IN THE MATTER OF THE REAL ESTATE ACT, C. R-1.3 AND IN THE MATTER OF KATHERINE CROWE DECISION OF THE SASKATCHEWAN REAL ESTATE COMMISSION Commission File: #2008-05 Before: A Saskatchewan Real Estate Commission Hearing Committee comprised of the following: Randal C. Tauet - Chairperson Larry Gingerich Terry Powell Jahn Puderak Appearances: Ed Miller, on behalf of the Investigation Committee Katherine Crowe, Former Registrant - Not Present Hearing Date: September 17, 2009 Wntten Decision" Octoher 13, 2009 1
The Mitigation Hearing was held September 17,2009 at the Saskatoon Club, 417-21 I Street East, Saskatoon, Saskatchewan before a Hearing Committee ("the Committee") of the Commission. The Statement of Facts and Admissions dated August 11, 2009 provided particulars of Katherine Crowe's violation and admissions. CHARGE and ADMISSION OF MISCONDUCT The registrant was charged with and has admitted, in the Statement of Facts and Admissions, to professional misconduct as follows: Count #1 Katherine Crowe plead guilty to a charge of professional misconduct contrary to Section 39(1)(a) of The Real Estate Act which states: "Professional misconduct is a question of fact, but any matter, conduct or thing, whether or not disgraceful or dishonourable, is professional misconduct within the meaning of this Act, if it is harmful to the best interests of the public, the registrants or the Commission. " She breached this section between May 2007 and rebruary 2008 (both months inclusive) by doing one or more of the following: e engaging in property management activities for the Buyers outside her broker's knowledge and/or direl:tion;... receiving rent monies for property management activities on behalf of the Buyers and not depositing those rent monies into her brokerage's real estate trust account: and @ not delivering property management information to her brokerage or consulting her brokerage about engaging in property management activities. Count #2 Katherine Crowe plead guilty to a charge of professional misconduct contrary to Section 39( l)(c) of The Real Estate Ace by breaching Section 8(4) of the Real Estate Regulations whiclt,tates: <. A registrant shall respond, in writing, to the request made pursuant to subsection (3) and deli rer the response to the Review Officer by the date set out in the request. ' @ Katherine (rowe breached this section between February 29, 2008 and March 30, 2009 by falling \ ithout reasonable excuse, to ever respond in writing to the CommiSSIOn's Review Oftlcer. LEGISLATION Section 39(1 )(a) of TIle Real Estate Ace states: "Professional misconduct is a question of fact, but any matter, conduct or thing whether or not disgraceful or dishonourablc is professional misconduct within the meaning of this Act, if it is a breach of this Act, the regulations or the bylaws or any terms or restrictions to which the registration is subject." 2
FACTS In accordance with subsection 9(4) of 17ze Real Estate Regulations ("the Regulations"), the Committee accepted Katherine Crowe's Statement of Facts and Admissions, which include the following relevant points: 1. Katherine Crowe was continuously registered under the provisions of The Real Estate /1('t in the Province of Saskatchewan from April 18,2005 to August 23, 2005 and again from January 9, 2006 to February 27, 2008. 2. Katherine Crowe successfully completed the Real Estate Practice in Saskatchewan course in April 2005 and was granted equivalency to the Principles of Mortgage Financing; Principles of Real Estate Appraisal and Principles of Real Property Law courses. 3. Katherine Crov.,fe completed the 2004-2005 and 2005-2006 continuing professional development seminars. 4. Her broker, Mike Duggleby, terminated her Certificate of Registration with Royal LePage Regina Realty on February 27. 2008. Ms. Crowe engaged in property management activities in Melville, Saskatchewan without her broker's knowledge or approval. S. In early 2007 Ms. Crowe met the Buyers from Calgary, Alberta during their Internet search for investment properties in Saskatchewan. The Buyers used the Internet to locate Ms. Crowe as a salesperson with Royal LePage Regina Realty and trading in real estate in Melville, Saskatchewan. 6. Katherine Crowe assisted the Buyers to write two Residential Contracts of Purchase and Sale forms to buy two properties from the Seller. The first property sold for $14,500 and the second property sold for $18,000. 