For the RECOrd Fall 2010

Registrants must safeguard confidential information
I
t’s common for registrants to become privy to a wealth of
personal information about their clients. It becomes, to a great
extent, a relationship built on trust.
But with that trust comes responsibility. The results of an audit,
released by the Office of the Privacy Commission of Canada (OPC)
this past June, calls on mortgage brokers to ensure their practices
are adequately safeguarding personal information. This is
something that all real estate professionals should be concerned
with.
The release of information from the OPC audit follows a string of
incidents – 14 in the space of a few months in mid-2008 – where
the privacy commission was notified of breaches involving the
personal information of hundreds of people. According to a
statement released by the OPC, “someone impersonating an
experienced mortgage agent downloaded credit reports for
people who hadn’t even applied for a mortgage.”
In order to safeguard information, the privacy commission
recommends adequate physical measures are in place, such as
alarms and lockable filing cabinets.
Registrants should be aware of RECO’s rules where they pertain
to unprofessionalism and a registrant’s best efforts to prevent
error.
RECO’s Code of Ethics – specifically Reg. 580/05 of the Real Estate
and Business Brokers Act, 2002 – deals with unprofessional
behavior.
S.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.
S.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.
S.41 A brokerage shall ensure that every salesperson and broker
that the brokerage employs is carrying out their duties in
compliance with this Regulation. A broker of record shall ensure
that the brokerage complies with this Regulation.
In one case investigated by RECO, a registrant was disciplined for
failing to properly protect a client’s personal information. A
visitor to the brokerage was able to access the client’s
information from the registrant, using it to present himself as
someone else to bank officials in order to get financing. The
registrant was fined and put on probation. The brokerage was
also fined.
Education Corner
New broker course to be launched for early next year
M
anaging a brokerage is no easy task. That’s why RECO is
taking steps to better equip registrants for the
challenges and accountabilities that come with running
a business that facilitates some of the largest transactions
consumers will ever make.
In early 2011, RECO will be introducing an updated broker course
to replace the current program. It will follow a similar interactive
structure as the newly-revamped RECO Update course with case
studies and simulation activities. “Salespersons who want to
become brokers already have experience; they already know
how to sell a property. The new course will reinforce the
accountabilities and new legislated responsibilities brokers
obtain when they hold this registration status,” says Lisa Key,
who is leading the development of the course at RECO. “Besides
updating the real estate content, we will focus on developing
business acumen skills and financial intelligence.”
Page 2
A great deal of research is going into the development of this
new course. “We’ve examined broker education offerings in
other jurisdictions in Canada and the US to identify best practices;
we’ve also sought out input from current practising brokers,” she
says.
Existing brokers who are interested in taking advantage of this
new course offering should note that they will be able to claim
26 continuing education credits - 18 that can be used for the
current registration cycle plus eight that can be carried forward
to the next registration cycle.
The course will continue to be offered only through OREA Real
Estate College. You’ll still be able to choose a study method that
works best with your schedule: a combination of e-learning and
classroom instruction, correspondence and classroom instruction
or 100 per cent classroom instruction, and pre-requisites will
remain the same. To view pre-requisite information visit OREA’s
website www.orea.com.
Fall 2010
Inheriting contracts or leases
Indicate how and when buyers will assume rental contracts
A
ssuming contracts or existing financial obligations can be
a confusing topic for buyers and sellers. It can spark
questions about buy-out and replacement options, the
fees associated with this process and who is responsible for any
charges.
Under section 21 of the Code of Ethics, you are required to take
reasonable steps to determine the material facts relating to the
buying or selling of a property and disclose any findings to buyers
and sellers. This includes disclosing financial expenses and
contracts that buyers would be obligated to pay over and above
the purchase price once they acquire the property.
The agreement of purchase and sale (APS) contains a provision
for specifying chattels, fixtures and rental items included in the
transaction. Appliances and systems such as (but not limited to)
hot water tanks, water softeners, alarm systems, furnaces, air
conditioners and even their duct work may be rented, leased or
even financed.
In some cases, shared operating costs attached to parcels of tied
land (POTL) need to be considered and disclosed on the APS
Fall 2010
including roadways, shared wells, sewage and water systems and
recreational facilities such as a golf course, park or recreation
centre.
