Disciplinary Newsletter

March 2025

Volume 14 Edition 1

IN THIS ISSUE

Introduction

Detailing Investigations
Publishing Disciplinary Decisions

Public Initiated Investigations

Case #1: Failure to Verify Information Resulting in Misleading Advertising
Case #2: Not Protecting Interests of Clients and Unprofessional Conduct
Case #3: Misleading Advertising/Failure to Discover Facts
Case #4: Releasing Deposit Without Written Authority
Case #5: Not Making Required Disclosures
Case #6: Lack of Knowledge/Skill/Judgement and Failure to Discover Facts
Case #7: Unprofessional Conduct During A Viewing
Case #8: Not Protecting Interests of Client

NSREC Initiated Investigations

Case #1:  Undisclosed Criminal Charges/Convictions
Case #2: Misleading Advertising 

DETAILING INVESTIGATIONS

The Disciplinary Newsletter does not detail every case the Commission investigates. Rather, these cases were found to be the most useful as a learning resource.

PUBLISHING DISCIPLINARY DECISIONS

The Commission Disciplinary Newsletter publicizes decisions in accordance with the Commission by-law 839.

PUBLIC INITIATED INVESTIGATIONS

 CASE #1: FAILURE TO VERIFY INFORMATION RESULTING IN MISLEADING ADVERTISING

Buyers purchased a residential home and an adjacent lot. The adjacent lot was a 1.5-acre wood lot, which was advertised as an approved building lot. As part of their retirement income, the buyers planned to build rental properties on the lot. When they applied for the building permit, they were told by the respective municipality that rental units could not be built on this lot. The buyers submitted a complaint to the Commission alleging that the seller’s licensee falsely advertised the property as an approved building lot. 

The evidence supported that at the time of listing, the sellers advised their licensee that the adjacent lot was an approved building lot. The licensee did not confirm this information with the municipality prior to advertising. During the seller’s ownership of the property, the approved land use of the lot changed as a result of a Municipal Planning Strategy. The Municipal Planning Strategy took eight years to complete and was widely advertised in the area. Licensees are deemed to be knowledgeable professionals and ought to have been aware of the changes to the Land Use By-law in their practice area.

When listing a property, licensees have an obligation to discover all facts pertaining to the property, this includes taking all reasonable steps to verify information that is relayed to them by their clients. Being an approved building lot is a significant selling feature for a piece of land. The seller’s licensee had an obligation to verify this information prior to advertising. This advertisement was misleading to the public and did not protect their clients’ best interests.  

The licensee was charged with and agreed to having violated Commission By-law 702, Article 10 for failing to verify this information.

PENALTY

The licensee was fined $500 for the violation.

CASE #2: NOT PROTECTING INTERESTS OF CLIENTS AND UNPROFESSIONAL CONDUCT

A seller planned to list their property with a licensee. Two days prior to the intended list date, the licensee asked the seller if they would be agreeable to the licensee promoting the upcoming listing internally amongst licensees at their brokerage. The seller agreed. The brokerage practices designated agency. This resulted in one viewing request from another licensee at the brokerage. The seller consented to the viewing. The following day, the seller proceeded to list their property for sale. After listing the property, the seller stated their licensee advised them that the viewing resulted in an offer. The seller submitted a complaint to the Commission alleging that the offer was not provided to them during the open for acceptance time. The seller further alleged that the licensee negotiated on their behalf, without their knowledge or consent, by advising the buyer’s licensee they did not accept the offer and may request a revised offer later.

The seller’s licensee stated that they had advised the seller that the viewing would likely result in an offer but they were traveling and could not present the offer until the following day. The seller stated they were not advised of this information. The offer in question was prepared the evening of the viewing and was open for acceptance until 9:00 a.m. the following morning. The seller’s licensee and buyer’s licensee discussed the offer via text message after it was received by the seller’s licensee. At this point, although the licensee was acting in an agency capacity, the seller had not signed a Working with the Real Estate Industry disclosure form or Seller Designated Brokerage Agreement.

The evidence supported there was a phone call between the seller and their licensee at 9:12 a.m. the follow morning, after the offer expired. The licensee states during this phone call they advised the seller of the offer and the seller decided not to counter the offer and to proceed with listing the property. The seller denied being advised of the offer until later in the day and stated the only discussion during this phone call was about listing the property. Since the phone call was verbal there is no way to substantiate what was said during the phone call. The evidence did support that the seller’s licensee did not provide the seller with a copy of the offer during the open for acceptance time. This did not protect the seller’s interest and was a violation of Commission By-law 702, Article 2.

The evidence did not support that the seller’s licensee negotiated on the buyer’s behalf with the buyer’s licensee. 

Unrelated to the allegations, the investigation included a complete review of the brokerage transaction file. The evidence supported the seller’s licensee acted in an agency capacity for the seller without first having them review and sign a Working with the Real Estate Industry disclosure form and a Seller Designated Brokerage Agreement. There is an order of operations that must be followed by licensees with respect to relationship disclosures, agency/customer agreements, and agreements of purchase and sale. The industry has been well informed and educated on this required order of operations. The licensee’s conduct was unprofessional and constituted a violation of Real Estate Trading Act, Section 22 (1) (a).

In addition, it was in the seller’s best interests to expose their property to the market and solicit as many offers as possible.  Only promoting the property amongst the brokerage prior to listing did not protect the seller’s interests, a second violation of Commission By-law 702, Article 2.

The seller’s licensee was charged with, and agreed to having violated, two counts of Commission By-law 702, Article 2 for not acting in the best interests of their client; and Real Estate Trading Act, Section 22 (1) (a) for unprofessional conduct regarding agency disclosure/agreements.

PENALTY

The licensee was fined $500 for each violation of Commission By-law 702, Article 2 and $1,000 for the violation of Real Estate Trading Act, Section 22 (1) (a).

CASE #3: MISLEADING ADVERTISING/FAILURE TO DISCOVER FACTS

Buyers purchased a residential home on a corner lot and an adjacent lot. The adjacent lot was advertised as 3,000 square feet and included a picture of the lot. The buyers planned to build a shed on the adjacent lot. After closing, the buyers discovered the lot was only 1,500 square feet and that the picture included in the advertisement was actually of a different lot on a different street. The buyers submitted a complaint to the Commission alleging that the seller’s licensee misrepresented the lot in the advertisement both in the square footage and the picture. They further alleged that their licensee did not provide them with the Property Online information prior to closing and did not verify the PIDs they were purchasing.

The seller’s licensee stated that they were misinformed by the seller regarding which additional lot they owned and took a picture of the incorrect lot. The licensee later verified the correct lot on Property Online, but mistakenly uploaded the picture of the incorrect lot, therefore misrepresenting which lot was for sale.

At the time of listing, Property Online identified the lot as 3,000 square feet. The square footage changed to 1,500 square feet as a result of the migration process and the evidence did not support that either licensee was notified of this information prior to closing.

The evidence supported that although the buyer’s licensee prepared an offer with two PIDs, they did not have a conversation with the buyers about the additional lot they were purchasing, they were not aware of the location of the additional lot, and did not attempt to discover the boundaries. Licensees have an obligation to discover facts pertaining to properties. This includes providing consumers with all information from Property Online, which in this case, the evidence supports the buyer’s licensee did not do.

Unrelated to the allegations, the investigation included a complete review of the brokerage transaction file. Both licensees were issued a written warning for paperwork discrepancies.

The seller’s licensee was charged and agreed to having violated Commission By-law 708 (a) (i), (ii) and (iii) for misrepresenting which additional lot was for sale.

The buyer’s licensee was charged with and agreed to having violated Commission By-law 702, Article 10 for failing to discover facts. 

PENALTY

Both licensees were fined $500 for the violations.

CASE #4: RELEASING DEPOSIT WITHOUT WRITTEN AUTHORITY

As a result of information brought to the Commission’s attention by a consumer, the Registrar initiated an investigation against a broker.

The brokerage was representing a buyer in a transaction and the seller was a customer of the brokerage. The buyer was paying remuneration to the brokerage. Per the terms of the Agreement of Purchase and Sale, the deposit was held in the brokerage’s trust account. Upon closing, the broker removed the funds from the trust account to be credited toward the brokerage’s remuneration. This resulted in the seller’s lawyer not having all funds required to close because they were short the amount of the deposit.

