Case Summaries

What Are Case Summaries?

Welcome to the Case Summaries monthly magazine of the Calgary real estate market. Inside you will find the summaries for all disciplinary decisions occuring at the Real Estate Council of Alberta (RECA) since the previous newsletter, including any suspensions and approved lifetime withdrawals from the industry.RECA is authorized to carry out conduct proceedings under Part 3 of the Real Estate Act.
Some events mentioned in the decisions included in this issue occurred prior to December 1, 2020. The sanctions as noted, reflect the Real Estate Act as it was then applied. Learning opportunities reflect advice for licensees under the Real Estate Act, including the amendments that came into force on December 1, 2020.
Questions about disciplinary information RECA publishes and why? Review RECA’s Publication Guidelines online.For more information about the cases summarized in this publication, please click on the underlined blue heading at the start of each summary

Most Recent Case Summaries (August 24 – September 21, 2021)

Case Summaries (June 16 – July 21, 2021)

Past Cases

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Jane Doe, Real estate associate registered with Century 21 Foothills Real Estate Ltd. o/a Century 21 Foothills Real Estate

  • Real estate licensees must provide competent service [s.41(b) of the Real Estate Act Rules]
  • In July 2020, Ms. Doe submitted an Offer to Purchase on behalf of her client for a property
  • The sellers name was not fully listed on the Offer to Purchase
  • Section 14 of the Offer to Purchase—Authorizations—was left blank
  • Corrections and deletions on this Offer to Purchase were not initialed by Ms. Jane’s client
  • Further investigation determined that the RECA Consumer Relationships Guide and the Buyers Exclusive Representation Agreement with Ms. Doe’s client were also filled out improperly and missing important information

Learning Opportunity

  • Licensees must be competent in all areas in which they provide services. In this case, the licensee should have ensured that all the documentation for this transaction was filled out accurately, completed properly, and signed off by their client. Failing to have completed paperwork can lead to confusion and complications regarding a transaction.

Competent Service

Jane Doe, Property management broker registered with Mayfield Management Group Ltd

  • An industry member who is required by the rules to keep and operate a trust account shall keep complete and accurate financial records in which the industry member shall maintain a separate record for each person on whose behalf the industry member is acting of all money received in trust, money held in trust, interest earned on money held in trust, and disbursements made from money received or held in trust, in respect of a dealing or trade for that person [s.25(1)(a) of the Real Estate Act]
  • On January 11, 2018, Ms. Jane Doe entered into a Services Agreement with a client to manage their 12-unit rental apartment property• in April 2018, Ms. Jane implemented a new accounting software, and notified clients asking them to review future monthly statements for errors
  • Problems occurred converting data to the new system, which caused errors in the recording and reporting of disbursements
  • As a result, Ms. Doe’s statements to her clients using the new system included missed or wrongly described disbursements and corrections for prior months’ errors
  • In January 2020, Ms. Jane’s client listed the property for sale• the client’s real estate associate asked for financial records of the property from Ms. Doe
  • Ms. Doe provided the records that included many of the above errors and corrections
  • These errors and corrections made it difficult to determine monthly costs associated with the property
  • Errors in the financial statements of disbursements for the property continued to occur from April 2018 through to January 2020
  • Ms. Doe corrected all the errors with the software system and it is now working properly

Learning Opportunity

  • Brokers must keep complete and accurate financial records of disbursements made from money received or held in trust. Failure to produce accurate financial records can make it difficult to determine monthly costs associated with the property and can put consumer funds held in trust at risk. In this case, the broker implemented a new accounting system that led to multiple errors in the recording and reporting of disbursements for the property over the course of two years.

Trust Money Disputes and Disbursements

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Jane Doe, Real estate associate registered with 4523024 Canada Inc. o/a Purplebricks

  • A real estate licensee must trade in real estate only in the name that appears on that individual’s licence, and in the name of the brokerage to which they are registered [s.53(a) of the Real Estate Act Rules]
  • Ms. Doe’s Instagram account displayed her own personal branding, but failed to indicate her registered brokerage name
  • Ms. Doe’s Facebook page failed to indicate her registered brokerage name
  • Ms. Doe was using a website that indicated Re/Max as her brokerage, but she was registered with another brokerage.