It is a good idea to contact service providers to determine what
measures need to be taken for a smooth and easy transfer of
contract from seller to buyer. Explain to buyers how and when
contracts are transferred to the new owner and document on
the APS who will notify the service provider and who will pay any
charges associated with the transfer.
When completing an agreement of purchase and sale:
1.Take the time to confirm in writing with the homeowner or
listing brokerage that all the rented, leased or financed items
that need to be included in the APS are in fact there.
2.Explain to buyers that they may have to carry on the rental
contract or modify the agreement of purchase and sale to
remove their responsibility to continue the contract.
3.Contact the service provider of the rented, leased or financed
item to find out the steps that need to be taken to assume or
pay-out the contract.
Page 3
From contracts to the courtroom
Inside the legal department at RECO
A
month ago, the Real Estate Council of Ontario’s legal
team successfully argued for jail time against a Barrie area
man, who defrauded investors of nearly $90,000, for
trading in real estate while unregistered. The man was sentenced
to 15 months in jail, two years probation and ordered to pay
restitution.
A few months earlier, that same team helped convict a former
registrant for failing to deposit trust money into a real estate
trust account. That case resulted in a year in jail and fines
amounting to $200,000.
In both cases, more than a year had passed between the dates of
the infractions and the sentencing dates, requiring months of
‘behind-the-scenes’ work . But it represents only a fraction of
what takes place within the walls of RECO’s legal department.
Drafting contracts, advising managers, staff and the Registrar,
and making court appearances – all in the pursuit of RECO’s goal
to uphold integrity and foster confidence in Ontario’s real estate
industry – is more than enough to keep the department hopping.
At times, it can be difficult to hold a staff meeting where the
entire team can get together, says Elizabeth Silcox, RECO’s
manager of legal services.
Inside her office, her desk, table and just about any flat surface is
piled high with papers. Yet still, she often takes calls from both
registrants and consumers who are confused as to the role of
RECO’s legal department.
Page 4
In some cases, the calls come from registrants who have possibly
crossed a legal line who think RECO’s lawyers are there to help
them. Other times, the calls come from consumers who feel
they’ve been crossed in some way by a registrant, and they want
legal representation to fight back. But the legal department isn’t
there for them, she says. And it can’t even recommend a lawyer
for them to call. Instead, she tells them to turn to friends or
colleagues for referrals.
When people are charged with offences that fall under the Real
Estate and Business Brokers Act, 2002 (REBBA 2002), the legal
department is there to represent the Registrar, she says, whether
it’s in court, in front of a License Appeal Tribunal or in appeal
situations. But it may also be called on to look at equipment
contracts at RECO, at employment contracts, or at sections of
REBBA 2002 that need to be interpreted.
How RECO’s legal department helps:
• By advising RECO and the Registrar to carry out and
perform their powers and duties under REBBA 2002 in a
manner consistent with the objective and principle of
ensuring a fair, safe and informed marketplace that
supports a competitive economy.
How RECO’s legal department cannot help you:
• With legal representation or advice, whether you are a
registrant or consumer.
Fall 2010
Broker of Record Corner
Co-operating brokerages required to
disclose their commissions
M
ichael* was offered a promotion within his organization
that required him to relocate to Australia. He only had a
short period of time to organize his affairs before taking
on this new role. Michael wanted to sell his house in Toronto
before he moved across the world.
He worked with his listing brokerage to set up an attractive
commission plus bonus to any co-operating brokerage that could
bring in a buyer and complete the transaction within six weeks.
The attractive offer worked, Michael’s house sold and closed five
and a half weeks later.
RECO occasionally receives inquiries about co-operating brokerage
commissions. The Real Estate and Business Brokers Act, 2002
(REBBA 2002) contains specific wording that outlines how
commission or remuneration should be paid to a brokerage from
a consumer.
REBBA 2002 indicates that “All commission or other remuneration
payable to a brokerage in respect of a trade in real estate shall be
either an agreed amount or percentage of the sale price or rental
price, as the case may be, but not both...” S.36.1 Act.
So how can Michael’s brokerage offer a commission percentage,
plus a dollar amount bonus to a co-operating brokerage? The
answer lies in how the listing agreement is structured from a
commission perspective.
