Listing Agent Fails to Disclose Building Inspector’s Concerns

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Blocked attendance: RECO Discipline

We looked at this case from the Buyer’s agent perspective where RECO assessed a $6,500.00 fine.

This matter involved the Listing agent. On the MLS listing, the property was described as vacant and recently renovated. Part of the renovations included opening the floor plan on the main floor and installing a beam in the main floor ceiling. The Listing agent (daughter of the Seller) was therefore aware of the renovations before listing the property.

The deal was as follows:

a) Offer price of $745,000.00 with a $15,000.00 deposit,

b) Closing June 30, 2020,

c) Conditional on financing, sale of the Buyers’ current property, and home inspection.

The inspection found mould in the attic and that the soffits needed to be replaced. The inspection report indicated the Property was vacant at the time the inspection was done.

The inspection report made no comment specifically about the newly installed beam; however, it did indicate the Property showed signs of renovation and cautioned that the work may or may not have been performed with proper permits and code inspections. The inspection report further cautioned the Buyer to verify with the “local code authority to determine if this work was done properly and conform[ed] to the building standards applicable at that time.” It also recommended further inspections be done by other professionals, such as an HVAC specialist, an electrician and an engineer. Further, the report recommended that copies of the building permits be obtained.

On June 11, 2020, a building inspector from the municipality left a door hangar at the Property requesting that the Seller contact him regarding a complaint regarding the renovations by the Seller.

The Listing agent, acting on behalf of the Seller, sent an email to the Building Inspector on June 11, 2020, and confirmed no load bearing walls had been removed. She also provided information from the contractor, who advised that the engineered beam that was installed only held the ceiling joists and was suitable for the span. The Listing agent closed the email asking to be contacted to provide any further assistance.

On June 11, 2020 the building inspector left another door hangar at the Property requesting that the Seller contact him regarding a complaint regarding the renovations by the Seller.

The Listing agent (daughter of the Seller) advised the Building Inspector that the Property was tenanted and due to Covid concerns, he would not be permitted to visit the Property.

The Building Inspector did not contact Paterson again and the transaction closed on July 30, 2020, as scheduled. Due to the fact the Building Inspector did not make any effort to follow- up on the matter in the five (5) weeks prior to closing, the Listing agent reasonably believed any concerns had been addressed.

On September 11, 2020 (substantially after closing) the Buyer received a notice from the municipality indicating that no building permits had been obtained for the Property and that the issue with the beam needed to be corrected. The Order indicated a deadline date of October 13, 2020,

The Buyer had to file a claim with his title insurance company in order to satisfy the Order from the municipality.


The Listing agent failed to comply with the Code of Ethics as follows:

  1. She failed to advise the Buyer or the Buyer’s representative of the inquiries made by the Building Inspector which she was aware of approximately six weeks before closing.
  • She limited access to the Property due to the COVID restrictions existing at that time, which delayed the Building Inspector in personally viewing the Property to determine compliance with the applicable building code.

Taken together, this conduct is contrary to sections 3 and 39 of the Code of Ethics.

3. Fairness, honesty

39. Unprofessional conduct

A fine of $10,000.00 was assessed. Two RECO Courses each being 90 minutes in length were reqired prior to m10 April 2023. The decision was released on 22 September 2022.

Brian Madigan LL.B., Broker

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