Clause 1.1 of the Agreement of Purchase and Sale identifies that deposits are to be held in trust by the brokerage pending completion or termination and are to be credited towards the purchase price on completion.

In situations where a Seller Brokerage Agreement/Fee Agreement is in place and the seller is paying remuneration, these agreements contain a clause in which the seller authorizes the brokerage to apply the deposit towards any remuneration owed to the brokerage. This process does not apply when there is a Buyer Brokerage Agreement in place and the buyer is paying remuneration. The Buyer Brokerage Agreement cannot give this direction because clause 1.1 states the deposit is to be applied towards the purchase price, which is always paid to the seller.  

The broker ought to have known that written authority (by way of an amendment to clause 1.1 of the Agreement of Purchase and Sale or written direction from the respective lawyers) was required from both parties in order to apply the trust deposit toward remuneration.

The broker was charged with and agreed to having violated Real Estate Trading Act, Section 22 (2) (a) for applying the trust deposit towards remuneration, without having written direction from all parties.

PENALTY

The broker was fined $500 for the violation.

CASE #5: NOT MAKING REQUIRED DISCLOSURES

A few years after purchasing a residential home, buyers discovered that their deck and pool were located partially on top of the septic system. The buyer’s stated that their licensee confirmed the location of the septic system prior to closing to ensure it was located away from the pool. They submitted a complaint to the Commission citing numerous allegations against the seller’s licensee, who was also an owner of the property. They alleged the seller’s licensee misled their licensee concerning the location of the septic system and failed to disclose other information to them, including that the property was a matrimonial home.  

Any conversations between the buyer’s licensee and seller’s licensee concerning the location of the septic system were verbal, therefore there was insufficient evidence to determine whether seller’s licensee misled the buyer’s licensee regarding the location of the septic system. The buyers did not complete an inspection of the septic system.

The seller’s licensee was required to notify the buyer in writing prior to the Agreement of Purchase and Sale or within the agreement itself that they are licensed and that the property was a matrimonial home. They did not make the required disclosures and as a result violated Commission By-law 702, Article 21.

PENALTY

The licensee was fined $500 for the violation.

Case #6: Lack of Knowledge/Skill/Judgement and Failure to Discover Facts

Out-of-province buyers found a licensee to assist them in finding a retirement home in Nova Scotia. The buyers made three offers in total on two different properties that were listed with the licensee. Their third offer was accepted and subsequently closed. The buyers were customers of the brokerage. After closing, the buyers submitted a complaint to the Commission alleging that the licensee did not discuss agency relationships with them. They believed the licensee was acting in their best interests. They further alleged that the licensee misinformed them by advising that they would not be responsible for road maintenance.

Prior to offering on the subject property, the buyers were interested in a different property that was listed by another brokerage. The licensee contacted the listing licensee on the buyer’s behalf and provided them with advice without first having the buyers sign a Working with the Real Estate Industry (WWREI) disclosure form or a Buyer Designated Brokerage Agreement (BDBA).

The same day, the licensee prepared the buyer’s first offer on the subject property and provided them with all pre-prepared documentation to be signed, WWREI, Buyer Customer Acknowledgement and Agreement of Purchase and Sale.

In addition, the evidence supported that the licensee continually convoluted their role as the seller’s representative in this transaction. Despite having the buyers sign three separate Buyer Customer Acknowledgements, the licensee proceeded to provide them with advice, supporting that she was acting in the capacity of implied agency. Convoluting their agency role and the above paperwork discrepancies constituted a violation of Real Estate Trading Act, Section 22 (2) (a).

The buyers stated the licensee verbally advised them that the municipality, and later the department of highways, were responsible for the road maintenance. Upon closing they discovered the road is private and they are responsible for road maintenance. There was insufficient evidence to support what the licensee advised them regarding the road maintenance; however, it was easy to determine the road is private on Property Online. The licensee thought the road was public. By failing to discover this fact the licensee violated Commission By-law 702, Article 10.

In addition, the evidence supported that the licensee did not discover that the subject property was a matrimonial home. Prior to entering into brokerage agreements with sellers, licensees are required to verify who has the authority to market and sell the property and ensure all sellers are identified on and sign all real estate documentation. The licensee was issued a written warning on this.

The licensee was charged with and agreed to having violated Real Estate Trading Act, Section 22 (2) (a) for paperwork discrepancies and convoluting their agency role with the buyers, and Commission By-law 702, Article 10 for failing to discover the subject property was located on a private road.

PENALTY

The licensee was fined $1,200 for the violations.

Case #7: Unprofessional Conduct During A Viewing

The Commission received a complaint from members of the public whose property was listed for sale. Their complaint was against a licensee who facilitated a virtual viewing of the property for a buyer. They alleged that without their knowledge or consent, the licensee recorded the viewing, in which they made derogatory comments about the property, and uploaded the recording to YouTube, open to the public. They further alleged that the licensee brought a building inspector, who was the licensee’s spouse, to the property without their consent.  

The evidence supported that the licensee recorded a virtual viewing with a buyer and uploaded the recording to YouTube, open for the pubic to view. The evidence further supported that at the time this complaint was received, there were numerous recordings of other virtual viewings uploaded to the licensee’s YouTube page in public view. The licensee stated they meant to only have the recordings under a private link for buyers to view.

Licensees must have consent from the sellers in order to record viewings. Without consent from sellers, taking a video in a property is not permitted and constitutes unprofessional conduct. The public must have confidence that when they provide access to their property to real estate licensees, that their privacy will be respected and information shall be gathered, used, and shared, only for a reason related to trading in real estate.

In addition, the evidence supported that the licensee brought their spouse, an unlicensed person, to numerous viewings and left them unattended both inside and outside of properties. Licensees have a professional responsibility to ensure that attendees at viewings are appropriately supervised. Failing to follow this protocol constituted unprofessional conduct.  

The licensee was charged with and agreed to having violated two counts of Commission By-law 702, Article 35, for unprofessional conduct.

PENALTY

The licensee was fined $500 for each violation.

Case #8: Not Protecting Interests of Client

A buyer purchased a residential home and believed that specific fixtures/chattels, including uninstalled baseboard heaters, would be left by the seller. The items were not left at the property on closing. The buyer submitted a complaint to the Commission against both their licensee and the seller’s licensee alleging that both licensees were unclear with regards to what fixtures/chattels would remain at closing. The buyer additionally alleged that the seller’s licensee fabricated statements regarding items the sellers would leave in the property.

The evidence supported that the buyer’s licensee inquired to the seller’s licensee about specific items that the buyer wanted to remain at the property. The seller’s licensee provided them with a list of items the seller would leave at the property. The items desired by the buyer were not included on the list. The buyer’s licensee did not ensure the items were added to the list or prepare an amendment to the Agreement of Purchase and Sale to ensure the items desired by the buyer would be left. This did not protect the interests of their client.

The evidence did not support that the seller’s licensee failed to clearly articulate what fixtures/chattels would remain on closing or that they fabricated statements regarding items that would be left. The seller’s licensee confirmed all information concerning fixtures/chattels with the sellers and provided this information to the buyer’s licensee. 

Unrelated to the allegations, the investigation included a complete review of the brokerage transaction file. Both licensees were issued a written warning for paperwork discrepancies.

The buyer’s licensee was charged and agreed with having violated Commission By-law 702, Article 2, for not protecting the interests of their client.

PENALTY

The licensee was fined $500 for the violation.

Commission Initiated Investigations per Real Estate Trading Act Section 17(2)

Case #1: Undisclosed Criminal Charges/Convictions

A consumer contacted the Commission alleging that a licensee had been charged with a DUI and assault. The Registrar reached out to the licensee to confirm whether they had been charged and/or convicted of any criminal offenses. The licensee confirmed the information. Since the licensee did not disclose this information to the Registrar, as required, the Registrar initiated an investigation against them.

The evidence supported that the licensee was charged and convicted of criminal offenses. The licensee mistakenly thought they were only required to disclose this information when a conviction had occurred. The licensee further believed they had until renewal time to disclose this information. Commission By-law 410 (f) requires that all licensees disclose criminal charges and or convictions to the Registrar in writing immediately upon occurrence.

The licensee was charged and agreed to having violated Commission By-law 410 (f) for not disclosing criminal charges and convictions to the Registrar immediately upon occurrence.

PENALTY

The licensee was fined $500 for the violation.