If the seller agrees to pay the listing brokerage a $10,000 flat
commission, the listing brokerage can pay the co-operating
brokerage a percentage of the sale price plus a bonus as long as
the total remuneration comes out of the commission that is paid
to the listing brokerage by the seller.
Commission or other remuneration paid to a brokerage by a
consumer can only be an agreed amount, or percentage of the
sale/rental price – not both. The co-operating brokerage’s
commission is considered an offer from the listing brokerage, paid
by the listing brokerage, and is not subject to the restriction under
REBBA 2002.
It is also important to keep in mind that co-operating brokerages
are required to disclose to buyers the amount of commission they
will receive.
In Michael’s situation, the co-operating brokerage would have
had to notify the buyer that it would receive a bonus if the deal
sold and closed within six months of being listed.
For more information on commissions and remuneration, review
section 36 of the Act. You can access an Interactive Guide to REBBA
2002 from RECO’s website www.reco.on.ca. You can also view
RECO’s Registrar’s Bulletin on commissions by clicking on the
Publications and Resources tab located at the top of RECO’s home
page.
*The scenario described in this article is fictional and used for
information purposes only.
Fall 2010
Page 5
Advertising Matters
Written consent required for advertising sold properties
A
fter months of searching for the perfect home, Anna
and Mark† finally found it. They were delighted with
their new home and with the service of their real
estate salesperson. A few weeks later, Anna and Mark learned
that their new home had been highlighted in a large
advertisement published in a popular national newspaper.
The advertisement contained private information from their
agreement of purchase and sale including the selling price,
terms, address and other particulars of their new property.
At no time before the publication had Anna and Mark
provided their consent to share any information regarding
the purchase of their home with the public. Furthermore,
during their search for a home, they had been assured on a
number of occasions of privacy laws that protected their
privacy. Anna filed a complaint with RECO.
Upon learning about the complaint, the sales representative
who represented the seller contacted Anna to apologize and
took full blame for this mistake.
RECO conducted a thorough investigation. It was found that
the seller’s real estate salesperson was in violation of several
areas of the Code of Ethics under REBBA 2002 including:
2. (1) A broker or salesperson shall not do or omit to do
anything that causes the brokerage that employs the
broker or salesperson to contravene this Regulation.
4. A registrant shall promote and protect the best interests
of the registrant’s clients.
36. (8) A registrant shall not include anything in an
advertisement that could reasonably be used to identify
specific real estate unless the owner of the real estate has
consented in writing.
Page 6
36. (9) A registrant shall not include anything in an
advertisement that could reasonably be used to
determine any of the contents of an agreement that
deals with the conveyance of an interest in real estate,
including any provision of the agreement relating to the
price, unless the parties to the agreement have consented
in writing.
The salesperson was ordered to pay a penalty of $8,000.
When advertising that a property is sold you may not include
anything in an advertisement that could reasonably be used
to:
• identify the people associated with the real estate
transaction unless they have consented in writing S.36.(7)
• identify the specific real estate unless the owner of the
real estate has consented in writing S.36.(8)
• identify any of the contents of an agreement in a real
estate transaction including any provision that relates to
the price or terms unless the parties to the agreement
have consented in writing S.36.(9)
Determining whose consent to seek - the buyer or the seller
- depends on:
when the advertisement is distributed
2. who creates the advertisement (the brokerage
1.
representing the buyer or the brokerage representing the
seller). Remember, when needing to contact someone
represented by another brokerage you must obtain that
registrant’s written consent to do so. S.7. Code
continued... page 7
Fall 2010
Whose consent do you need before advertising that a property is sold?
Scenario
Seller’s brokerage* wants to advertise that a property is sold when the transaction isn’t completed.
Seller’s written consent is required
Seller’s brokerage wants to advertise that a property is sold when the transaction is completed.
Buyer’s written consent is required.
Buyer’s brokerage wants to advertise that a property is sold when the transaction is not completed.
Both the buyer’s and seller’s written
consent are required
Buyer’s brokerage wants to advertise that a property is sold when the transaction is completed.
Buyer’s written consent is required
* All real estate advertisements are brokerage advertisements.
Whose consent do you need when advertising the picture, price or terms of an agreement?
Scenario
The transaction isn’t completed. The buyer’s brokerage or seller’s brokerage wants to advertise that
a property is sold and include the picture, price and/or terms of the agreement.
