amendment agreements.
Although she did not receive the documents directly from the son or witness him signing the documents, she nevertheless signed some of these documents as a witness his signature.
The transaction did not close due to the inability of the son to obtain financing and to make the necessary further deposit payments.
The son later claimed that he did not sign the APS and that his signature had been forged by his mother on the relevant documents.
The Property was later sold to a different buyer for significantly less than the purchase price set out in the APS ($1,270,000 vs. $1,900,000).
Civil litigation was commenced by the Seller to recover the losses from the failed sale to the son.
Maybe, now would be a good time to meet the son!
Decision
Date: 7 June 2022
Order: Breach of 3, 4, 5, 37(1), 38 and 39 of Code of Ethics
Penalty: $17,000.00 plus two Courses
Time to pay: 6 February 2023
Time to take Courses: 31 October 2022
Transgressions:
The agent:
- failed to verify the identity of her purported client, contrary to sections 4, 5, 37(1), and 38 of the Code of Ethics.
- entered into a representation agreement with and represented her purported client without ever meeting or speaking with the purported client, contrary to sections 4, 5, and 38 of the Code of Ethics.
- purported to witness signatures that she did not in fact witness, contrary to sections 3, 4, 5, 37(1), and 38 of the Code of Ethics.
- engaged in disgraceful, dishonourable, unprofessional and/or unbecoming conduct in violation of Section 39 of the Code of Ethics as a result of the actions and/or omissions set out above.
Relevant Code Provisions
Fairness, honest, etc.
3. A registrant shall treat every person 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 client.
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.
Inaccurate representations
37. (1) A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate.
Error, misrepresentation, 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.
COMMENT
So, here we have an individual who apparently wants to buy a property. The agent only deals with the mother. Never speaks to him and never meets him. She draws up papers which the mother signs. Then, she says that she was there and saw him sign!
The deal goes sideways. She already has him in breach of contract because of the failure to pay the subsequent deposits. The value of the property goes down. He doesn’t get financing. He gets sued by the Seller.
Maybe now might be a good time to “meet” her client for the very first time!
Brian Madigan LL.B., Broker