Learning Opportunity

  • Licensees must clearly indicate their brokerage name in all advertising. A brokerage name is “clearly indicated” when a reasonable consumer, under normal circumstances, can clearly distinguish the name of a brokerage in an advertisement. A reasonable consumer should be able to identify the brokerage based on the advertisement alone. In this case, the licensee misrepresented the brokerage they were registered with and advertised the wrong brokerage name. Licensees can only use the brokerage name they are registered with.

Advertising Guidelines

John Doe, Real estate associate registered at the time of conduct with Mountain View Real Estate Inc. o/a Re/Max Real Estate (Mountain View). Currently registered with IRealty Calgary Inc. o/a Re/Max Irealty Innovations.

  • Real estate licensees must provide competent service [s.41(b) of the Real Estate Act Rules]
  • On August 21, 2020, Mr. Doe had permission to access a property for the purpose of conducting a home inspection
  • Mr. Doe attended the property with the home inspector and buyers
  • Mr. Doe provided access to the property and remained at the property for half an hour
  • Mr. Doe left the property leaving the home inspector and buyers at the property alone
  • Mr. Doe did not get permission from the sellers to leave anyone unattended in the property

Learning Opportunity

  • When providing access for home inspections, licensees must remain on the property during the inspection unless otherwise agreed to, in writing, by the seller, and must properly secure the property once the inspection is complete. In this case, the licensee left the property, leaving the home inspector and the buyer clients in the property unattended without the seller’s written permission. Consumers expect licensees who are granted access to their property will remain in the care and control of that property at all times. Leaving anyone in a property unattended requires permission from the seller or the seller’s agent.

Access to Property – Home Inspections

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Jane Doe, Real Estate Associate registered with Excellence Real Estate Edmonton Ltd. o/a Re/Max Excellence

  • Real estate licensees must provide competent service [s.41(b) of the Real Estate Act Rules]
  • On September 16, 2020, Ms. Doe attended a condominium complex with her buyer clients to show them one of the units that was for sale
  • Ms. Doe had planned to show her clients unit 425 but had booked the showing for unit 112
  • Ms. Doe and her clients entered unit 425
  • The owner arrived home while Ms. Doe and her clients were in the unit
  • Ms. Doe was not authorized to be in that unit

Learning Opportunity

  • Licensees must ensure they exercise reasonable care and skill at all times when showing properties. Consumers must trust that licensees have taken the proper steps to gain access and permission to view properties. In this case, the licensee booked the wrong property to view with their clients, and when they arrived at the building, they entered the wrong property without permission, startling the property owners. This is a very serious matter. The licensee should have ensured they booked the correct property and were viewing the correct property before entering.

Access to Property – Competent Service

John Doe, Real estate associate registered with 4th Street Holdings Ltd. o/a Re/Max Real Estate (Central)

  • Real estate licensees must provide competent service [s.41(b) of the Real Estate Act Rules]
  • Mr. Doe represented the buyers interested in viewing a property
  • The seller was concerned about showing the property and directed prospective buyers to wear face masks, booties, and gloves
  • The seller’s agent made associates aware of this by posting the requirements for showings on Showing Time
  • A table was also set up at the front door with printed off pages showing the seller’s requirements
  • On October 10, 2020, Mr. John had permission to bring his buyers to view the property
  • Mr. John and the buyers entered the property not wearing masks
  • $1,500

Learning Opportunity

  • Licensees must exercise reasonable care and skill when a property is under their care and control. Licensees must ensure they obey the instructions of the seller when showing a property. It is of utmost importance to ensure licensees are not putting their clients’ health at risk or risk the health of any parties involved in the transaction. In this case, the licensee failed to follow the sellers viewing instructions while entering and showing their property. Property owners must have confidence their instructions will be followed. This is especially important during the COVID-19 pandemic which presents additional risk when individuals enter a property. Licensees are encouraged to use the COVID-19 property access checklists and agree to the conditions for access, in writing. Seller’s Condition to Access Premises Checklist Buyer’s Condition to View the Premises Checklist COVID-19 and Real Estate COVID-19 Information for Real Estate Consumers.