Both the buyer’s and seller’s written
consent are required
The transaction is completed. The buyer’s brokerage or seller’s brokerage wants to advertise that a
property is sold and include the picture, price and/or terms of the agreement.
Buyer’s written consent is required
†The information provided in this article is based on an actual discipline hearing that was dealt with by RECO. Anna and Mark
are fictitious names used to protect the identity of the complainants. You can review this and other RECO discipline decisions
by visiting the Complaints and Enforcement section of RECO’s website.
If you have any advertising-related questions that you’d like to see featured in Advertising Matters please e-mail
communications@reco.on.ca.
Fall 2010
Page 7
Fraudulent behaviour led to refusal of registration
Divisional court upholds tribunal decision
I
n June of this year, an Ontario Divisional
Court upheld a Proposal by the Registrar
of the Real Estate Council of Ontario –
as well as a decision by the Licence Appeal
Tribunal – refusing to renew the
registration of a former broker who
profited from mortgage fraud.
Alan Chang, who accepted approximately
$150,000 for his part in a Hamilton-based
multi-million dollar mortgage fraud
conspiracy, had argued the decision to
refuse renewal of his registration was
excessive in light of his co-operation in the
subsequent investigation. He was seeking
a more lenient penalty.
On March 13, 2009, the Registrar issued a
Proposal to refuse to renew the broker
registration of Mr. Chang. At the time, Mr.
Chang was a 62-year-old real estate
broker and property appraiser with nearly
26 years of real estate business experience.
The Registrar issued the Proposal after
determining that from December 2003 to
July 2006, Mr. Chang – acting as a real
estate broker and property appraiser –
made 21 false appraisals of properties in
Hamilton. Relying on the false appraisals,
the Royal Bank of Canada lent mortgages
well in excess of the fair market value of
the properties. For his efforts, Mr. Chang
personally
profited
approximately
$150,000 as part of the conspiracy
involving 33 properties in total.
After he was served with court papers by
the bank, Mr. Chang followed his lawyer’s
advice to co-operate with the
investigation and prosecution of his coconspirators. His co-operation assisted in
the resolution of civil litigation, the
advancement of criminal prosecution, and
Page 8
included his payment of damages to the
bank in excess of the profits he made from
his participation in the scheme.
The Registrar’s Proposal was based on
S.10(1)(a)(ii) of the Act, specifically that Mr.
Chang’s past conduct established
reasonable grounds to believe that he
would not carry on business in accordance
with law and with integrity and honesty.
Mr. Chang appealed the Registrar’s
Proposal to the Licence Appeal Tribunal.
The Tribunal held a hearing into his
appeal Nov. 23 and 24, 2009.
At the outset of the hearing, Mr. Chang –
through his lawyer – admitted to all of the
particulars alleged in the Proposal. As a
result of his admissions, the Tribunal only
heard evidence from Mr. Chang and one
of his lawyers.
The parties’ arguments were focused on
the determination of the appropriate
penalty in light of Mr. Chang’s admission
of wrongdoing. In an effort to avoid the
loss of his registration, Mr. Chang relied on
his unblemished years of experience in the
real estate industry, emphasized that he
had co-operated with the bank’s
investigators and asserted that although
he had been pulled into the conspiracy, he
recognized the error of his conduct and
should not lose his ability to trade in real
estate.
In support of the Proposal, RECO’s lawyer
emphasized that the lengthy period of
fraudulent behaviour outweighed all
other factors in the case and that refusal
of registration was the only reasonable
response to the significance of Mr.
Chang’s misconduct.
The Tribunal considered all the elements
of Mr. Chang’s argument for leniency and
focused their considerations on his efforts
to unravel the scheme he was
fundamental in creating and his cooperation in the prosecution of his
co-conspirators.
The Tribunal concluded that Mr. Chang’s
exercise in prudence in co-operating in the
face of irrefutable evidence was not
indicative of rehabilitation and a
fundamental acceptance of the wrongful
nature of his actions, but rather the result
of him having suffered the consequences
of his actions. The Tribunal stressed that in
order to once again place the public’s trust
in Mr. Chang, he needs to demonstrate
significant rehabilitation to satisfy the
Tribunal that he was worthy of the
public’s confidence that he would act in
accordance with the law and with
integrity and honesty. The Tribunal upheld
the Proposal and ordered the Registrar to
refuse to renew Mr. Chang’s registration
as a real estate broker.
