DISCIPLINE DECISION IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO

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1 Real Estate Council of Ontario BETWEEN: DISCIPLINE DECISION IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO MANAGER OF COMPLAINTS, COMPLIANCE AND DISCIPLINE REAL ESTATE COUNCIL OF ONTARIO - AND- DORIS SIMON-SHATZ and KIMBERLEY THORNE DATE OF DECISION: October 28, 2009 FINDINGS: Doris Simon-Shatz In violation of Rules 2, 14, 21, 42 and 46 of the RECO Code of Ethics PENALTY: Administrative Penalty of $5, payable to RECO within 90 days of sending this decision. FINDINGS: Kimberley Thorne In violation of Rules 2, 14, 21, 42 and 46 of the RECO Code of Ethics PENALTY: Administrative Penalty of $11, payable to RECO within 6 months of sending this decision. Successful completion of the REIC Ethics Course and provide RECO with confirmation of successful completion within 6 months of sending this decision. COSTS AND EXPENSES: N/A WRITTEN REASONS: REASONS FOR DECISION INTRODUCTION The hearing was held on October 28 th 2009 and proceeded as an Agreed Statement of Facts and Joint Submission as to Penalty. The Agreed Statement and Joint Submission was submitted to the Panel by RECO's Counsel. The Respondent, Doris Simon-Shatz, did not Page 1 of 7

2 attend. The Respondent, Kimberley Thorne, did attend. The Agreed Statement and Joint Submission read: AGREED STATEMENT OF FACTS AND JOINT SUBMISSION AS TO PENALTY 1. Ms. Kimberley Thorne ( Thorne ) is a Member of the Real Estate Council of Ontario ( RECO ) and registered as a salesperson pursuant to the Real Estate and Business Brokers Act, 2002 (the Act ). 2. Ms. Doris Simon-Shatz ( Simon-Shatz ) is also a Member of RECO and is registered as a salesperson pursuant to the Act. 3. Brokerage A is also a Member of RECO and is registered as a broker pursuant to the Act. Brokerage A employed, at all material times, Thorne and Simon-Shatz. 4. Buyer Representative B is a Member of RECO and is registered as a broker pursuant to the Act. Buyer Representative B is the principal broker of Brokerage B. Summary of Allegations: 5. Seller A1 and her daughter, Seller A2 were the owners of a Property described as 1- A Street in City A (the Property ). 6. Brokerage A through its representatives, Simon-Shatz and Thorne, were retained June 29, 2004 by Seller A1 to act as the listing salespersons with respect to the Property. The listing price of the Property was $375,000. However, the listing agreement only bears the name and signature of Seller A1 and not Seller A2. 7. The MLS listing information showed Seller A1 as the only seller of the Property. 8. On July 20, 2004 Brokerage C (Buyer C as buyer) presented an offer dated July 20, 2004 to purchase the Property, in the amount of $348,000, which was accepted by Seller A1 at about 6:30 p.m. the same day. This presentation was subsequent to an earlier presentation by Simon-Shatz, on or about July 13, 2004 and where verbal negotiations then took place. This transaction included a modified Confirmation of Co-operation and Representation Agreement ( CCR ), whereby the commission splits were re-negotiated to reduce the commission payable by the seller to the buyer s agent. The CCR acceptance reflected terms that were verbally agreed to by Simon-Shatz, Buyer Representative C and Individual A (Seller A1 s son). Thorne and Simon-Shatz were in attendance for the July 20 th offer presentation. 9. Also on July 20, 2004, at about 7:15 p.m., Brokerage B presented an offer dated July 19, 2004 to purchase the Property, on behalf of Buyer B, in the amount of $369,000, via his representative, Buyer Representative B. This offer was signed back by Seller A1 that same evening. Thorne was the only representative for the seller in attendance. 10. Both offers dealt with only July 20 th, were registered on the Property prior to the first offer presentation to Seller A1. One being in the form of a verbally negotiated sign back (the Buyer C offer, see paragraph 8) and the other being new. Page 2 of 7