Licensee Responsibilities

  • During the COVID-19 Pandemic The seller’s representative bears primary responsibility to ensure buyer representatives are aware of the seller’s instructions regarding viewings during the COVID-19 pandemic. Be sure to convey those instructions, in writing, and it is best practice to receive signed confirmation those instructions are understood prior to scheduling the viewing.
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Administrative Penalties

John Doe, Real estate broker registered with 2 Percent Realty Inc. o/a 2% Realty

  • Real estate brokerages must prepare a monthly bank reconciliation of all trust accounts within 30 days of the prior month’s statement [s.86(1) of the Real Estate Act Rules]
  • Mr. Doe failed to prepare complete monthly bank reconciliations on multiple occasions between July 2020–February 2021
  • $1,000

Mr. John Doe, Real estate broker registered with 1983546 Alberta Ltd. o/a Re/Max Platinum Realty

  • A brokerage must complete bank reconciliations on all trust accounts within 30 days of their prior bank statement [s.86(1) of the Real Estate Act Rules]
  • Mr. Doe failed to prepare complete bank reconciliations for all accounts in which money is held in trust for the month ending September 30, 2020
  • $1,000

Learning Opportunity

  • Brokerages must complete bank reconciliations on a monthly basis which includes reconciling the trust liability for pooled trust accounts. This is a critical tool to effectively manage the brokerage trust accounts. This ensures the brokerage is meeting its trust obligations and helps identify potential trust shortages or other irregularities that require further investigation. In these cases, the brokers failed to complete monthly bank reconciliations for their trust accounts. Guide to Trust Assurance and Practice Review for Real Estate Licensees.

Trust Assurance and Practice Review Forms

Administrative Penalties

John Doe, Real estate broker registered with 1983546 Alberta Ltd. o/a Re/Max Platinum Realty

  • A broker must ensure that the business of the brokerage is carried out competently, and in accordance with the Real Estate Act [s.51(1)(d) of the Real Estate Act Rules]
  • In January 2021, RECA brought to Mr. Doe’s attention that bank reconciliations for the brokerage trust accounts for the month ending September 2020 were not completed as required by the legislation
  • Mr. Doe advised RECA that this was due to an error of an accountant that had been terminated
  • In January 2021, RECA brought to Mr. Doe’s attention there were $7,382.59 in a brokerage trust account that was not reconciled• Mr. Doe was questioned as to who the funds belonged to
  • As of April 1, 2021, Mr. Doe still had not reconciled this brokerage trust account
  • Mr. Doe had not accounted for or provided an answer to where the $7,382.59 funds were from
  • During an interview by an investigator, Mr. John blamed RECA for not following up on the inquiry into the brokerage trust account
  • $1,500

Learning Opportunity

  • Brokers are responsible for ensuring the business of the brokerage is carried out competently and according to the Rules. In this case, the licensee failed to take appropriate action to ensure this brokerage trust account was reconciled.

Brokers – Active in Brokerage Management

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Administrative Penalties

John Doe, Real estate associate registered at the time of conduct with Grand Realty & Management Ltd. o/a Grand Realty. Currently not licensed.

