May 4th - 2011

RECO Decision: Registrant fined for falsifying documents

The following decision from RECO Discipline and Appeals Hearings has been condensed. All individual and corporate names have been changed.

The following decision from RECO Discipline and Appeals Hearings has been condensed. All individual and corporate names have been changed.

THE FACTS
Debra wanted to lease a property and enlisted the help of Byron, a salesperson with Nourrie Real Estate Brokerage. Debra needed proof of income to qualify for a lease. Byron (aka “Mr. Smith”) wrote and signed an employment letter stating that Debra had been an employee at his company, Tolio Inc., for more than four years. According to the letter, Debra held the position of secretary and was earning an annual salary of $52,000.

Armed with the employment letter, Byron drafted an offer on Debra’s behalf to lease a residential property from landlord Al, for $1,350 per month. Byron witnessed Debra’s signature on the offer, which noted Nourrie Real Estate as the co-operating brokerage.

Debra subsequently completed a rental application in which she stated that she was earning a monthly salary of $4,500 as a Tolio Inc. employee. That document also identified “Mr. Smith” as Debra’s supervisor. Two days later, Byron faxed Debra’s lease application, offer and employment letter to Al.

Al accepted Debra’s offer to lease, making it a firm and binding agreement. However, shortly after Debra took possession of the property, Al became suspicious when his calls to her “workplace” were always redirected to Mr. Smith’s cell phone. Al also began to notice Debra’s increasing presence at home during regular business hours, so he decided to examine Tolio Inc. more closely. He soon discovered that Byron was a co-owner of the company and was obviously “Mr. Smith.”

In his complaint letter to RECO, Al noted that after he raised his concerns with Debra, she confirmed that the employment letter was fraudulent and that she did not work at Tolio. Al also remarked that, because he had to terminate the lease after only four months, he had difficulty finding new tenants and incurred a loss of income.

The Office of the Registrar sent Byron a notification of complaint, asking him to submit a response. Byron’s written reply “acknowledged the truth and validity of the allegations made against him,” and admitted that he provided Debra with a letter from his company specifying that she was working there even though he knew that the information was not valid.

THE FINDINGS
The RECO panel determined that Byron acted unprofessionally by: providing Debra with an employment letter he knew to be false; assisting Debra in the preparation of documents he knew contained false information -- documents he knew others would rely on to their detriment; and submitting documents to Al that he knew contained false information, which Al acted upon, resulting in a financial loss.

The RECO panel determined that Byron breached Sections 3, 38 and 39 of the REBBA 2002 Code of Ethics: 3 - Fairness and honesty - A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity; 38 - Error, misrepresentation, fraud - 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; 39 - Unprofessional conduct, etc. - A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant.

PENALTY
Byron was ordered to pay a fine of $13,000 and to successfully complete the OREA Real Estate College’s “Real Property Law” classroom course. The full decision is dated 2010/07/12 and can be viewed at www.reco.on.ca. Look under “Complaints and Enforcement” and scroll down to the “Discipline and Appeals Hearings and Decisions” section. Choose the appropriate year, uncheck all other search boxes, and search by date only.

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