Lethbridge real estate agent fined $24,000 by Real Estate Council of Alberta

The RECA oversees all real estate agents in Alberta, all provincial mortgage brokers, and real estate appraisers. The organization’s mandate is to protect the public, and to create a regulated environment that people can trust.

He says the organization can hold disciplinary hearings for complaints that come in either from the public or from anyone else. If necessary, fines or administrative penalties are levied, or if conduct has been found to breach Real Estate Act rules- for more serious matters, it can go to a hearing, which can result in things like the suspension of their license, mandatory education, or fines.

A summary (as it appears in the RECA July case summaries) of the three offences levied against Lyons are as follows:

1) Before eliciting or as soon as possible upon receiving confidential information from any person concerning that person’s real estate needs, motivation, financial qualifications or in any event before entering into a service agreement, an industry member must disclose in writing to that person whether the industry member is acting in the trade or anticipated trade on behalf of any other person, in any capacity [s.55(1) of the Real Estate Act Rules] • Mr. Lyons acted as a representative in a real estate transaction for both the buyer and the sellers of the property • Mr. Lyons informed the sellers he had buyers • Mr. Lyons negotiated with both parties and the transaction was completed • Mr. Lyons did not disclose in writing to any of the parties the nature of the services he was providing, or on whose behalf he was acting in the trade or anticipated trade, or any other facts which may have influenced either the buyers or the sellers • $4,500 Industry members must disclose their role in writing in any transaction. In this case, the associate should have disclosed to both the seller and the buyer his role in the transaction.

2) An industry member shall not provide any services to the client or potential client in a trade or anticipated trade in which the industry member has, or will have, a conflict of interest without receiving the written and informed consent of the party [s.54(3) of the Real Estate Act Rules] • Mr. Lyons had previously acted as a representative in real estate transactions for each of the buyers and sellers of the property • Mr. Lyons informed the sellers that he had potential buyers • Mr. Lyons referred to the prospective buyers as clients and showed them the property • Mr. Lyons received multiple competing offers • Mr. Lyons informed the sellers of the offers and was informed to counter back with the highest offer • Mr. Lyons provided no written or informed consent regarding the conflict of interest in relation to any services he provided to any of the parties • $4,500 Industry members must disclose any conflict of interest and obtain the written and informed consent of all parties to continue providing services. In this case, the associate had previous relationships with numerous potential buyers and the sellers, requiring written consent from all parties in order to continue their relationship with the associate.

3) No industry member shall solicit, accept or receive from the public or from the industry member’s client money or other consideration except in the usual course of carrying on the business of an industry member [s. 18(1) of the Real Estate Act] • no industry member shall receive money in the course of carrying on business as an industry member unless, before receiving the money, the industry member has entered into a service agreement with the person who provides the money or on whose behalf it is to be held that expressly acknowledges the trust arrangement between them and sets out the terms on which the money will be received, held and disbursed [Real Estate Act s. 18(2)] • Mr. Lyons provided a handwritten purchase contract for a property and witnessed the buyer’s signature on the contract • the handwritten contract contained no information for both the buyer and seller representative • Mr. Lyons’ brokerage later discovered a typed purchase contract with Mr. Lyons signature that included the following term: • seller to pay commissions upon closing of house of the sum of 3% of selling price to Brad Lyons • the brokerage informed Mr. Lyons that commissions could not be received like this and that all paperwork is required to go through the brokerage • the transaction completed and Mr. Lyons received a commission check worth $11,497.50, which he deposited into his personal account • Mr. Lyons has taken no steps to remedy his non-compliance • $15,000 All transactions must go through the brokerage, including all commissions and paperwork. Mr. Lyons drafted terms to receive money directly from a client, and he received that money without entering into a service agreement, and in direct opposition to instructions clearly communicated to him by his brokerage.

When reached for comment, Lyons told LNN that under the advice of his brokerage, he would not be commenting, and additionally, the incidents occurred about 10 years ago. It’s not clear why, if the offences occurred a decade ago, the punishments were only administered a few months ago.

Douey says each agent has 30 days to appeal the fine from the date that it’s levied, and to request a hearing. During that time, the fine does not have to be paid. In Lyons’ case, that has not been done. It’s not clear whether the $25,000 in fines have been paid.

Douey adds that fines are quite common and it would be strange to go for a week or two without an administrative penalty coming down. However larger fines are less common.

“We receive 1,000 complaints a year. Not all of those eventually result in a penalty. Some of them might not be in our jurisdiction, or there’s no evidence or things like that. But most administrative penalties are smaller in nature.”

Although any licenced realtor, mortgage broker, property manager and real estate appraiser can be searched on the site, records only go back about two years. It’s not clear whether any other Lethbridge realtor has faced large fines.

by Lara Fominoff

Lethbridge real estate agent fined $24,000 by Real Estate Council of Alberta

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