Case #2: Misleading Advertising 

It was brought to the attention of the Commission that an unlicensed company was promoting itself as a licensed real estate brokerage on a website. The Commission determined that the website belonged to a licensee. It appeared that the company was a property management company that was also promoting real estate trading. Upon further review, the Commission discovered the licensee was also operating another similar website. As a result, the Registrar initiated an investigation against the licensee.

It was determined the licensee owned an unlicensed company that was registered with Nova Scotia Registry of Joint Stocks. The company offered non-trading services such as residential property management. Both websites operated by the licensee promoted real estate trading services offered by a team. The licensee was the only person licensed to trade in real estate on the referenced team and therefore the team did not meet the By-law definition.  The By-law requires that a team have a minimum of two licensees with the same brokerage.

Both websites identified the brokerage name but it was in small font and therefore was not depicted prominently.

Licensees are not prohibited from having other occupations; such as owning an unlicensed company, however; when trading in real estate, licensees are trading on behalf of the licensed brokerage and this must be clear to consumers. The websites in question were convoluted and misleading to consumers as to who the licensed brokerage/persons were and what services they were offering. Further, the office address being promoted on the website was not licensed as a branch office with the Commission.

The licensee was charged and agreed to having violated Real Estate Trading Act, Section 4 (1) for advertising and promoting real estate trading services from an unlicensed brokerage; and Commission By-law, 708 (a) (i), (ii) and (iii) for false and misleading advertising regarding an unlicensed branch office. The licensee was also issued warnings for advertising a team that did not comply with NSREC By-law 144A, promoting real estate trading services, prompting consumers to contact an unlicensed person via email, and for not identifying the brokerage name on various social media accounts.

PENALTY

The licensee was fined $500 for each violation.

For educational purposes, the Commission has created a fictional website graphic to better explain the issues with the website in this case. Please note that this website, brokerage, "team", and the individuals pictured below are fictional and not licensed to trade in real estate in the province of Nova Scotia. 

The website for the fictional "Legacy Real Estate Team" includes the following issues, similar to those in the real disciplinary investigation:

1. Misleading promotion of an unlicensed brokerage (Legacy Real Estate Services.)
2. The actual Brokerage name is not prominent.
3. The "Legacy Real Estate Team" does not comply with the By-law's definition of a team as only one person is licensed. Further, it is not clear who is licensed. Daniel must be identified as not licensed.
4. The team is offering services that are not a trade in real estate-without qualifying.
5. The branch office advertising is unlicensed.
6. The team logo is larger than the Brokerage logo.

Disciplinary Newsletter

IMPORTANT NOTICE: Audit and record keeping policies have been updated as of January 2025. This newsletter references outdated content, in accordance with the version in effect at time. For current information on audits, click HERE.

December 2023

Volume 13 Edition 1

IN THIS ISSUE

Introduction

Detailing Investigations
Publishing Disciplinary Decisions

Public Initiated Investigations

Case #1: Misleading Advertising
Case #2: Failure to Properly Address Relationship
Case #3: Unprofessional Conduct During A Viewing
Case #4: Not Protecting Interests of Client and Lack of Knowledge/Skill/Judgement
Case #5: Not Protecting Interests of Clients/Relaying Verbal Offers
Case #6: Not Protecting Interests of Clients and Lack of Knowledge/Skill/Judgement
Case #7: Not Protecting Clients Interests Resulting In Unclear Closing Day
Case #8: Misleading Advertising/Lack of Knowledge/Skill/Judgement

NSREC Initiated Investigations

Case #1: Paying an Unlicensed Sales Corporation
Case #2: Unlicened Branch Office

DETAILING INVESTIGATIONS

The Disciplinary Newsletter does not detail every case the Commission investigates. Rather, these cases were found to be the most useful as a learning resource.

PUBLISHING DISCIPLINARY DECISIONS

The Commission Disciplinary Newsletter publicizes decisions in accordance with the Commission by-law 839.

PUBLIC INITIATED INVESTIGATIONS

MISLEADING ADVERTISING

Buyers had an accepted agreement on an oceanfront property. During their due diligence period, they discovered that the property was older than advertised by the seller’s licensee. They submitted a complaint to the Commission alleging that the seller’s licensee incorrectly advertised the age of the property as 15 years old when the home was actually built approximately 10 years earlier, making it 25 years old.

At the time of listing, the seller’s licensee was advised by the sellers that when they purchased the property 15 years ago, it was not completed on the inside and had been abandoned for several years. The sellers did extensive work to the outside and completed the inside, including: rebuilding an exterior wall, new windows, roof, insulation, siding, wiring, plumbing and completed the interior.

It was known to the licensee that the first construction on the property took place approximately 10 years earlier than the above noted work carried out by the seller. Advertising the property age as 15 years old was misleading.

The licensee was charged with and agreed to having violated Commission By-law 708 (a) (i), (ii) and (iii) for misleading advertising.   

PENALTY

The licensee was fined $500 for the violation.   

FAILURE TO PROPERLY ADDRESS RELATIONSHIP

A licensee had a buyer client who was interested in a particular property that was not listed for sale. On their client's instruction, the licensee contacted the owner, a senior who lived alone, and asked if they were interested in selling their property. The owner said no. A few months later, the owner received an unsolicited letter in the mail from the licensee along with an offer on the property and a Seller Customer Acknowledgement and Fee Agreement. In the letter, the licensee offered to go over the offer with the owner, but did not advise them of their option to seek their own representation. The owner submitted a complaint to the Commission citing this allegation. At the time the investigation was initiated, the Registrar expanded the scope of the investigation to include the allegation that the licensee did not address their agency relationship with the parties prior to preparing the Agreement of Purchase and Sale (APS).

The evidence supported that licensee prepared an APS for their buyer client and mailed it to the seller. The licensee did not first provide and/or review with the seller a Working With the Real Estate Industry form and Seller Customer Acknowledgement and Fee Agreement. This is required before relaying an offer from a client to an unrepresented consumer. There is an order of operations that must be followed by licensees with respect to relationship disclosures, agency/customer agreements and agreements of purchase and sale. 

The standards to which transaction files will be reviewed, including the required timing and order of having disclosure documents and contracts signed, is outlined in the NSREC’s Audit Policy.

The licensee was charged with and agreed to having violated Commission By-law 705 (a) for failing to comply with the Commission’s Audit Policy.   

PENALTY

The licensee was fined $500 for the violation.  

UNPROFESSIONAL CONDUCT DURING A VIEWING

The Commission received a complaint from a member of the public whose property was listed for sale. The seller had security cameras on the property. They submitted a complaint alleging that during a viewing, a real estate licensee handled private documentation, opened a closed armoire, which contained private information, and took interior pictures.

The licensee was alone during the viewing. They state they took pictures because the listing cut identified interior pictures were allowed. They state they looked at furniture because they were verbally advised by the listing licensee that furniture could be included in the sale of the property. The listing licensee adamantly denied making this statement.

The evidence supported that during the viewing, the licensee entered a bedroom, picked up and examined a document on the bedside table and took a close-up picture of the inside of a shelf of the bedside table. The evidence also supported that the licensee approached and opened the closed door of an armoire and looked inside. It further appears they took a picture of the inside of the armoire.

The public expects that a real estate licensee, who accesses a property for sale, respects the seller’s privacy, and does not invade personal space or touch/photograph/video record personal property.  The public must have confidence that when they provide access to their property to real estate licensees, that their privacy will be respected and information shall be gathered, used, and shared, only for a reason related to the trading in real estate.

The licensee was charged with and agreed to having violated Commission By-law 702 Article 35 for unprofessional conduct during a property viewing.  

PENALTY

The licensee was fined $1,000 for the violation.

NOT PROTECTING INTERESTS OF CLIENT AND LACK OF KNOWLEDGE/SKILL/JUDGEMENT

A licensee was contacted by a consumer about potentially listing a property. The licensee viewed the property with the owner, gave a recommended listing price and advised they had buyer clients who may be interested in the property. The following day, the licensee viewed the unlisted property with buyer clients.

The same day, the licensee had their buyer clients sign a Working With the Real Estate Industry disclosure form (WWREI), Buyer Designated Brokerage Agreement (BDBA), Transaction Brokerage Agreement (TBA) and a completed Agreement of Purchase and Sale (APS). The licensee had been working with the buyers for weeks and they had already signed a WWREI and BDBA which was still in effect.

