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 Sells Property Twice by Mistake (Fails to Count Days) RECO Discipline

February 25, 2016 - Updated: April 4, 2016

Agent Sells Same Property Twice By Mistake (Failure to Count) (RECO Discipline)

 

Certainly, it would be nice to sell the same property over and over again, but those days have passed. That was Australia in the mid 19th Century, the height of title fraud.

 

This case is just plain “goofiness” and a Listing Agent who didn’t have his wits about him.

 

William Wayne had a listing and did a deal with the Chandras who were represented by Wilma Flinstone.

 

First Sale to Chandras

 

This was the deal:

 

Purchase Price:

$600,000.00;

Deposit:

$25,000.00;

Completion Date:

August 28, 2014; and

Conditions:

Inspection and Financing, each within five (5) business days, excluding Saturdays, Sundays and statutory holidays. The conditions did not specify a time-of-day deadline but effectively expired at 11:59 p.m. on July 3, 2014.

 

 

Second Deal to Browns

 

This was the second deal:

 

Purchase Price:

$598,000.00;

Deposit:

$25,000.00;

Completion Date:

September 8, 2014; and

Conditions:

None

 

 

The Discussions and Negotiations

 

Mistakenly, Wayne led Wilma and the Browns to believe that the Chandras had not firmed up their Offer, so they could submit one themselves.

 

The Second Offer was accepted at approximately 6:30 p.m. on Thursday, July 3, 2014. Given the weekend of June 28 and 29, 2014 and the Canada Day statutory holiday, the conditions on the First Offer did not expire until 11:59 p.m. on July 3, 2014.

 

 

At approximately 9:00 p.m. on July 3, 2014, the First Buyers, Chandras waived the conditions on the First Offer and the First Offer consolidated into a firm and binding agreement.

 

As a result, and due to Wayne’s negligence, the Sellers became simultaneously obligated to two sets of buyers. However, having realized his mistake, Mr. Wayne took steps to seek the advice of his broker of record and from counsel. In the end, a mutual release was signed in respect to the second Buyers.

 

RECO DECISION

 

This is a copy of the RECO decision:

 

It is agreed that Wayne acted unprofessionally when he:

 

1. Failed to treat the Sellers fairly and honestly, to provide them conscientious and competent service, and to act in their best interests, in contravention of section 3, 4 and 5 of the Code of Ethics, when he failed to take steps to prevent the Sellers being simultaneously bound by two co-existing Agreements of Purchase and Sale.

 

2. Failed to make his best efforts to prevent error and misrepresentation and acted unprofessionally when he failed to take necessary steps to prevent or in the alternative fully inform the Sellers of the risks of entering into two simultaneously binding Agreements of Purchase and Sale, thereby contravening sections 38 and 39 of the Code of Ethics.

 

It is agreed that Wayne breached the following sections of REBBA Code of Ethics:

 

FAIRNESS, HONESTY, 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 clients.

 

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.

 

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.

 

PENALTY

 

Wayne was ordered to pay a penalty of $3,000.00 on or before April 29, 2016.

 

COMMENT

 

A few hours and Wayne would have been saved. When did the first contract start? What was the time of acceptance? That time is the trigger for two matters:

 

1)    Delivery of the deposit, often measured in hours, and

2)    The Conditional period.

 

 

You can appreciate that if the conditional time was set out very clearly in the Agreement as 4:00 pm on 3 July 2014, then, we have it. That’s the time. After that, the Sellers may accept another Offer. Obviously, that would have been the preferred way of doing business.

 

The next issue is that we used the concept of “days”. Rather than a straight count of calendar days, we have “business days”, whatever that means. In this case, business days was defined to mean all days “excluding Saturdays, Sundays and Statutory holidays”.

 

In this case Canada Day was one of those days.

 

Fortunately, we did not have a case of “banking days” which seemingly has no particular meaning now at all, throwing a "monkey wrench" into all of this. Federal facilities are all open, while provincial offices are closed.

 

So, Wayne is out, in the count by one day! How does this happen? Very simple, Wayne must have counted the day of acceptance as “DAY 1”. But, that’s not how you count.

 

The first day of the count will be the day AFTER acceptance:

 

Acceptance Day   June 25 (Wednesday)

 

DAY 1                 June 26 (Thursday)

DAY 2                 June 27 (Friday)

DAY n/a              Saturday

DAY n/a              Sunday

DAY 3                 June 30 (Monday)

DAY n/a              July 1 (Tuesday, Canada Day)

DAY 4                 July 2 (Wednesday)

DAY 5                 July 3 (Thursday) 2014

 

 

So, that’s it.  All you need to know is how to count.

 

Also, let’s say you were thinking about a business day ending sooner in the day than midnight. That would mean that you never heard of shift work.

 

So a business day or a banking day, for that matter doesn’t end at 4:30 pm or 5:00 pm; it ends at 11:59 pm.

 

Hours and days are important in the count. You also need to know whether you are counting in hours, as in the clause which deals with deposit delivery or hours as in the conditional periods.

 

You should appreciate that there was no property to sell to the Browns. It had already been sold to the Chandras.

 

 

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: agent failure to count sells property twice liability reco discipline ontario law
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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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