Mr. Chang appealed the decision of the
Tribunal to the Divisional Court of Ontario
asserting that the Tribunal erred in law in
failing to explain why a lesser penalty
than refusal of registration was not
appropriate and that the Tribunal erred in
law by taking a negative inference from
the fact that Mr. Chang exercised his right
to retain counsel and remain silent at the
outset of the bank’s investigation.
On May 4, 2010, the Divisional Court of
Ontario heard Mr. Chang’s appeal of the
Tribunal’s decision. In extensive reasons
released on June 23, 2010, the court
dismissed his appeal and upheld the
Tribunal’s decision to refuse to renew his
registration.
Fall 2010
Regulatory Activities
U
nder the Real Estate and Business Brokers Act, 2002 (REBBA 2002), the Registrar is required to make certain information
available to the public. The information required to be made publicly available includes Notices of Proposal, convictions,
and charges. In addition, under REBBA 2002, the Discipline and Appeals Committees require that discipline and appeals
decisions be made publicly available. For detailed information about these matters, or to view RECO’s Public Notice Policy, please
visit the Complaints & Enforcement section of RECO’s website.
Registrar’s Proposals
The Registrar has the authority to refuse, refuse to renew, revoke, suspend, or apply conditions to registration. In such situations,
the Registrar prepares a Notice of Proposal and notifies the applicant or registrant of that Proposal together with reasons for the
Registrar taking such action. A registrant who has received a Notice of Proposal has 15 days from the date the Proposal is served
to file a notice of appeal to the Licence Appeal Tribunal (LAT). If no appeal is received by LAT, the Registrar may carry out the Notice
of Proposal.
YEUN HUANG CHIU
Toronto, ON
Sept. 15, 2010
On Aug. 27, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Yeun Huang Chiu. Mr. Chiu did not
appeal at the Licence Appeal Tribunal. His registration was
revoked.
GOLDEN LAND REALTY INC.
Toronto, ON
Sept. 15, 2010
On Aug. 27, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Golden Land Realty Inc. Golden Land
Realty Inc. did not appeal at the Licence Appeal Tribunal. Its
registration was revoked.
BRADLEY LOTZ
Stratford, ON
Sept. 13, 2010
On Aug. 10, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Bradley Lotz. Mr. Lotz did not appeal
at the Licence Appeal Tribunal. His registration was revoked.
ARTURO PERALTA
London, ON
Aug. 25, 2010
On Nov. 23, 2009, the Registrar issued a Notice of Proposal to
revoke the registration of Arturo Peralta. Mr. Peralta requested
a hearing in front of the Licence Appeal Tribunal. After a
hearing, the Licence Appeal Tribunal ordered the Registrar to
revoke the registration of Mr. Peralta.
ANTON JEEVA ARULAPPU
Markham, ON
Aug. 11, 2010
On Jan. 20, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Anton Jeeva Arulappu. Mr. Arulappu
requested a hearing in front of the Licence Appeal Tribunal.
After a hearing, the Licence Appeal Tribunal ordered the
Registrar to revoke the registration of Mr. Arulappu.
Fall 2010
HOOKEUN JO
London, ON
July 28, 2010
On June 22, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Hookeun Jo. Mr. Jo did not request a
hearing in front of the Licence Appeal Tribunal. His registration
was revoked.
RAVINDER TULSIANI
Brampton, ON
July 26, 2010
On June 30, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Ravinder Tulsiani. Mr. Tulsiani did not
request a hearing in front of the Licence Appeal Tribunal. His
registration was revoked.
CKUMAR (TIM) RAJKUMAR
Toronto, ON
May 21, 2010
On Nov. 13, 2009, the Registrar issued a Notice of Proposal to
revoke the registration of Ckumar (Tim) Rajkumar. Mr. Rajkumar
requested a hearing in front of the Licence Appeal Tribunal.
After a hearing, the Licence Appeal Tribunal ordered the
Registrar to revoke the registration of Mr. Rajkumar. The Licence
Appeal Tribunal Order is under Appeal at the Divisional Court.