  • A person conducting an investigation may demand that any person answer any questions that are relevant to the investigation. A person who is required to answer the questions of a person conducting an investigation shall cooperate with the investigator [s.38(4)(a) of the Real Estate Act]
  • On September 3, 2020 Mr. John provided a statement to RECA relating to a complaint made to RECA regarding Mr. Doe
  • During Mr. Doe’s statement he identified another real estate licensee as the person who created and provided Mr. Doe with false employment records for his clients
  • Subsequently, the licence of the other licensee was suspended
  • On December 11, 2020, Mr. Doe provided an Affidavit to the Court of Queen’s Bench recanting his statement implicating the other licensee as being the provider of the false employment records
  • On January 8, 2021 an investigation was opened relating to Mr. Doe’s recanted statement
  • On February 10, 2021 a RECA investigator emailed Mr. Doe with dates to choose from to attend and answer questions with the investigator
  • On February 22, 2021, Mr. Doe responded via email stating his reluctance to attend an interview
  • On February 22, 2021, Mr. Doe was emailed by the investigator with new dates to attend an interview and answer the investigator’s questions
  • Mr. Doe failed to respond to that request
  • On February 26, 2021 Mr. Doe was sent, via email, written correspondence warning him that he had failed to cooperate with an investigation
  • The investigator requested Mr. John to attend an interview and answer the investigator’s questions
  • Mr. Doe failed to respond to that request
  • The letter advised Mr. Doe that a failure to cooperate could result in the Registrar suspending his licence or issuing an Administrative Penalty up to $25,000
  • Attached to the letter was a copy of s.38 of the Real Estate Act outlining RECA’s authority and Mr. John’s obligation to cooperate
  • On March 16, 2021, the investigator telephoned and left a voicemail for Mr. Doe to contact them to arrange a date for Mr. Doe to attend an interview and respond to questions
  • On March 21, 2021, Mr. Doe emailed the investigator and again re-iterated his displeasure with how RECA investigates complaints and questioned RECA’s authority
  • Mr. Doe stated he would present himself for interview when it can be shown where in the Real Estate Act it states RECA can collect dues from licensees and then defend complainants against licensees
  • On March 22, 2021, Mr. Doe was emailed again and supplied with the authority RECA has under s.38(1)(a) of the Real Estate Act to conduct investigations
  • Mr. Doe was again supplied with additional dates to present himself to the investigator to answer questions relating to the investigation
  • The deadline to respond was March 24, 2021
  • Mr. Doe failed to respond by that date
  • $5,000

Learning Opportunity

  • Licensees are required to cooperate with an investigation. Cooperation means providing truthful and complete responses in a timely and constructive manner. In this case, the licensee failed to cooperate with an investigator to meet to answer questions regarding an open investigation. The licensee was provided with multiple requests to meet and continually failed to respond to each request. This was a failure to cooperate with the investigator.

Guide to Investigations for Licensees

Administrative Penalties

John Doe, Real estate associate registered with Real Estate Professionals Inc.

  • A licensee must not, directly or indirectly, advertise or communicate an incentive except one that is provided by the brokerage to which they are registered [s.54(1)(d) of the Real Estate Act Rules]
  • Mr. Doe posted an advertisement on his website that stated “Once you become one of our VIP Buyers and we’ve helped you find the home that you want to purchase we will negotiate on your behalf to help, you purchase this home for at least $5,000 less than the listed asking price guaranteed or we will pay you $500 at the closing of your sale. These funds simply come from the commission we earn as a result of the closed sale. In most cases, the sale of a property in Alberta creates a small pool of funds set aside to handle the closing costs, legal fees, and Realtor fees. As one of the Realtors participating in the transaction, I can negotiate my fee at any time in the process and as such, I’m prepared to redirect $500 from our commissions so they are received by your lawyer at the closing.”
  • This incentive was not approved or authorized by Mr. John’s brokerage
  • $1,500
  • Jane Doe, Mortgage associate registered with Maximal Mortgages Inc. o/a Dominion Lending Centres Maximal Mortgages
  • A mortgage associate must not advertise incentives, unless the incentive is provided by their brokerage [s.70(1)(d) of the Real Estate Act Rules]
  • Ms. Doe posted an advertisement on her Facebook account that stated “There’s a New Superhero’s in town!! I’m excited to get to announce that I’ve come together with my friends and fellow business owners Lindsey Forget: Royal Lepage Network Realty & Cornerstone Flooring & Renovations to bring you “Your Purchase Plus Improvements Power Team”!!! Use all three of our services when you Purchase a Home that Needs Improvements & Receive a $500 Renovation Credit”
  • This incentive was not approved or authorized by Ms. Jane’s brokerage
  • On December 9, 2020, RECA advised Ms. Jane that she was under investigation for the above noted incentive
  • On December 12, 2020, Ms. Jane responded to questions asked by a RECA investigator and stated that she had removed the advertisement that included the above noted incentive and had reviewed the legislation and RECA Advertising Guidelines
  • In February 2021, Ms. Jane posted an advertisement on her Facebook account that stated “love is in the air share in the comments below a picture of you both and you’ll be entered in to win a free 1 hour massage with moon goddess body to soul massage therapy/manual lymph drainage specialist. Winner will be announced monday morning”
  • This incentive was not approved or authorized by Ms. Jane’s brokerage
  • $3,000
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Administrative Penalties