The following day, the licensee met with the seller and presented them with the following paperwork for their signature: WWREI, Seller Designated Brokerage Agreement (SDBA), TBA and APS.  

The evidence supported that the licensee, on behalf of their brokerage, entered into a TBA with the seller and the buyers. The licensee had no previous relationship with the seller but had facilitated four transactions for the buyers in recent years. The licensee led the seller into a high-risk situation whereby they could not provide them with advice or other agency services. The seller and the buyers were not on equal playing field with respect to their knowledge and experience with real estate transactions.

The seller’s best interests were to expose their property to the market to solicit interest and offers. The evidence supported the licensee did not make this recommendation to the seller, nor did they advise the seller of their option to receive representation from another designated agent or brokerage. As a result, the licensee violated Commission By-law 702 Article 2.

Not only was it inappropriate for the licensee to recommend the seller enter into a TBA, they did not follow the required procedures for licensees when providing and obtaining disclosure acknowledgements and representation agreements.

Licensees are required to have consumers (clients and customers) sign the Commission’s WWREI disclosure form at the earliest opportunity. The licensee did not obtain any required written disclosures with the seller prior to preparing the APS on behalf of their buyer clients. Further, the TBA was not signed by all parties prior to the preparation of the APS, as required. Presenting the seller with all real estate documentation to be signed at the same time is not an acceptable practice.

In addition, the evidence supported that the licensee did not discover that the subject property was a matrimonial home. Prior to entering into brokerage agreements with sellers, licensees are required to verify who has the authority to market and sell the property and ensure all sellers are identified on and sign all real estate documentation.

Finally, the investigation included a review of the brokerage transaction file and numerous paperwork discrepancies were identified.  

The evidence supported the licensee demonstrated a lack of understanding of the basics of agency relationships. Their overall conduct and the paperwork discrepancies identified constituted a violation of Real Estate Trading Act Section 22 (2) (a).

The licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for not protecting the interests of their client; and Real Estate Trading Act Section 22 (2) (a) for demonstrating a lack of knowledge/skill/judgement. 

PENALTY

The licensee was fined $500 for the violation of Commission By-law 702 Article 2 and $750 for the violation of Real Estate Trading Act Section 22 (2) (a).

NOT PROTECTING INTERESTS OF CLIENTS/RELAYING VERBAL OFFERS

The Commission received a complaint from a seller who listed a vacant lot for sale with a licensee. After there was an accepted agreement in place, pending closing, the seller’s licensee asked the seller if the buyers could store their camping trailer on the lot until closing. The seller agreed. A few days later the seller drove by the lot and discovered the buyers had moved numerous personal items onto the lot, had a campfire and appeared to be sleeping at the lot. The seller submitted a complaint to the Commission alleging that their licensee failed to represent their interests respecting the storage of the trailer. The consumer further alleged the licensee was acting as an agent for both the seller and buyers when the seller did not sign paperwork consenting to this.

The buyers were customers of the licensee’s brokerage. The evidence supported when the buyers requested to store their trailer on the property before closing, the licensee immediately called the seller, put them on speakerphone in front of the buyers, and relayed the request. This was inappropriate.

The licensee ought to have relayed the request to their client privately, discussed with them the potential risks of allowing a buyer to store anything at the property, which had not closed, and recommend they speak to their legal counsel prior to agreeing.  None of this was done. Although there was no way for the licensee to anticipate that the buyers would move into their trailer on the lot, this is the very reason the seller should have been referred to their lawyer for counsel.  In this regard the licensee did not protect their client’s interests, a violation of Commission By-law 702 Article 2.

The evidence did not support the complainant’s second allegation. The licensee was not representing the buyers, they were customers of the brokerage.  

Unrelated to the allegations, the investigation included a review of the brokerage transaction file. The evidence supported that licensee received two written offers. The licensee reviewed the offers and e-mailed the seller with the highlights. The seller instructed the licensee to determine whether one of the buyers in particular would increase the purchase price to a specific amount. The licensee then relayed this request via a phone call to the buyers who agreed on the price. The licensee then asked the buyers to write a new offer with the verbally agreed upon purchase price. Relaying a purchase price over the phone constitutes a verbal offer. The Real Estate Trading Act is clear that all offers obtained by licensees are to be written and executed. Facilitating verbal offers constitutes a violation of Real Estate Trading Act Section 30 (3).

The licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for not protecting the interests of their client and Real Estate Trading Act Section 30 (3) for facilitating a verbal offer.  

PENALTY

The licensee was fined $500 for each violation.  

NOT PROTECTING INTERESTS OF CLIENTS AND LACK OF KNOWLEDGE/SKILL/JUDGEMENT

An out-of-province buyer had an accepted agreement on a property in Nova Scotia. The buyer was represented by a licensee. As part of their due diligence, the buyer hired a home inspector and a septic inspector to conduct inspections at the property. Upon review of the inspection reports, the buyer noticed the reports were incomplete. They contacted the respective inspectors and were advised the inspectors were unable to complete their inspections because the water and power were turned off at the property. The buyer terminated the transaction and submitted a complaint to the Commission alleging that their licensee did not advise them that the water and power would be turned off during the inspections.

The seller’s licensee states they advised the buyer’s licensee on multiple occasions the property was winterized and the water was not turned on. The buyer’s licensee denied being advised. The evidence did not support that the buyer’s licensee was aware the power at the property had been turned off.

The buyer’s licensee failed to attach a Water and Septic Schedule to the Agreement of Purchase and Sale. This was required in order to carry out specific inspections of the water/septic system. Failing to include this schedule did not protect the interests of their client, a violation of Commission By-law 702 Article 2.

The inspection report identified that the septic tank cover was exposed during the inspection. Based on the evidence, it appeared the buyer’s licensee allowed the septic inspector to dig to expose the septic tank cover without consent from the seller (because the schedule was not attached). The buyer’s licensee was responsible to ensure the property was secure during the inspection.

Finally, the investigation included a review of the transaction file, which identified numerous paperwork discrepancies.

The buyer’s licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for failing to include the Water and Septic Schedule, and Real Estate Trading Act Section 22 (2) (a) for the paperwork discrepancies.

PENALTY

The licensee was fined $500 for each violation. 

NOT PROTECTING CLIENTS INTERESTS RESULTING IN UNCLEAR CLOSING DATE

A seller recently sold a property. The seller and the buyer each had their own representation. Shortly prior to closing, there was confusion as to when the closing date was. The seller believed the closing date was October 29^th and the buyer believed the closing date was October 28^th. The seller submitted a complaint to the Commission alleging that the buyer’s licensee falsified the closing date on the Agreement of Purchase and Sale (APS). Based upon the information received during the course of the investigation, the Registrar expanded the scope to include the conduct of the seller’s licensee.

The evidence supported the buyer’s licensee prepared an offer in which clause 2.1, closing and conveyance, was struck and underneath the standard text of the clause, the following words were added “Seller to choose closing date between October 11 and October 29^th, 2021.” The buyer initialed beside this clause.

The offer was then relayed to the seller’s licensee who relayed the offer to the seller. The seller subsequently struck the “October 11^th and”, and left “October 29^th, initialed this change and accepted the agreement. 

The seller’s licensee relayed this agreement to the buyer’s licensee. Shortly thereafter, the buyer’s licensee asked the seller’s licensee in a text message if the closing date could be October 28^th. The seller’s licensee responded by text that it shouldn’t be an issue.

The next day, the buyer’s licensee sent the seller’s licensee the APS with clause 2.1 altered to reflect October 28^th. The buyer had initialed this change.

The seller states their licensee relayed the new proposed closing date, but they refused. The seller’s licensee states they then relayed their client’s refusal to the buyer’s licensee by phone. The buyer’s licensee denied being advised of this information.

Based on the above, the buyer believed the closing date was October 28^th whereas the seller believed the closing date was October 29^th.

The evidence did not support that the buyer’s licensee fraudulently altered the closing date, however, they did fail to verify for their client the status of the proposed amendment, via the submission of an attempted amended APS, to change the closing date to October 28th.   This was contrary to their client’s best interests.

The seller’s licensee also failed to ensure their client’s interests were protected by failing to confirm the written APS reflected a clear closing date with all necessary signatures and initials.   

The buyer’s licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for not protecting the interests of their client.   

The seller’s licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for not protecting the interests of their client.   

PENALTY

Both licensees were fined $500 for the violation.   

