August 15, 2023
Note to reader: This matter was prosecuted under the Real Estate and Business Brokers Act, 2002.
Registrants should be mindful that they are accountable for promises made to a client, and failed promises can have significant implications and consequences. Here is an example and the sequence of events that resulted in disciplinary action involving a failed promise.
A seller listed a business for sale with a registrant but later felt the price was too high. As a result, they terminated the listing and resigned a new agreement with the same registrant.
After the property had been on the market for a year with little activity, the seller started to doubt the registrant’s capability to sell the property.
When the listing expired, the seller discussed with the registrant reducing the price further. The seller also interviewed another registrant about possibly listing the property for sale.
The original registrant induced the sellers to relist the property with them on the promise that if the property did not sell the registrant promised to purchase it at the end of the listing period. The promise was confirmed in writing.
At the end of the listing period, the registrant failed to fulfill their promise to purchase the property.
RECO’s discipline panel found that the registrant breached sections 3,5,35,37.1 and 38 of the Code of Ethics by inducing the seller into signing a listing agreement and failing to follow through on the promise to purchase the property if it did not sell during the listing period. The panel ordered a fine of $13,500 and a requirement to complete an ethics training course.
Consumers often rely on the promises made, and an unfulfilled promise could have financial consequences for the consumer. Clear and transparent communication and documentation are crucial for all parties to understand their rights and responsibilities. When a registrant makes a promise to a consumer, it should be in writing and confirmed by all parties involved.