GURPAL SINGH BHALLA
Woodbridge, ON
May 13, 2010
On April 7, 2010, the Registrar issued a Notice of Proposal to
revoke the registration of Gurpal Singh Bhalla. Mr. Bhalla did
not request a hearing in front of the Licence Appeal Tribunal.
His registration was revoked.
continued... page 10
Page 9
Regulatory Activities continued from... page 9
Convictions
T
he Ontario Provincial Offences Act (POA) governs how charges are processed and prosecuted in Ontario courts. The POA applies
to all Ontario statutes and regulations, including REBBA 2002. Individuals found guilty of offences under REBBA 2002 are
subject to fines up to $50,000 and a potential prison term of two years. Corporations found guilty of offences are subject to
fines up to $250,000. Courts have the power to order convicted persons to pay compensation and make restitution.
Individuals may also be subject to a victim fine surcharge, in addition to the specified fine, pursuant to section 60.1 of the POA. The
surcharge is collected by the court and goes in to the province’s Victim Justice Fund account. For more information, please visit
www.ontariocourts.on.ca.
DAVID SETO
Toronto, ON
On Nov. 9, 2009, David Seto pleaded guilty to eight counts of
failing to ensure that his brokerage, RE/MAX Executive Realty
Inc. (1996), properly deposited trust money into its trust account.
On Feb. 22, 2010, Mr. Seto was sentenced to one year
incarceration on those eight counts. This sentence was upheld by
the Appeal Court on Sept. 15, 2010.
RE/MAX EXECUTIVE REALTY INC. (1996)
Toronto, ON
On Nov. 9, 2009, David Seto on behalf of RE/MAX Executive
Realty Inc. (1996) pleaded guilty to eight counts of failing to
deposit trust funds into a trust account. On Feb. 22, 2010,
RE/MAX Executive Realty Inc. (1996) was sentenced to a fine of
$20,000 per count, for a total fine of $200,000, inclusive of a
$40,000 victim fine surcharge.
HARVEY GOLDMINTZ
Collingwood, ON
On Sept. 14, 2010, the acquittal of Harvey Goldmintz was
overturned, and he was found guilty of two counts of trading
in real estate without being registered as a broker.
1560719 ONTARIO CORPORATION OPERATING AS BLUE
MOUNTAIN CHALETS
Collingwood, ON
On Sept. 14, 2010, the acquittal of 1560719 Ontario Corporation
operating as Blue Mountain Chalets was overturned, and it was
found guilty of two counts of trading in real estate without
being registered as a broker.
TERRY D. GRAHAM
Alliston, ON
On April 28, 2010, Terry D. Graham pleaded guilty to eight
counts of trading in real estate while unregistered and eight
counts of failing to deposit trust funds in a trust account. On
Aug. 24, 2010 Mr. Graham was sentenced in respect of these
convictions. He was sentenced to 15 months in jail. He was
ordered to pay restitution in response to the prosecution’s
submission of $89, 999.66 in consumer loss. He was also placed
on probation for two years.
RAMANAN ANANDAPPA
Stouffville, ON
On Aug. 9, 2010, Ramanan Anandappa pleaded guilty to one
count of furnishing false information on an application. He was
fined a total of $4,500.
RAVINDER TULSIANI
Brampton, ON
On Aug. 10, 2010, Ravinder Tulsiani pleaded guilty to one count
of furnishing false information on an application. Mr. Tulsiani
was fined $3,000.
CHRISTIAN FORAGE
Mississauga, ON
On Aug. 10, 2010, Christian Forage, in the capacity of broker of
record of Binswanger, Forage Real Estate Services Inc., pleaded
guilty to one count of failing to ensure the brokerage complied
with the Act. Mr. Forage was ordered to pay restitution of
$10,000, was fined $2,500 and placed on 12 months probation.
BINSWANGER, FORAGE REAL ESTATE SERVICES INC.
Mississauga, ON
On Aug. 10, 2010, Christian Forage, in the capacity of
Binswanger, Forage Real Estate Services Inc., pleaded guilty to
one count of failing to ensure the brokerage complied with the
Act. The said brokerage was fined $2,500.
GORDON SIMPSON
Brampton, ON
On Aug. 4, 2010, Mr. Gordon Simpson pleaded guilty to two
counts for failing to deliver a copy of the agreement. He was
fined $3,000 per count for a total of $6,000.