MISLEADING ADVERTISING/LACK OF KNOWLEDGE/SKILL/JUDGEMENT

A buyer had an accepted agreement on a piece of land listed with a real estate licensee. The buyer entered into a Transaction Brokerage Agreement (TBA) with the seller and the brokerage. As part of the buyer’s due diligence, they had a survey conducted and it was determined that the property was 7.45 acres and not 10 acres, as advertised by the licensee. The buyer submitted a complaint to the Commission alleging that the licensee incorrectly advertised the lot size of the property.

The evidence supported that at the time the property was listed, Property Online identified the property was 10 acres. During the course of the transaction, a survey determined the property was 7.45 acres. Property Online was updated to reflect this information. Despite this information being brought to the licensee’s attention, they continued to advertise the property as 10 acres.

Unrelated to the allegations, the investigation included a review of the brokerage transaction file and numerous paperwork discrepancies were identified. The evidence supported the licensee lacked understanding of agency relationships and was unclear whether the parties were clients or customers. The licensee further convoluted the relationship by entering into and a TBA simultaneously with the Agreement of Purchase and Sale. They entered into a TBA with the buyer and seller with whom they had no previous agency relationship with.

Not only was it inappropriate for them to recommend to both the seller and buyer to enter into a transaction brokerage agreement, they also did not follow the required procedures for licensees when providing and obtaining disclosure acknowledgments and representation agreements.

The evidence supported the licensee presented both the seller and the buyer with all real estate documentation to be signed at the same time; the Working With the Real Estate Industry form, Seller Designated Brokerage Agreement, Buyer Designated Brokerage Agreement, TBA and Agreement of Purchase and Sale.  This is not an acceptable practice for a licensee. In addition, numerous paperwork discrepancies were identified.

The licensee’s conduct included failing to correct the lot size in the advertisement once it was brought to their attention, lack of understanding of the basics of agency relationships, and the paperwork discrepancies.

The licensee was charged with and agreed to having violated Real Estate Trading Act Section 22 (2) (a) for demonstrating a lack of knowledge/skill/judgement. 

PENALTY

The licensee was fined $750 for the violation.

Commission Initiated Investigations per Real Estate Trading Act Section 17(2)

PAYING AN UNLICENSED SALES CORPORATION

A licensee contacted the Commission’s Licensing Officer inquiring how to license their sales corporation. The licensee advised that the brokerage was currently paying remuneration to their sales corporation, which was not licensed with the Commission. This information was relayed to the compliance department and, as a result, the Registrar initiated an investigation.

The evidence supported the broker had been paying the licensee’s unlicensed sales corporation for two months. 

Brokers are provided with copies of licences when they are activated. Further, brokers can access all licences at their brokerage by viewing the Commission’s licensing database. The By-law is clear that a brokerage shall not pay a commission/referral fee (remuneration) to an unlicensed person. 

The broker was charged with and agreed to having violated Commission By-law 715 (c).

PENALTY

The broker was fined $1,000 for the violation.  

UNLICENSED BRANCH OFFICE

It was brought to the Commission’s attention that a brokerage had signage at a location that was not licensed as a branch office. Further, a licensee was promoting the unlicensed branch office on social media and using the office space. The Registrar brought the unlicensed branch office to the attention of the broker. After nearly two weeks, the brokerage made no attempt to either remove or cover up the signage or license the location as a branch office. As a result, the Registrar initiated an investigation.

The broker states that a licensee of the brokerage erected a sign at the location on their own accord prior to the brokerage applying for a branch office at the location. The brokerage was awaiting approval from the franchisor in order to move forward with applying for a branch office with the Commission. 

The By-law is clear that all branch offices must be licensed with the Commission. It is the broker’s responsibility to ensure this is done. Until a branch office licence was issued by the Commission, that office space was not allowed to have signage, be advertised and/or operate as a branch office.

Brokers are ultimately responsible to ensure all necessary licences are obtained.

The broker was charged with and agreed to having violated Commission By-law 314 (a) and (b) for promoting an unlicensed branch office.

PENALTY

The broker was fined $1,000 for the violation.   

Disciplinary Newsletter

IMPORTANT NOTICE: Audit and record keeping policies have been updated as of January 2025. This newsletter references outdated content, in accordance with the version in effect at time. For current information on audits, click HERE.

May 2022

Volume 12 Edition 1

IN THIS ISSUE

Introduction

Detailing Investigations
Publishing Disciplinary Decisions

Public Initiated Investigations

Case #1: Failure to Obtain Written and Executed Offers
Case #2: Failure to Discover Facts
Case #3: Not in Client's Interests, Improper Application of Transaction Brokerage
Case #4: Lack of Knowledge, Skill or Judgment
Case #5: Unlicensed Trading
Case #6: Not Following Through with COVID-19 Protocols

NSREC Initiated Investigations

Case #1: Failure to Cooperate with Audit Process

DETAILING INVESTIGATIONS

The Disciplinary Newsletter does not detail every case the Commission investigates. Rather, these cases were found to be the most useful as a learning resource.

PUBLISHING DISCIPLINARY DECISIONS

The Commission Disciplinary Newsletter publicizes decisions in accordance with the Commission by-law 839.

PUBLIC INITIATED INVESTIGATIONS

Failure to Obtain Written and Executed Offers

An out-of-province prospective buyer contacted a seller's licensee and expressed interest in one of their listings. After having a relative view the property for them, the buyer relayed a ‘verbal offer’ on the property via phone call to the seller’s licensee.  The licensee later relayed the seller’s counter offer via text message which was subsequently accepted (via text message) by the buyer. A few days later the seller’s licensee sent a text to the buyer and advised that the seller had accepted another offer. The buyer, who was under the impression their ‘verbal offer’ and acceptance of the ‘counter offer’ via text message were binding agreements, submitted a complaint alleging the licensee acted unethically and should have made them aware of the other offer.

The evidence supported the seller’s licensee obtained the ‘verbal offer’ via phone call from the complainant which they relayed to their seller client. The licensee then obtained a ‘verbal counter offer’ from the seller, which they relayed to the complainant via text message. The Real Estate Trading Act (RETA) is clear that all offers are to be in writing and executed. Although the licensee did advise the complainant via text message that their offer needed to be in writing, they continued to relay the counter offer to them via text message.

Licensees must not engage in verbal offers, but because the buyer did convey a verbal offer to them, they had a fiduciary obligation to inform their seller client of the offer. After which, they were required to inform the seller that all offers must be in writing and properly executed. The licensee did not do this and as a result violated Real Estate Trading Act Sections 29 and 30(3). 

The evidence also supported the licensee entered into discussions with the buyer including terms of an offer without first addressing their agency relationship with all parties in writing by having the buyer first sign a Working with the Real Estate Industry (WWREI) form and then a Buyer Customer Acknowledgement (BCA). This was a violation of Commission By-law 705(a).

Respecting notifying the complainant of the other offer, the complainant was a customer and not in an agency relationship with the licensee. The licensee only had a fiduciary responsibility to the seller. The complainant’s offer was not a competing offer and the licensee did not have an obligation to advise them of the other offer unless instructed to do so by their seller client.

After the complainant was advised the seller accepted another offer, they contacted the broker to relay their concerns with the licensee’s conduct and was advised that all proper procedures were followed by the licensee. The Registrar expanded the scope of the investigation to include the conduct of the broker.

The evidence supported the broker did not advise the licensee that they must not negotiate a verbal offer or that they were required to address or have the complainant sign a WWREI form and BCA prior to negotiating terms of an offer. The broker demonstrated their lack of care or understanding of the requirements of the RETA and the Commission’s Audit Policy and as a result, was found in violation of Commission By-law 703(b).

Both the salesperson and broker accepted settlement agreements for the respective violations.

PENALTY

The licensee was fined $500 for violating Real Estate Trading Act sections 29 and 30(3), and $500 for violating Commission By-law 705(a).

The broker was fined $500 for violating Commission By-law 703(b).            

Failure to Discover Facts

Shortly after purchasing an oceanfront property, buyers were approached by two different neighbours who advised them that their property did not contain a driveway with access to the road. The portion of the driveway with access to the road was on a neighbouring property and there was no right-of-way allowing access to the neighbour’s driveway. One of the neighbours advised the buyers that they brought this information to the attention of the seller’s licensee at the time of listing. The buyers submitted a complaint alleging that the seller’s licensee misrepresented the property by advertising the property contained a driveway and failed to disclose this information to their licensee. 

