Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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Agent Fails to Properly Identify Seller (RECO Discipline

March 23, 2016 - Updated: March 23, 2016

 

Agent Fails to Properly Identify Seller (RECO Discipline)

 

This particular matter would be easy to solve for the Listing Agent. Simply ask two (2) questions:

 

  1. Who is the owner?
  2. May I see the papers?

 

In this case, neither question was asked.

 

Bruce Wayne was the Listing Agent and Robin Yount was his colleague at the office, also a registrant and shown on the listing as the “second representative” of the Seller.

 

Barney Rubble indicated that he owned the property. Wayne took him at his word and did not make further inquiries. In fact, the property was owned by Eaglewood Company, which was actually owned and controlled by Barney’s wife Betty.

 

Wayne gets Barney to sign all the documents when in fact he doesn’t have signing authority at all.

 

Here’s a report from a RECO Discipline Panel on one aspect of the case, namely the identity of the Seller:

 

IDENTITY OF THE SELLER

 

28. At all subject times prior to the sale of the Property, the owner of the Property was registered as Eaglewood Company. Throughout all transactional documentation, Wayne and Yount represented the seller to be Barney Rubble.

 

Barney’s name and signature appear as the representative of the Seller on all listing agreements and agreements of purchase and sale.

 

29. In fact, Betty Rubble, not Barney, was the sole officer/director of the Seller.

 

30. Neither Wayne nor Yount took sufficient, if any steps to verify ownership of the Property or to ascertain who possessed signing authority for the Seller.

 

The most that was done by either Wayne or Yount was to rely upon Barney Rubble’s representations and actions and his lawyer’s representations and actions in signing the Agreements.

 

When it came to the decision and the conclusion, here’s how the Panel addressed the identification issue:

 

“It is agreed that Wayne acted unprofessionally including as follows:

 

1. Wayne failed to promote and protect the best interests of his clients by:

 

B. Failing to verify the identity of the owner and/or proper signing authority of the Seller, thereby placing the best interests of the Seller, the Consumers, and Charon Company at risk.

 

2. Wayne failed to provide conscientious service to his clients and did not demonstrate reasonable knowledge, skill, judgment and competence in providing those services by:

 

B. Failing to verify the identity of the owner and/or proper signing authority of the Seller by relying on the representations and actions of Barney Rubble and Barney Rubble’s lawyer.

 

3. Wayne failed to take reasonable steps to determine the material facts related to the acquisition/disposition of the Property, at the earliest practicable opportunity, and disclose the material facts to his clients by:

 

B. Failing to verify the identity of the owner and/or proper signing authority of the Seller.

 

5. Wayne failed to use his best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate by:

 

B. Failing to verify the identity of the owner and/or proper signing authority of the Seller.

 

6. Wayne engaged in acts which would reasonably be regarded as unprofessional by:

 

B. Failing to verify the identity of the owner and/or proper signing authority of the Seller.

 

COMMENT

 

You might think that this is simple and straightforward. The information should be available. It would appear on:

 

  1. Transfer/Deed,
  2. Charge/Mortgage,
  3. Tax Bill,
  4. Notice of Assessment,
  5. Utility bills.

 

So, to get matters started any of these sources could be used for verification.

 

In addition, Wayne could have checked ownership on the internet. The correct name will appear in the GeoWarehouse search, which is available to all members of real estate boards throughout Ontario.

 

If not, then, the agents could easily seek a letter from the Seller’s lawyer who would have access to the public records as well.

 

This breach exposed everyone involved in the transaction to unnecessary risks.

 

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

www.iSourceRealEstate.com


Tagged with: identity seller discovery facts material reco. discipline
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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