SHAN (JEFF) XU
Ottawa, ON
On July 9, 2010 Shan (Jeff) Xu was found guilty of one count of
furnishing false information in an application for registration
and two counts of failing to disclose convictions to brokerages
that were his prospective employer. Mr. Xu was fined $25,000
per count, for a total of $75,000.
JENNIFER D’ANDRADE
Toronto, ON
On June 14, 2010, Jennifer D’Andrade pleaded guilty to one
count for furnishing false information in an application for
renewal. She was fined $1,500, plus a victim fine surcharge.
continued... page 11
Page 10
Fall 2010
Regulatory Activities
Convictions
continued from... page 10
VALERIA DAVIES
Marmora, ON
On May 18, 2010 Valeria Davies, as broker of record, pleaded
guilty to three counts for failing to ensure that the brokerage
complied with the Act. Ms. Davies was fined $175 for each
count, for a total of $525.
RE/MAX HARMONY REALTY LTD.
Marmora, ON
On May 18, 2010 Valeria Davies, as broker of record of RE/MAX
Harmony Realty Ltd. pleaded guilty to one count for breach of
real estate trust account, one count for failing to prepare a real
estate trust account reconciliation statement, and one count of
failing to record disbursement particulars on a Trade Record
sheet. The said brokerage was fined $175 for each count, for a
total of $525.
AMY CREIGHTON
Carleton Place, ON
On April 16, 2010, Amy Creighton pleaded guilty to three counts
for failing to ensure that the brokerage complied with the Act.
She was fined $2,500 per count for a total of $7,500 plus a victim
fine surcharge.
CENTURY 21 CARLETON REALTY INC.
Carleton Place, ON
On April 16, 2010, Amy Creighton, on behalf of Century 21
Carleton Realty Inc., pleaded guilty to failing to prepare a trust
account reconciliation, failing to maintain a trust ledger and
making an unauthorized disbursement from the trust account.
The said brokerage received a suspended sentence.
VINCENT FORMOSI
Hamilton, ON
On April 13, 2010, Vincent Formosi was found guilty of accepting
remuneration for trading in real estate from a person other than
the brokerage that employed him. He was fined $5,000. He
was also ordered to pay restitution of $10,000.
BENNY ROMANO
Toronto, ON
On April 6, 2010, Benny Romano pleaded guilty to three counts
of failing to ensure that his brokerage complied with the Act
and one count of failure to review, sign and date a trust account
reconciliation statement. He was fined $4,000 per count for a
total of $16,000 plus a $4,000 victim fine surcharge.
ROYAL VIEW ROMANO REAL ESTATE SERVICES LTD.
Woodbridge, ON
On April 6, 2010, Benny Romano, on behalf of Royal View
Romano Real Estate Services Ltd., pleaded guilty to one count of
failing to immediately deposit funds into the trust account to
eliminate a shortfall, one count for failing to prepare a monthly
trust account reconciliation and one count of employing an
unregistered person to trade in real estate. The brokerage was
fined a total of $13,000 plus a $3,250 victim fine surcharge.
Fall 2010
RECO welcomes new
Deputy Registrar
B
ruce Matthews, former
Deputy Registrar for
Professional Engineers
Ontario (PEO), has joined the
Real
Estate
Council
of
Ontario as its newest Deputy
Registrar.
Mr. Matthews, who has been
working at RECO since early
September,
says
he’s
impressed with RECO’s record
when it comes to regulatory
compliance
and
looks
forward to the challenges
ahead of him in this position.
As RECO’s Deputy Registrar,
Regulatory Compliance, he
oversees the Complaints, Compliance and Discipline
and the Inspections and Investigations departments
while ensuring that the requirements of the Real Estate
and Business Brokers Act, 2002 and RECO’s policies are
interpreted and applied in a consistent fashion.
Mr. Matthews holds a Bachelor of Applied Science
degree in Systems Design Engineering from the
University of Waterloo and a Building Science
Certificate from the University of Toronto. Since 2000,
he had been employed by PEO, the regulatory body for
the engineering profession operating under the
Professional Engineers Act. Starting as an investigator,
he became Manager of Complaints & Discipline in 2003,
and since June 2008 was Deputy Registrar, Regulatory
Compliance.