The evidence supports that at the time of listing, the seller’s licensee was approached by a neighbour and advised that the subject property did not contain a driveway with access to the road. The licensee did not relay this information to their seller client. In addition, shortly before the buyers confirmed financing, the seller’s licensee was contacted by an appraiser who also questioned the driveway. The licensee again did not relay this conversation to their client and continued to advertise the property contained a driveway.

Property Online contains a subdivision plan which is easily accessible and clearly identifies the subject property did not contain a driveway with access to the road. The seller’s licensee confirmed they did not review the subdivision plan on Property Online.

When listing a property, licensees have an obligation to discover all facts pertaining to the property; this includes reviewing and verifying all documentation available on Property Online. Further, because the seller’s licensee became aware that the subject property potentially did not contain a driveway, they had an obligation to disclose this information to their client and to verify the information. Failure to take the necessary steps to verify the information and bring it to the attention of their client was a violation of Commission By-law 702 Article 10.

The Registrar expanded the scope of the investigation to include the conduct of the buyer’s licensee. The evidence supports that the buyer’s licensee also did not review the subdivision plan on Property Online.

The seller’s licensee was charged with and agreed to having violated Commission By-law 702 Article 10 for failing to review the subdivision plan on Property Online and for failing to disclose and verify the information relayed to them concerning the driveway.

The buyer’s licensee was charged with and agreed to having violated Commission By-law 702 Article 10 for failing to review the subdivision plan on Property Online.  

PENALTY

The seller’s licensee was fined $500 for violating Commission By-law 702 Article 10.

The buyer’s licensee was fined $500 for violating Commission By-law 702 Article 10.

Not in Client’s Interests, Improper Application of Transaction Brokerage

The Commission received a complaint from a buyer who had attempted to purchase a property on two occasions and had two separate accepted Agreements of Purchase and Sale (APS), however, both agreements subsequently terminated. The complainant alleged they were unable to complete the transactions because the seller could not provide clear title. The seller’s name identified on the first APS was different than the seller’s name identified on the second APS. At the time of both transactions, the deed registered to the property on Property Online was consistent with the seller’s name identified on the second APS.

The complainant alleged that the seller’s licensee failed to provide a reasonable explanation as to why the seller identified on the first APS was not the deeded owner.

In order for the licensee to be able to market and sell the subject property in a name other than the name of the deeded owner, they would require clear written authority from the seller (deeded owner). The seller’s licensee provided a ‘permission letter’ from the seller, however, this undated letter only gave the licensee permission to list the property, it did not give them authority to market or sell the property. The Commission was unable to confirm if the seller’s signature on the permission letter was bonafide. The licensee was issued a warning letter reminding them of their responsibility to ensure they have the proper written and executed authority from the seller to list and sell the property.

The Registrar expanded the scope of the investigation to include a complete review of the transaction file. The evidence supports that prior to the complainant’s APS, the seller’s licensee facilitated an APS between the seller and a different buyer and entered into a Transaction Brokerage Agreement with the parties. The seller’s licensee had only recently listed the property and had no previous relationship with the seller. The licensee had known the buyer, a former lawyer, for many years and had facilitated six or seven transactions for them. The seller had little real estate experience. By entering into transaction brokerage, the licensee put their client, the seller, in a high risk situation where they could not provide them with advice. Entering into a Transaction Brokerage Agreement with the parties did not protect the best interests of the seller client.  

As a result of the investigation, the licensee was charged with and agreed to having violated Commission By-law 702 Article 2 for improper application of transaction brokerage and not protecting the interests of their seller client. This was not the first time the licensee has been charged for inappropriately entering into a Transaction Brokerage Agreement. In 2011, the licensee was found in violation of By-law 702 Article 2 for a similar situation, and was fined $400.

PENALTY                     

The licensee was fined $800 for violating By-law 702 Article 2. They were also issued a written warning for not ensuring they had the authority to market and sell the subject property in the name of a consumer who did not have deeded interest.

Lack of Knowledge, Skill or Judgment

The Commission received a complaint from a first-time home buyer who just terminated their Agreement of Purchase and Sale (APS). Their complaint was against the licensee who had been representing them in the transaction. The complainant’s due diligence conditions in the APS included home inspection and insurance, both conditions had a due date. The complainant alleged the licensee did not protect their interests for various reasons, including advising the complainant they could conduct a home inspection after that condition due date had passed. The complainant further alleged that the licensee did not explain real estate processes or the details of the contracts.

The evidence supported that after the buyer’s conditions deadline had passed, the buyer’s licensee wrongly advised the buyer they could conduct their home inspection after the condition due date. The licensee further advised they would require a letter of insurability. The evidence further supports that the licensee advised the buyer that they could use the water test results from a previous buyer (terminated transaction). Lastly, the licensee wrongly advised the buyers of information concerning the process of terminating the APS.

The licensee’s actions demonstrated a lack of understanding of specific real estate transaction processes, such as out clauses and the importance of condition deadlines. Their conduct placed the complainant in a high-risk situation and did not protect their interests and as a result, they violated Real Estate Trading Act Section 22 (2) (a).

The investigation included a complete review of the brokerage transaction file. The evidence supported the Working with the Real Estate Industry (WWREI) form was signed by the complainant three days after the Buyer Brokerage Agreement (BBA) was signed. Licensees are required to have consumers (clients and customers) sign the Commission’s WWREI form at the earliest opportunity. Having the WWREI signed three days after the BBA does not comply with the Audit Policy and as a result constituted a violation of Commission By-law 705(a).

The licensee was charged with and agreed to having violated Real Estate Trading Act Section 22 (2) (a) for demonstrating a lack of knowledge, skill or judgment; and Commission By-law 705(a) for not complying with the Audit Policy. 

PENALTY

The licensee was fined a total of $1,250; $750 for violating Real Estate Trading Act Section 22 (2) (a), and $500 for violating Commission By-law 705 (a). 

Unlicensed Trading

The Commission received a complaint from a buyer who had recently purchased a property. During the pre-closing viewing, the complainant raised concerns when water was observed in the basement of the property. Their licensee directed them to consult with their lawyer. After closing, the complainant discovered that their licensee was unlicensed at the time they conducted their pre-closing viewing. They submitted a complaint against their licensee and the broker.

The evidence supports that after the Agreement of Purchase and Sale (APS) was accepted and before the closing, the licensee failed to pay their Errors and Omissions insurance and as a result, their licence was suspended. The suspended licensee did not intend to reinstate their licence. While their licence was suspended, the licensee facilitated what was considered trading activities on two occasions on behalf of the brokerage at the direction of the broker.

The broker is responsible to ensure all trading activities facilitated on behalf of the brokerage are carried out by licensed persons. However, the evidence supports in this case, the broker directed an unlicensed person to facilitate both an Amendment to an Agreement of Purchase and Sale and conduct a pre-closing viewing with the complainant.

The broker, whose brokerage practices common law agency, could have either taken over this file directly at the time the licensee’s licence was suspended or assigned another licensed person at the brokerage to complete the transaction. This was not done and as a result the broker’s conduct violated Commission By-law 704(f). This put the client in a high-risk situation as they were left without regulatory protection, including the recovery fund. The brokerage also did not have the protection of Errors and Omissions insurance.

The investigation included a complete review of the brokerage transaction file. The evidence supported the buyer’s trust deposit was submitted to the brokerage approximately six weeks after the due date identified in the APS. The broker did not notify the seller in writing when the deposit was not received per the terms of the APS, as required per the Audit Policy. This has been a Commission requirement for many years. Further, not complying with the Audit Policy is a violation of Commission By-law 704(i).

The broker was charged with and agreed to having violated Commission By-law 704(f) and Commission By-law 704(i).

Penalty

The broker was fined a total of $1,500; $1,000 for violating Commission By-law 704(f), and $500 for violating Commission By-law 704(i). 

Not Following Through with COVID-19 Protocols

A licensee represented buyers on a for sale by owner transaction. Prior to the home inspection, the sellers contacted the buyer’s licensee and inquired what COVID-19 safety protocols would be in place during the inspection.  The sellers allege that the buyer’s licensee advised them that all parties would be wearing masks, gloves, have hand sanitizer and that only the home inspector would be touching things in the house.

The sellers determined through their video surveillance that none of the parties were wearing masks, gloves, or had hand sanitizer, and the licensee had opened and closed an entry door.