3 11. Seller A1, being the only seller present at the negotiations, stated to RECO that she was advised by Thorne not to say anything about the Buyer C offer to Buyer Representative B, and further, that she was encouraged to not only hear Buyer Representative B s presentation, but to negotiate the terms of the Agreement with her. Seller A1 s son (not a seller) was also in attendance. 12. Buyer Representative B stated to RECO that she negotiated and finalized the offer from her buyer client based on a Power of Attorney signed by Buyer B and verbal instructions obtained during a phone call at the subject property. 13. Seller A2 did not review any of the offers, nor do they bear her signature. 14. Buyer Representative B and Thorne confirm that there was discussion of adding an escape clause to the Buyer B s offer such that it would only come into effect if the first offer fell through. Thorne states that this clause was requested from the outset (once the Buyer C offer had been accepted) and the failure to actually include the clause was initially an oversight. Upon discovering this error, Thorne states that she approached Buyer Representative B to make the appropriate amendment but that Buyer Representative B refused to include the clause on instruction of her client who directed her to accept the written sign back. 15. Thorne stated to RECO that she reviewed the Agreement of Purchase and Sale clause by clause with her client. 16. The MLS information was updated July 21, 2004 to include Seller A2 as an owner of the Property. 17. Due to the foregoing, litigation and delayed completion of the sale followed. Accordingly, it is alleged that Simon-Shatz acted in an unprofessional manner by: a) Failing to ensure that the names of both owners of the Property were included on the listing agreement, MLS information and the Agreement of Purchase and Sale; b) Failing to have both owners of the Property involved in the written acceptance of any offers presented; c) Failing to advise and/or present two offers on the Property before soliciting a response from her clients thereby treating both her clients and the other Member unfairly and dishonestly; d) Allowing one offer to be signed back before the second offer was presented; Thereby breaching the following Rules of the RECO Code of Ethics: Rule 2. Primary Duty to Client A Member shall endeavour to protect and promote the best interests of the Member s Client. This primary obligation does not relieve the Member of the responsibility of dealing fairly, honestly and with integrity with others involved in each transaction. Page 3 of 7

4 Rule 14. Presentation of Offers A Member shall present all written offers, including counter offers, as objectively and as quickly as possible. The Member shall establish a system to ensure that all Offers are received and presented on a timely basis, including in the absence of the Member. Rule 21. Advertising A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for properties and services, is not false, misleading or deceptive. Rule 42. Competence A Member shall render conscientious service with the knowledge, skill, judgement and competence, in conformity with this Code of Ethics and the standards which are reasonably expected of Members. When the Member is unable to render such a service, either alone or with the aid of another Member, the Member shall decline to act. Rule 46. Unprofessional Conduct A Member shall not engage in an act or omission relevant to the practice of the profession that, having regard to all the circumstances would by regarded by Members of the public as disgraceful, dishonourable or unprofessional. Accordingly, it is alleged that Thorne acted in an unprofessional manner by: a) Failing to ensure that the names of both owners of the Property were included on the listing agreement, MLS information and the Agreement of Purchase and Sale; b) Failing to have both owners of the Property involved in the written acceptance of any offers presented; c) Failing to advise her clients of two offers on the Property; d) Failing to advise and/or present two offers on the Property before soliciting a response from her clients thereby failing to treat both her clients and the other Member fairly and with integrity; e) Failing to provide competent representation to the Seller client by allowing her to sign back a second offer, causing the Seller client to effectively sell her Property twice in one day when both sign backs were accepted; RECO alleged that Kimberley Thorne breached the following Rules of the RECO s Code of Ethics: Rule 2. Primary Duty to Client A Member shall endeavour to protect and promote the best interests of the Member s Client. This primary obligation does not relieve the Member of the responsibility of dealing fairly, honestly and with integrity with others involved in each transaction. Rule 14. Presentation of Offers A Member shall present all written offers, including counter offers, as objectively and as quickly as possible. The Member shall establish a system to ensure that all Offers are received and presented on a timely basis, including in the absence of the Member. Page 4 of 7