In that capacity, he oversaw the investigation and
prosecution of complaints against professional
engineers, and directed the prosecution of individuals
engaged in unlicensed engineering practice. He was
responsible for PEO’s Alternative Dispute Resolution
and Fees Mediation processes, and served as staff
liaison
to
the
Complaints
and
Enforcement
Committees.
Since 2007, Mr. Matthews has been on the Board of
Directors of CLEAR (the Council on Licensure,
Enforcement and Regulation), currently in the position
of President-Elect. He has been active in CLEAR’s
Professional Discipline and Board Member Training
committees and has made several presentations at
CLEAR conferences.
Page 11
Ask the Registrar
Dealing with unclaimed money in a real estate trust account
Y
ou’ve checked your records and you find there is trust
money in your brokerage’s real estate trust account that’s
been “unclaimed” for two years. What do you do?
The Real Estate Business Brokers Act, 2002 (REBBA 2002) requires
you to turn it over to RECO. Deposits can be combined on one
cheque payable to RECO. The funds are held by RECO for a
maximum of five years if not claimed. RECO must pay the funds
to the provincial Finance Ministry within one year after it has
been held for the five-year period, as per S.27 (11) of REBBA
2002.
For clarification, refer to the Registrar’s Bulletin on RECO’s
website. It can be found under the Publications and Resources
tab. You may also want to review S.27 (4) and 27 (5) of the Act for
more detailed instructions.
If the trust money in question was held in an interest bearing
account, the unclaimed money paid to RECO will include both
the original trust deposit and any interest accrued to the original
trust monies up until the time those monies are paid out to RECO.
For trust money in excess of $500, you must provide RECO with
proof of notice in a local newspaper on one occasion in the area
in which the person entitled to payment of the trust monies was
last known to have resided or carried on business. The notice
must have gone unanswered for at least six months. A single
insertion is sufficient and a copy of the notice must be provided.
Brokerages should place the advertisement as soon as other
attempts to locate the person have been unsuccessful.
Trust money is defined as “unclaimed” if:
• a brokerage has held it in trust for two years and has not been able to determine who is entitled to the money.
• a brokerage has held the money in trust for one year after the entitled person was first determined and the person
cannot be located.
In Memoriam - David Joseph Rossi
R
ECO’s board of directors and staff are
mourning the loss of well-known and
respected Toronto real estate broker
David Rossi who died Sept. 17 after a battle
with leukemia.
Mr. Rossi was an industry leader and
visionary who played a key role in the
establishment of the Real Estate Council of
Ontario (RECO). Not only was he a founding director of RECO but
he was also the driving force behind the creation of RECO’s Code
of Ethics.
Mr. Rossi was elected to the Board for three terms and served as
Vice Chair from 2001 – 2002 and Board Chair from 2002 – 2003.
Do you have any comments or inquiries about For the RECOrd
newsletter? Please send them to: communications@reco.on.ca.
Real Estate Council Of Ontario
3250 Bloor Street West, Suite 600, East Tower,Toronto, Ontario M8X 2X9
Tel: 416-207-4800
Toll-Free: 1-800-245-6910
Fax: 416-207-4820
He led numerous RECO Committees and Working Groups and
leaves a legacy of RECO firsts.
He told a magazine writer several years ago that chairing RECO’s
ethics committee was “one of my most cherished roles, to actually
develop with a group of very knowledgeable people, a Code of
Ethics that lives on.”
Mr. Rossi’s spirit, passion for life and great integrity will also
continue to live on among all who had the privilege of knowing
and working with him.
Dave Rossi is survived by his wife, Aleksandra, and children
Michael, Mathew and Joseph, and grandchildren Nicholas and
Ava. He is also survived by his brother Anthony and many nieces
and nephews.
Return undeliverable Canadian addresses to:
Real Estate Council Of Ontario
3250 Bloor Street West, Suite 600, East Tower,
Toronto, Ontario, Canada M8X 2X9
PM #40041338
Disclaimer: While RECO makes every effort to ensure that the
information in this publication is current and accurate, RECO does not
warrant or guarantee that it will be free of errors. The information
contained in this publication is not intended to cover all situations. It is
general information only and users/readers are encouraged to seek their
own independent advice for particular fact situations.
Page 12
Fall 2010