The evidence supports that the licensee advised the sellers that all parties in attendance would be wearing a mask and this was not done. It could not be determined whether the licensee also advised the seller that all parties would be wearing gloves, bring their own hand sanitizer and that only the home inspector would be touching things in the house.

Although wearing masks while facilitating trading activities was not a requirement of the Commission or the provincial health department, the licensee confirmed that a COVID-19 safety protocol with the seller would be implemented, and did not follow through. The licensee had a professional obligation to follow through on this commitment and ensure all parties were wearing masks, as promised. Failing to do so constituted unprofessional conduct, a violation of Commission By-law 702 Article 35.

The licensee was charged with and agreed to having violated Commission By-law 702 Article 35 for not ensuring all parties were wearing masks, as promised.

Penalty

The licensee was fined $500 for violating Commission By-law 702 Article 35.

Commission Initiated Investigations per Real Estate Trading Act Section 17(2)

Failure to Cooperate with Audit Process

A broker was asked repeatedly by a NSREC Auditor for real estate documentation and trust account records required for the purpose of conducting a modified brokerage audit. The broker had a condition on their licence as a first-time broker, per By-law 309 (b). The Auditor had to make repeated attempts to collect the documentation from the broker. The broker was notified that continued failure to cooperate with the audit may result in their licence being suspended. The broker eventually cooperated with the audit. As a result of the brokers initial failure to cooperate with the audit, the Registrar initiated an investigation.  

The evidence supported the broker’s previous audit followed a similar demonstration of the broker not cooperating. Brokers are required to cooperate during the audit process and respond to Commission requests. The broker had been through two previous audits. Not cooperating with an audit is a violation of Commission By-law 702 Article 35.

As a result of the transaction file discrepancies identified in the brokerage audit report, the Registrar expanded the scope of the investigation to include the repeated transaction file discrepancies identified in previous audit reports.

The evidence supported that the broker did not demonstrate any improvement in correcting the transaction file discrepancies from the previous audit reports. Despite the broker having to provide an action plan as a result of previous audit findings and a warning from the Registrar to correct the discrepancies, the same transaction file discrepancies were identified as well as other discrepancies.

The transaction file discrepancies identified in this case, and in consideration of previous audit findings, was a violation of Commission By-law 704(d).

The broker was presented with a settlement agreement detailing the above violations and a total penalty of $1,000. ($500 for each violation.) The broker rejected the voluntary settlement agreement and the matter was referred to the Commission’s Discipline Committee and a discipline hearing was scheduled. This resulted in the Commission retaining legal counsel for the hearing. Prior to the scheduled hearing date, the broker requested to settle the matter without a discipline hearing. The broker accepted the two violations and agreed to pay legal costs incurred by the Commission.

Penalty

The broker was fined $500 for violating Commission By-law 702 Article 35, and $500 for violating Commission 704(d). The broker is also required to pay legal fees incurred by the Commission in the amount of $4,000.

Disciplinary Newsletter

IMPORTANT NOTICE: Audit and record keeping policies have been updated as of January 2025. This newsletter references outdated content, in accordance with the version in effect at time. For current information on audits, click HERE.

November 2022

Volume 12 Edition 2

IN THIS ISSUE

Introduction

Detailing Investigations
Publishing Disciplinary Decisions

Public Initiated Investigations

Case #1: Not Reviewing Showing Instructions
Case #2: Not Confirming Facts Led to Misleading Advertising
Case #3: Unprofessionally Discrediting a Fellow Licensee
Case #4: Overstating Square Footage
Case #5: Disclosing Information Not in Client’s Best Interest
Case #6: Not Protecting Client’s Interests
Case #7: Not Following COVID-19 Protocols

NSREC Initiated Investigations

Case #1: Broker Not Maintaining Records

DETAILING INVESTIGATIONS

The Disciplinary Newsletter does not detail every case the Commission investigates. Rather, these cases were found to be the most useful as a learning resource.

PUBLISHING DISCIPLINARY DECISIONS

The Commission Disciplinary Newsletter publicizes decisions in accordance with the Commission by-law 839.

PUBLIC INITIATED INVESTIGATIONS

Not Reviewing Showing Instructions

Prospective buyer customers viewed a property with a licensee who was not the seller’s representative. The buyer brought their dog to the viewing. During the viewing, the dog ingested rat poison, which resulted in the dog requiring medical attention from a veterinarian. The buyers submitted a complaint to the Commission alleging that the seller’s licensee was aware of the rat poison at the property and failed to communicate this information to the licensee who facilitated the viewing.

The evidence supported that the seller’s licensee took adequate steps to make sure that the licensee who facilitated the viewing was aware of the rat poison. The ShowingTime app confirmation included a clear statement about the presence of rat poison at the property, which was provided to the licensee who facilitated the viewing with the buyers. The seller’s licensee stated they also verbally reminded the licensee of the presence of rat poison during a phone call prior to the viewing. The licensee who facilitated the viewing did not recall this conversation and did not review the showing instructions on the ShowingTime app confirmation.

The Registrar expanded the scope of the investigation to include the conduct of the licensee who facilitated the viewing with the buyer customers. The evidence supported that the licensee did not verify the information on the ShowingTime app confirmation and as a result, violated Commission By-law 702 Article 35.

The licensee who facilitated the viewing was unaware the buyers were bringing their dog to the viewing. The evidence supported that once the licensee became aware of the presence of the dog, prior to entering the property, they failed to have any conversations with the buyers concerning the dog and allowed the dog to enter the property without expressed permission from the seller. As soon as the licensee became aware of the presence of the dog, they were required to advise the buyer that the dog cannot enter the property without permission from the seller. Failure to so do, constituted a violation of Commission By-law 702 Article 35.

Licensees should never allow pets to enter a property, either their own or a buyer’s, without expressed permission from the seller.

The licensee who facilitated the viewing was charged with and agreed to having violated two counts of Commission By-law 702 Article 35.

PENALTY

The licensee was fined a total of $1,000; $500 for each violation of Commission By-law 702 Article 35.       

Not confirming Facts Led to Misleading Advertising

Out of town buyers returning to Nova Scotia found an ideal property to build their retirement home, a vacant lot which bordered a golf course. According to the MLS® listing cut and their discussions with the listing licensee, golf privileges would be included with the purchase. The buyers purchased the property and were customers of the seller’s brokerage. After closing, the buyers were advised by the General Manager of the golf course that the golf privileges associated with the subject property had been revoked due to the previous owner’s failure to pay the yearly sustaining fee to the golf club. The buyers submitted a complaint to the Commission alleging that the seller’s licensee misrepresented the property by advertising the golf privileges when in fact they were revoked.

The evidence supported that when listing the property, the seller’s licensee accessed the deed and noted the golf privileges were detailed in the deed. The licensee did not confirm this information with the sellers and referenced the golf privileges on the MLS® advertisement. The sellers were aware the golf privileges had been revoked. The licensee advised they read the MLS® listing addendum to the sellers and the sellers did not correct them concerning the existence of the golf privileges and signed off on the addendum.

The golf privileges were a major selling feature for this property. The deed clearly stated that the golf privileges can be revoked in certain circumstances, and in this case they were.

Licensees have an obligation to independently verify information which a reasonably prudent licensee would discover, prior to advertising. Knowing there was a possibility that the golf privileges could be revoked, assuming the sellers would correct any errors on the MLS® addendum was not property verification. Failing to verify this information prior to advertising was a violation of Commission By-law 708 (a) (i), (ii), and (iii).

The seller’s licensee was charged with and agreed to having violated Commission By-law 708 (a) (i), (ii), and (iii) for failing to verify the status of the golf privileges prior to advertising.  

PENALTY

The seller’s licensee was fined $500 for violating Commission By-law 708 (a) (i), (ii), and (iii).

Unprofessionally Discrediting a Fellow Licensee

The Commission received a complaint from a consumer who listed their property for sale with a real estate licensee. The consumer alleged that another real estate licensee (with whom they had used the services of in the past and had a personal connection with), was upset the consumer did not use their services when listing the property. As a result, the licensee in question sent unprofessional text messages to the consumer as well as an unprofessional e-mail to the listing licensee. 

The evidence supported that the licensee sent text messages to the consumer attempting to dissuade them from listing their property with the listing licensee. They referred to the listing licensee as being a ‘discount broker’ and stating that in this market the consumer would ‘need the experience level of a realtor who is full time’. The licensee further stated they had ‘far more experience’ than the other licensee.

