Aug 27, 2020

Knowing the Rules May Not Be Enough #529

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By Brian Taylor,
Norton Rose Fulbright LLP

A recent discipline decision from the Real Estate Council of BC (Council) illustrates how important it is for licensees to be aware of and follow Council guidelines and their interpretations, which can be found in newsletters, notices, articles, and answers to Frequently Asked Questions, all readily available on Council’s website.

In this decision,1 a couple was engaged in divorce proceedings. As part of those proceedings the matrimonial property was to be sold. The Property was registered solely in the name of Spouse A. Spouse B had filed a certificate of pending litigation against the Property. A court issued the following order in the divorce proceedings:

"The Property shall be listed for sale forthwith with the parties to have joint conduct of sale in so far as picking a realtor, determining a listing price and determining a sale price for the Property.” (Order)

Spouse A, the registered owner of the Property, listed the Property but did not advise the listing brokerage or the listing licensee at the time he entered into the listing contract that he was engaged in divorce proceedings or that Spouse B had been granted joint conduct of sale under the Order. A week after the listing commenced, Spouse B sent the licensee a copy of the Order.

Spouse A received an offer to purchase the Property (Offer). The licensee, representing Spouse A, forwarded the Offer to the lawyer for Spouse B who reviewed it with his client. The lawyer advised the licensee that the Offer was acceptable to Spouse B with minor changes to the completion and possession dates.

The revised Offer was sent to the buyer. The buyer then accepted the new completion and possession dates, but reduced the offered purchase price by $2000 (Counter Offer).

The licensee then forwarded the Counter Offer to the lawyer for Spouse B who advised the licensee that Spouse B was at work and would not be able to review the Counter Offer until the end of the day. However, Spouse A did not want to wait, and accepted the Counter Offer, and instructed the licensee to send the accepted Counter Offer to the buyer. The licensee did so, believing he was following the instructions of his client.

Council received a complaint regarding the conduct of the licensee. The licensee, by way of a Consent Order, eventually admitted to professional misconduct by failing to ensure that Spouse B was involved in determining the ultimate price of the Property, when the licensee knew about the Order.

Of interest to all licensees, is the following paragraph in the Agreed Statement of Facts in the Consent Order:

"Although the RESA, the regulations made under RESA and rules made under RESA (Rules) do not address a licensee’s obligations in the circumstances of this case, the licensee accepts that the Council has issued guidance in a newsletter advising licensees that both spouses must be involved in decisions relating to the sale of family property, even if one spouse is not on title."

Council has provided licensees with considerable guidance and interpretation of the Rules which can be found in the numerous articles, newsletters, notices and answers to Frequently Asked Questions found on its website. Council expects licensees to have read, be aware of and follow these guidelines and interpretations. The outcome of this discipline decision suggests that a licensee who acted in ignorance of such guidance and interpretations could be acting without reasonable skill and care in contravention of the Rules.

 1 Real Estate Council of British Columbia Consent Order #15-360 July 9, 2020 Stewart.

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By Brian Taylor,
Norton Rose Fulbright LLP

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