Jane Doe, Real estate associate registered with Royal LePage Network Realty Corp.

  • A licensee must not directly or indirectly, advertise or communicate an incentive except one that is provided by the brokerage to which they are registered [s.54(1)(d) of the Real Estate Act Rules]
  • Ms. Doe posted an advertisement on her Facebook account that stated “There’s a New Superhero’s in town!! I’m excited to get to announce that I’ve come together with my friends and fellow business owners Jane Doe: Royal Lepage Network Realty & Cornerstone Flooring & Renovations to bring you “Your Purchase Plus Improvements Power Team”!!! Use all three of our services when you Purchase a Home that Needs Improvements & Receive a $500 Renovation Credit”
  • This incentive was not approved or authorized by Ms. Jane’s brokerage
  • $1,500

Learning Opportunity

  • Only a brokerage can advertise incentives to the public. Licensees must not directly or indirectly, advertise, communicate or offer to any person their own incentives whose sole purpose is to attract business to them personally. An “incentive” is anything a brokerage advertises, communicates or offers to the public to attract business. Examples of incentives include travel miles, gifts, contests, gift certificates, games of chance or anything else of value. A brokerage incentive must be available to all clients or potential clients of a brokerage. In these cases, the licensees advertised incentives that had not been approved by their brokerage.

Incentives

Administrative Penalties

John Doe, Real estate associate registered with Century 21 All Stars Realty Ltd.

  • Real estate licensees must provide competent service [s.41(b) of the Real Estate Act Rules]
  • Mr. Doe’s buyer clients made an offer to purchase with a condition “This contract is subject to the buyer’s satisfaction with a property inspection conducted by a licensed home inspector. The seller will cooperate by providing access to the Property on reasonable terms.”
  • When it came time to book an inspection, the buyer told Mr. John they wanted to do the property inspection themselves
  • The buyer was not a licensed home inspector
  • Mr. Doe failed to alert his client that this was not consistent with what was agreed to in the purchase contract
  • Mr. Doe made no effort to negotiate or amend the property inspection condition to allow the property inspection to be done by the buyer
  • On August 21, 2020, Mr. John brought his buyer client to the property with the purpose of performing a home inspection
  • Mr. Doe did not request permission from the seller to have the buyer access the property for the purposes of the buyer doing a property inspection.
  • When the seller became aware of what happened, they found it unacceptable as this was a clear violation of the signed contract by all parties
  • $1,500

Learning Opportunity

  • Licensees must provide competent service to all of their clients. In this case, the licensee allowed the buyer to perform the home inspection of the property. The licensee also failed to inform the seller and receive the seller’s consent. Allowing the buyer to conduct the home inspection violated the terms of the signed purchase contract. Licensees have an obligation to provide clients with all relevant information, including when their requests would violate their purchase contract.

