Brian Madigan LL.B., Broker

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

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Agents Must Declare Relationships to Relatives

May 8, 2016 - Updated: May 8, 2016

Disclosure of Interest Obligation


Registrants have a duty to disclose before they do business. This is a 2009 case. Kindly note the case actually predates REBBA 2002 which came into force on 31 March 2006.

This involves violations of several rules regarding ethical behaviour, financial disclosure, obedience to law and competence under the  former RECO Code of Ethics. Those were the rules prior to the current Code of Ethics. This case actually took place in 2005.


The Sellers Alan and Bill listed a property located at 123 Main Street for sale with Brokerage ABC through Martha, the Listing representative.


The Sellers reduced the asking price from $349,995 to $337,995. Two days after the price reduction, an offer was received and presented by Seller Representative Martha under dual agency (now multiple representation under REBBA 2002)


Albert the Buyer was a relative of Seller Representative Martha.


Martha did not provide the required disclosure under the REBBA and the RECO Code of Ethics, declaring her direct or indirect interest in the purchase of the property.


The price offered in the first offer was $323,000. The Sellers signed it back at $337,000. The first offer subsequently lapsed as the buyer did not accept the counter offer.


Shortly after, another offer was presented by Martha on behalf of Albert for $328,000. The second offer was signed back at $332,000 and accepted by Albert.


Martha did not disclose the nature of her interest in the purchase of 123 Main Street.


The Sellers only discovered the relationship between Martha and Albert when the transaction was about to conclude.


The Decision by RECO Panel



The RECO panel determined that the registrant acted in an unprofessional manner when she failed on two occasions, to provide to the Sellers with written statements and have the Sellers acknowledge in writing, his registration status and interest in the purchase of 123 Main Street.


The RECO Discipline Panel concluded that the registrant breached the following Rules of the RECO Code of Ethics:


Rule 1 (2) – Ethical Behaviour – A member shall endeavour to protect the public from fraud, misrepresentation or unethical practice in connection with real estate transactions.


Rule 5 – Financial Disclosure - A Member shall disclose the financial aspects of a Transaction and any personal interest of the Member in a matter to the Parties sufficient to enable them to make an informed decision.

Rule 23 – Obedience to Law - A Member shall practice in accordance with all federal, territorial or provincial law or municipal by-law relevant to the Member fitness to practice.




Martha was ordered to pay a $5,000.00 penalty within 90 days of sending this decision of the Discipline Committee.




There are many reasons for disclosure. In this case, Alan and Bill deserved to know that Martha might favour her own relative, Albert over them, even though they hired her first. This was a conflict of interest. Disclosure was required.


Brian Madigan LL.B., Broker

Tagged with: relative disclosure interest reco rebba
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

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