Agent Fails to Check Zoning Status of Adjacent Lands (RECO Discipline)
Bill and Martha Smith, the buyers were looking for privacy. They wanted a private backyard that did not back onto other homes. This is something which many buyers seek, property that backed onto parkland, woods or greenspace. Waterfront would be good too, but that was out of their price range.
Their agent Fred found them a property listed by Melissa Mills.
The property on the internet, on the MLS® Listing and other real estate web portals promoted it as:
“backing onto EP (Environmentally Protected) land”
Fred advised him that EP referred to Environmentally Protected.
Melissa’s Feature Sheet
The Feature Sheet, included the statement:
“BACKING ONTO EP LAND!” on the front page,
“OVERLOOKING THE EP LAND AND TREES” on the second page.
Agreement and Closing
The Buyers negotiated a successful purchase agreement and the Property closed April 29, 2011. The offer did not contain any conditions to verify or validate the zoning claims.
The Buyers met their neighbours after moving in only to discover that the Property does not “back onto EP land” as the advertising led them to believe.
Other neighbours also contradicted that claim, and provided the Buyers with copies of zoning applications they received in 2009, for the land abutting the properties along an adjacent street.
The Buyers then obtained zoning maps from the City which show the abutting land as agricultural, residential and beyond that EP land is present.
An urban planner and Manager of Development Control for City testified:
- the property immediately behind the subject Property was not and has never been exclusively EP land.
the public can request confirmation and/or zoning and land use information several ways:
- a visit to the planning office,
- telephone, and
- email, and that
- the City has a zoning information officer specifically charged with the task of providing such information.
- There is a fee for some reports offered by the City.
- it is quite common for real estate representatives to ask about zoning and land use and he has had no dealings with Ms. Mills.
- maps and aerial photos, showed the property behind the subject Property to be zoned “agricultural, residential and EP”
- the agricultural and residential sections abutted the subject Property
- EP land were behind that.
The actual EP land is 26.1 meters from the subject Property with a strip of agricultural and residential land directly behind the Property.
Fred stated that he and the Buyers relied upon the MLS® listing and Feature Sheets and felt it was the duty of the listing brokerage to have specific knowledge about local zonings.
Under cross-examination it was suggested that:
- zoning(s) can change,
- he did not question or discuss any of the representations made on the advertising with Ms. Mills,
- he did not carry out any investigations or confirmations on present zoning of the land behind the Property on behalf of his client.
Fred felt they did pay more based on the EP claim.
The Listing Agent - Melissa Mills
- has been a registrant for 10 years and
- knew the Seller of the Property.
- It had been previously listed and the EP land claim was made at that time.
Ms. Mills told the Panel that she does not believe or accept information a Seller may tell her at the time of listing a property, without further checking of the facts and she uses a standard check list when taking and processing listings.
Evidence in the form of an email dated January 13, 2011 from a staff member of Ms. Mills’ brokerage stating that she had received confirmation from the zoning department of City A that the land behind the Property is zoned as “Agricultural and EP around the pond area”
Ms. Mills repeated her belief in the claim of EP land to be true and she had done nothing wrong, in making such a claim.
In closing, Ms. Mills again repeated she never relies on what a Seller may tell her and the City confirmation was sufficient validation.
Under cross-examination Ms. Mills told the Panel she has changed her office policies following this incident.
She further confirmed that she (or staff) did not ask where the EP land was actually located. RECO prosecution asked if “behind” and “backs onto” have different meanings, to which Ms. Mills claimed these are descriptive not technical, when reviewing the email obtained by her staff, at the time of the listing.
Here is a copy of the reasons of the Tribunal:
Having carefully considered the testimony of the witnesses at the hearing, and the documentary evidence, the Panel has arrived at the following conclusions:
Ms. Mills did not go far enough in her efforts to clarify and avoid the misrepresentation of the actual and complete zoning of the land that backed onto the Property. Agricultural, residential and EP zoning information existed and written confirmation from the City zoning department was available at the time of listing the Property.
Therefore, we find Ms. Mills in violation of section 3 of the Code of Ethics.
Ms. Mills did not take reasonable steps to determine the full and complete facts, before making the public offering. While she stated she never accepts the words of the Seller,
Ms. Mills did not obtain written reports of all true zonings on record, which were readily available. Therefore, we find Ms. Mills in violation of section 21(1) of the Code of Ethics.
While Ms. Mills used some effort, it was not her best efforts and she failed to provide the full picture on all zoning, regarding the land backing onto the Property. Therefore, we find Ms. Mills in violation of section 38 of the Code of Ethics.
Statements in the MLS® Listing and Feature Sheet that the Property backed onto Environmentally Protected land were inaccurate. These inaccuracies could have been avoided if Ms. Mills had obtained readily available written confirmation from the City zoning regarding the zoning of the land onto which the Property backed. By not doing so, Ms. Mill’s actions were unprofessional and unbecoming a registrant.
Therefore, we find Ms. Mills in violation of section 39 of the Code of Ethics.
Ms. Mills was ordered to pay a Fine of $5,000.00 payable to RECO.
Further RECO Reasons and Guidance
The Panel, after carefully considering the submissions of the parties, has made the findings on penalty as outlined below.
1) Ms. Mills accepted the words and description regarding the land behind the property from the seller and from her personal assistant and failed to verify the zoning and land use of the property behind the home she listed, herself.
While there was EP (Environmentally Protected) land behind the property, the property was not backing onto “EP lands” as stated in the listing and feature sheet. The property backed onto land zoned Residential and Agricultural with EP land further behind.
2) Only the EP land was mentioned and promoted in the listing appearing on the internet, the actual MLS® listing and feature sheets, and it was that feature that created the interest of the Buyer, who after purchasing the property discovered from discussions with neighbours and city records the true and complete zoning of the properties behind the home and brought the case to RECO.
Ms. Mills should have obtained a written zoning description from the zoning department for all lands referred to and promoted and made sure that the listing and feature sheets complied, and further that she should not have relied on previous listings or her assistant’s inquiry.
3) Had Ms. Mills herself checked with city and planning records, true and up-to-date land use maps were available and could have been made available to subsequent Buyers easily, there would be no confusion or misrepresentation.
4) Ms. Mills advised the Panel during the course of the hearing that her policies and procedures have been changed to prevent such an occurrence again.
5) The problems in this serious complaint were all avoidable by publically available records at the municipal office before making such claims used in advertising and promoting the listed property and the properties referred to in the listing and promotion of the property.
Those zoning and land use records were presented at the hearing; had they been obtained and checked at the time of the listing, there would be no complaint and no confusion.
The problem seemed to develop in haste. Melissa relied upon her Sellers, looked at previous listings and her assistant’s inquiry.
Why not just do some of that investigation herself. Don’t blame the unregistered assistant! Step up to the plate and accept the blame.
The EP lands were close, about 26.1 meters away (85.63 feet). So, the term abut, or adjacent, or even “behind” for that matter, or “backs onto” should not be used.
Maps would have illustrated exactly the situation. It was the “residential” component of the 85 foot strip which makes it vulnerable to future development. That doesn’t help “privacy”, the issue that the Smiths were seeking.
It should also be noted that this particular case focussed on the Listing agent and her mistakes. What about Fred? Apparently, he also, did nothing! This case doesn’t take him “off the hook”, we are just looking at the conduct and shortcomings over Melissa alone.
Note: As a rule, I use fictitious names. The actual case is published on RECO’s website and is available to the public. For educational purposes, the names of the parties really don’t have any bearing. If you need to quote the case, you will have to obtain the proper legal citation.
Brian Madigan LL.B., Broker