Access to Property – Home Inspections

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Administrative Penalties

Jane Doe, Real estate associate registered with Sterling Realty (Alberta) Ltd. o/a Sterling Real Estate

  • Real estate licensees must not direct, or delegate an unlicensed or unregistered assistant to perform tasks that must be performed by a licensee [s.46(2) of the Real Estate Act Rules]
  • On January 24, 2021, Ms. Jane had permission to show her buyer clients a property• Ms. Doe did not show the property herself
  • Ms. Doe arrived at the property and allowed her unlicensed assistant to access the property with three people
  • Ms. Doe remained outside the property in the car
  • The seller had a video camera capturing who entered their property
  • The listing associate contacted Ms. Doe about the showing, and Ms. Doe misrepresented important details about the showing, including how many people were present in the property and who conducted the showing
  • $3,000

Learning Opportunity

  • Licensees are responsible for the activities of any unlicensed assistants employed by them If the individual does not hold a licence with RECA they must not trade in real estate, which includes showing properties to prospective buyers. In this case, the associate should never have assigned tasks that require a licence. Licensees must act honestly and not make misleading statements. In this case, the licensee made misleading statements when questioned about the showing by the seller’s representative.

Assistants — Real Estate Brokerage

Administrative Penalties

John Doe, Mortgage broker registered at the time of conduct with City Best Mortgage Broker Inc. Currently registered as a mortgage associate with Enrich Mortgage Group o/a Mortgage Alliance – Enrich Mortgage Group.

  • A mortgage broker must ensure that the business of the brokerage is carried out competently and in accordance with the Act, the Bylaws, and Rules [s.67(1)(e) of the Real Estate Act Rules]
  • On July 1, 2018, Mr. Doe’s mortgage brokerage errors and omissions insurance expired
  • From July 1, 2018 to June 18, 2020, Mr. Doe’s mortgage brokerage failed to have insurance in place
  • During July 1, 2018 to June 18, 2020, Mr. Doe’sbrokerage continued to handle mortgage files without insurance
  • On June 18, 2020, Mr. Doe’s mortgage brokerage ceased operations
  • $1,500

Learning Opportunity

  • All mortgage brokerages are required to carry errors and omissions insurance. A mortgage broker must also ensure the business of the brokerage is carried out in accordance with the legislation. In this case, the broker’s brokerage did not have errors and omissions insurance for almost two years, and during that period the brokerage handled multiple mortgage files. The brokerage put their clients at risk as they were not protected by insurance.

Errors and Omissions Guidelines

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John Doe, Not licensed

  • No person shall trade in real estate without a licence [s.17(a) of the Real Estate Act]
  • In January 2021, Mr. Doe advertised on his Facebook account properties for rent on behalf of owners
  • Mr. Doe advertised using the company Forefront Properties Inc.
  • Mr. Doe was a Director of Forefront Properties Inc.
  • Mr. Doe collected rents and advertised properties for rent on behalf of an owner
  • These activities require a licence
  • Mr. Doe believed he was licensed to act as a property manager because he had completed some education through RECA
  • $1,000

Learning Opportunity

  • The Real Estate Act considers advertising property management services as property management, and authorization is required. In this case, Mr. John did not hold the authorization. Unlicensed persons who provide services that require a licence put consumers at serious risk. Unlicensed persons do not have the required education or errors and omissions insurance, and consumers working with unlicensed persons do not receive protection under the Real Estate Assurance Fund.

Suspension

John Doe Real – Real Estate License Suspension

  • On May 7, 2021, the Commercial Real Estate Broker and Commercial Property Manager Industry Council of the Real Estate Council of Alberta (RECA) suspended the real estate license of John Doe. Mr. Doe is not licensed to trade in real estate or provide property management services. The Commercial Real Estate Broker and Commercial Property Manager Industry Council determined it is in the public interest to temporarily suspend Mr. Doe. Allegations against Mr. Doe include:
  • There is a risk of harm to the public
  • Participating in fraudulent and/or reckless behaviour with risk that fraudulent and/or reckless conduct will continue
  • Mr. Doe was previously suspended for similar behaviour, yet continued to engage in similar conduct
  • The conduct was not an isolated incident
  • Engaging in conduct that undermined public confidence in the industry, harmed the integrity of the industry, or brought the industry into disrepute Mr. Doe’s license will remain suspended until the current proceedings under Part 3 of the Real Estate Act concerning his conduct are completed. Mr. Doe was most recently registered as a real estate associate with Lampas Holdings Ltd. o/a Re/Max River City.
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