The text messages were inappropriate and an attempt to discredit the listing licensee. Licensees must be held to a high standard of professionalism. By sending these text messages, negatively commenting on another licensee, the licensee demonstrated unprofessional conduct, a violation of Real Estate Trading Act Section 22 (1) (a).

The evidence further supported the licensee also sent an e-mail to the listing licensee expressing their displeasure with the remuneration agreed to by the listing brokerage and consumer. Remuneration is completely negotiable between brokerages and consumers. This e-mail was distasteful and unprofessional. 

Unrelated to the allegations, the licensee continually and incorrectly referred to the complainant as their client. The evidence supports that the licensee represented the complainant when they originally purchased the subject property so in that case the complainant was a customer of the brokerage. The licensee stated they pulled favours and did their job to get the complainant a deal and great investment when they purchased the property. This demonstrated the licensee’s lack of understanding of the basics of agency relationships.

The licensee was charged with and agreed to having violated Real Estate Trading Act Section 22 (1) (a) for sending unprofessional test messages to a consumer.

PENALTY                     

The licensee was fined $750 for violating Real Estate Trading Act Section 22 (1) (a). The licensee was also issued a written warning for the e-mail sent to the listing licensee and for not understanding the basics of agency relationships.

Overstating Square Footage

A buyer had an accepted agreement on a new construction home. A key factor in their decision to purchase the home was the Total Living Area (TLA), which was considerably higher than comparable properties. Shortly prior to closing the buyer observed an excavator making changes to the backyard which created a large slope and removed any level yard. At this point, the buyer submitted a complaint against the seller’s licensee alleging that the TLA was overstated by approximately 600 square feet on the MLS® listing cut. The buyer further alleged that the seller’s licensee was aware the grade of the backyard would be changed and purposely withheld that information because it devalued the property.

The seller’s licensee was asked to demonstrate to the Commission’s Investigator how they determined the TLA when listing the property. The licensee provided a copy of the building plans and broke down their measurements in some detail.

The Commission determined that the listing licensee’s TLA was overstated by 451 square feet. Licensees have an obligation to ensure all information they advertise is correct and accurate. Although the Commission does not set out a standard method for measuring, the TLA the listing licensee advertised, based on the measuring method they employed, was significantly overstated. This was a violation of Commission By-law 708 (a) (i), (ii), and (iii).

Respecting the allegation pertaining to changes to the grade of the backyard, the evidence did not support that the licensee was aware of this information until it was brought to their attention by the buyer’s licensee.

The licensee was charged with and agreed to having violated Commission By-law 708 a) (i), (ii), and (iii) for inaccurately advertising the total living area of the subject property whereby the square footage was significantly overstated.

PENALTY

The seller’s licensee was fined $500 for violating Commission By-law 708 (a) (i), (ii), and (iii).

Disclosing Information Not in Client’s Best Interest

The Commission received a complaint from a seller who had recently sold their property. Their complaint was against their representative. The complainant alleged that prior to the preparation of the buyer’s offer, the buyer’s licensee had a conversation with the seller’s licensee wherein the seller’s licensee relayed that the sellers would probably accept an offer in the $420,000 range. According to the complainant, this information was relayed to them by their licensee during a phone call.

The seller’s licensee confirmed they had a phone call with the buyer’s licensee prior to the facilitation of the offer, although they disputed the details of the call. The licensee explained that when asked by the buyer’s licensee what their seller client would accept for a purchase price, they replied that an offer in the $420,000 range would be a good starting point but they did not disclose a final purchase price that the seller would expect.

Although there was insufficient evidence to determine whose version of the conversation was most accurate, the evidence supported that the seller’s licensee disclosed to the buyer’s licensee a potential starting purchase price. By relaying this information to the buyer’s licensee, the seller’s licensee disclosed their client’s motivation without the seller’s consent.  The seller’s licensee should not have answered the buyer’s licensee’s question without first relaying the conversation to their clients and following their instruction on how to respond, if at all. This was not done and as a result, the seller’s licensee did not protect their client’s best interests and violated Commission By-law 702 Article 2.

The seller’s licensee was charged with and agreed to having violated Commission By-law 702 Article 2.

PENALTY

The seller’s licensee was fined $500 for violating Commission By-law 702 Article 2.

Not Protecting Client's Interests

A seller listed their property for sale with a real estate licensee. Shortly after, the seller contacted the licensee on numerous occasions to address a few concerns; the pictures they provided the licensee to update the MLS® system had not been uploaded and the for sale sign was not placed on the property. As a result of not receiving satisfactory action from the licensee with respect to their concerns, the consumer filed a complaint with the Commission. The complainant further alleged they were not provided with a true copy of the listing documentation, including the Seller Designated Brokerage Agreement (SDBA).

Respecting the pictures, the evidence supported the licensee did not update the pictures on the MLS® system despite being asked to so by their seller client on three occasions. The license had advised the seller that the pictures were sent to a brokerage administrator to update; however, the evidence did not support this request was made.

Regarding the for sale sign, the licensee was required to place one on the property per the SDBA. Despite this being brought to their attention by the seller, a for sale sign had still not been placed on the property when the complaint was submitted to the Commission, which was over two months after the property was listed.

By failing to update the pictures and place a for sale sign on the property, the licensee did not follow the lawful instruction of their client. Their actions did not protect the best interests of their client, which was a violation of Commission By-law 702 Article 2.

Finally, regarding the real estate documentation, the evidence supported all documentation was signed by both parties using an electronic signature platform. When using electronic signature platforms, licensees are required to explain to consumers how to retrieve executed copies of documentation signed electronically and if there is a time frame to do so. In this case, the complainant alleged they were not able to access the documentation electronically and so it would appear that this was not properly explained to them. The licensee was issued a written warning reminding them of their obligation to thoroughly explain the process of using electronic signature platforms with consumers and to ensure they know how to obtain a true copy of all executed documentation.

The seller’s licensee was charged with and agreed to having violated Commission By-law 702 Article 2.

PENALTY

The seller’s licensee was fined $500 for violating Commission By-law 702 Article 2 and issued a written warning for not thoroughly explaining to their client the process of using an electronic signature platform.

Not Following COVID-19 Protocols

A seller listed for property for sale with a real estate licensee and instructed that all potential buyers and their representatives must wear masks and sanitize during viewings. This instruction was clearly identified by the seller’s licensee on MLS® listing cut and the ShowingTime app. Despite this instruction, the seller’s exterior video surveillance captured a potential buyer and their licensee entering the property without wearing a mask. The seller then submitted a complaint to the Commission.

The evidence supported that the buyer’s licensee and their client entered the property through the front door, viewed the backyard and then exited the property through the front door without masks on their faces, as required by the seller.  

Wearing masks while conducting trading activities was not a requirement of the provincial health department, however, sellers are able to set these requirements for their property, as the complainant did in this case. The buyer’s licensee had an obligation to ensure that all parties entering the property were following the seller’s instruction by wearing masks. Failing to do so constituted unprofessional conduct, a violation of Commission By-law 702 Article 35.

The licensee was charged with and agreed to having violated Commission By-law 702 Article 35 for not ensuring all parties were wearing masks, as required.

PENALTY

The licensee was fined $500 for violating Commission By-law 702 Article 35.

COMMISSION INITIATED INVESTIGATIONS PER REAL ESTATE TRADING ACT SECTION 17(2)

Broker Not Maintaining Records

The Commission’s Compliance Auditor conducted a modified trust audit for a brokerage. As a result of the audit, it was determined that the broker was holding unresolved trust funds in their trust account. Per Real Estate Trading Act 32 (6A), after holding unresolved trust funds for a period of two years from the date of the deposit, brokers must submit the funds along with a copy of the transaction file to the Commission. The broker submitted a trust cheque to the Commission for the amount but was unable to locate a complete copy of the transaction file, which they were required to maintain. As a result, the Registrar initiated an investigation.

Brokers are responsible to ensure that they maintain all transaction and trust records for a period of seven years, this includes all records from terminated transactions. The evidence supported that the broker did not maintain a copy of the transaction file and as a result violated Commission By-law 707.

The broker was charged with and agreed to having violated Commission By-law 707.

PENTALTY

The broker was fined $1,000 for violating Commission By-Law 707.