There were two agents at the Brokerage. One was senior with a good deal of experience. They both took on the listing of a property which was:
- Vacant land,
- zoned as “Restricted Agriculture”
- narrow dimensions to property which would have required a minor variance
The co-listing agent also represented a Buyer, thereby becoming a dual agent. She made inquiries of the municipality
Planner for the Municipality advised her:
“… that a residential structure could not be constructed on the Property.”
Director of Planning and Building Services advised her:
“…..that a residential structure could only be built on the Property if an owner was able to obtain a variance that would allow for a reduced lot frontage and a reduced side yard setback.”
The property was ten listed on MLS “….described as a 3.7-acre lot with an existing driveway that was a perfect opportunity to construct a “forever home.”
The senior agent relied upon his associate that she had made the necessary inquiries to the Municipality and that it would be possible to build a house on the Property. He did not conduct his own independent inquiries.
- $75,000 Purchase price
- closing date June 19, 2020.
Then, the Buyer made an application. The Buyer hired a professional planner to assist him in making an application to change the zoning of the Property. Although the municipality had no objection to a variance, a neighborhood group opposed. As a result, the Buyer’s municipal zoning amendment application was denied, and he was not able to build on the Property.
The Buyer then sold the property at a $27,000.00 loss.
The senior agent failed to comply with the Code of Ethics as follows:
- advertised inaccurate information about the ability to build a house on the property, contrary to sections 3, 4, 5 and 38 of the Code of Ethics.
2) Severnuk did not take appropriate steps to confirm that a buyer would be able to build a house on the property before making a public advertisement of such, contrary to sections 3, 4, 5, 21(1) and 38 of the Code of Ethics.
3 honesty and fairness
4 best interests
5 conscientious and competent service
21(1) material fact discovery
38 error, misrepresentation, fraud
The senior agent was assessed a $7,500.00 fine together with a requirement to attend two 90 minute Courses. The decision was made on 14 September 2022 however the registrant was given until 31 May 2023 to take the Courses.
It is going to be very difficult to delegate anything without intense supervision. The key aspect here was that the Buyer’s informed consent was not obtained in advance. The Buyer ran into the same roadblocks and should have known about them in advance.
In this case, it looks like it was the neighbours who mounted the substantial opposition not the municipality. So, how much did the Buyer know about that?
Brian Madigan LL.B., Broker