5 Rule 21. Advertising A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for properties and services, is not false, misleading or deceptive. Rule 42. Competence A Member shall render conscientious service with the knowledge, skill, judgement and competence, in conformity with this Code of Ethics and the standards which are reasonably expected of Members. When the Member is unable to render such a service, either alone or with the aid of another Member, the Member shall decline to act. Rule 46. Unprofessional Conduct A Member shall not engage in an act or omission relevant to the practice of the profession that, having regard to all the circumstances would by regarded by Members of the public as disgraceful, dishonourable or unprofessional. JOINT SUBMISSION AS TO PENALTY A. Doris Simon-Shatz be Ordered to pay a penalty of $5,000 within 90 days of the Decision of the Discipline Committee being sent. B. Kimberley Thorne be Ordered to pay a penalty of $11,000 within 6 (six) months (handwritten revision) and to complete the REIC Ethics Course within six (6) months of the Decision of the Discipline Committee being sent. The undersigned consent that the matter of RECO and Doris Simon-Shatz be disposed of by way of this Agreed Statement of Facts and Joint Submission as to Penalty. [Doris Simon-Shatz Initials] Accordingly, the Agreed Statement of Facts and Joint Submission as to Penalty will be heard at RECO Chambers on a date chosen by the Real Estate Council of Ontario. Doris Simon-Shatz should contact RECO for the date this matter will be heard and advise whether they wish to attend. [Doris Simon-Shatz Initials] I, Doris Simon-Shatz, acknowledge that I was advised prior to signing this document that I have a right to be represented by legal counsel or an agent in this matter. [Doris Simon-Shatz Initials] The undersigned consent that the matter of RECO and Kimberley Thorne be disposed of by way of this Agreed Statement of Facts and Joint Submission as to Penalty. [Kimberley Thorne Initials] Page 5 of 7

6 Accordingly, the Agreed Statement of Facts and Joint Submission as to Penalty will be heard at RECO Chambers on a date chosen by the Real Estate Council of Ontario. Kimberley Thorne should contact RECO for the date this matter will be heard and advise whether they wish to attend. [Kimberley Thorne Initials] I, Kimberley Thorne, acknowledge that I was advised prior to signing this document that I have a right to be represented by legal counsel or an agent in this matter. [Kimberley Thorne Initials] [The Agreed Statement was duly signed by the Parties.] EVIDENCE OF THE PARTIES 1. Notice of Hearing, dated September 23, Agreed Statement of Facts and Joint Submission as to Penalty re: Kimberley Thorne 3. Agreed Statement of Facts and Joint Submission as to Penalty re: Doris Simon-Shatz FINDINGS BY THE PANEL Doris Simon-Shatz Having reviewed and considered the Agreed Statement of Facts, the Panel concluded that the Respondent breached Rules 2, 14, 21, 42 and 46 of RECO's Code of Ethics. Kimberley Thorne Having reviewed and considered the Agreed Statement of Facts, the Panel concluded that the Respondent breached Rules 2, 14, 21, 42 and 46 of RECO's Code of Ethics. PENALTY Doris Simon-Shatz The Panel is also in agreement with the Joint Submission of the parties as to penalty and accordingly makes the following order: Administrative Penalty of $5, to be paid to RECO within 90 days of sending this decision. Page 6 of 7

7 Kimberley Thorne The Panel is also in agreement with the Joint Submission of the parties as to penalty and accordingly makes the following order: Administrative Penalty of $11, to be paid to RECO within 6 months of sending this decision. Successful completion of the REIC Ethics Course and provide RECO with confirmation of successful completion within 6 months of sending this decision. Page 7 of 7

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