7. Conditions In both offers required thal the Buyers obtain a satistactory building inspection on or before May 2007. Ms Crowe recommended a building inspector who charged and rect:ived from the Buyer~, S300 for each Inspection completed. Unknown to the Buyers at that tim~, the building inspector was the common law husband of the Seller of the two propertie. 8. 'lhe Buyers accepted the building inspeclion reports and Ms. Crowe'~ pic.tun.:s and descriptions of the properties before deciding to remove all subject to conditions In the purchase the properties, sight unseen. 9. rile Buyer. hired Ms. Crowe as their property manager in May 2007 to rent our the properlies while they remained in Calgary, Alberta. The Buyers severed her. ervices in August 2007 and Ms. Crowe ceased properly management for them. 10. While Ms. Crowe property managed for the Buyers, she collected cash rents from tenants and deposited the net amount (gross rent minus her 10% fee) into their 3
designated TD Canada Trust bank account. Katherine Crowe used the INTERAC money transfer process to send and receive money to and from the Buyers. I, 1. A Summary of Revenue and Expenses complete with supporting documents as prepared by the Buyers shows Ms. Crowe's 10% management fee for services; net rents of $1,405.00 that she electronically transferred to the Buyers; and $795 received by Ms. Crowe from the Buyers for expenses and rees. 12. The Saskatchewan Real Estate Commission received a written complaint in January 2008 outlining the Buyers' concerns about Ms. Crowe and her property management. Ms. Crowe received letters of enquiry from Review Officer, Ed Miller and never responded in writing to the questions posed. In a telephone conversation \-vith Ed Miller on or about April 3, 2008, Ms. Crowe reported a mailing address of Box 2590, Melville, Saskatchewan. 13. Ms. Crowe left the real estate industry In March 2008 and has no intention of reapplying. REPRESENTATIONS The Investigation Committee representative, Ed Miller, confirmed that Ms. Crowe is a first time offender under the Act. He confirmed that her registration had been terminated. Mr. Miller advised that Ms. Crowe voluntarily agreed not to reapply for registration. He stated that it is clear that Ms. Crowe practiced property management without the knowledge or consent of her hrokcr. Mr. Miller suggested that such hehaviour brings the real estate industry into disrepute. He further stated that Ms. Crowes lack of response to the investigation led to an extended length of investigation. The Investigation Committee recommended a letter of reprimand on each count and a tine of $2,500.00 for breach of Section 39(l)(a) of the Act and a tine of S1,500.00 for hreach of eetlon 8(4) ot the Regulations. Mr. Miller suggested this would stress to the public and to other registrants the importance of responding and that timelines are Important. He said that Ms. Crowe knew of the request for a response and she chose to ignore it. This will also be of general deterrence to other regl<;trants for not responding to requests from the investigators. Mr \-tiller referred the Committee to the Tyler Milnthorp case (2007-91) where he recei cd a fine of $2,500.00 for unauthorized property managem nt activities and the Trevor Millsap case (2004-63) where he received a fine of $1,500.00 for failin! to respond in a timely manner to a request from an investigator. DECISION In accordance with TIle Real Estate Act and Regulations, the,ommittee made the following l)flh.:is. 4
Count 1 a) Katherine Crowe receive an order of reprimand for the violation of Section 39( I)(a) of the Act; b) Katherine Crowe, prior to December 15, 2009, pay to the Saskatchewan Real Estate Commission, a $3,500.00 fine for the said violation of the Act; and c) Any registration held by Katherine Crowe's registration shall be suspended if she fails to pay any portion of the fine within the said period of time; Count 2 a) Katherine Crowe receive an order of reprimand for the violation of Section 8(4) of the Regulations; b) Katherine Crowe, prior to December IS, 2009, pay to the Saskatchewan Real Estate Commission, a $2,000.00 fine for the said violation of the Regulations; and c) Any registration held by Katherine Crowe's registration shall be suspended if she fails to pay any portion of the fine within the said period of time RATIONALE The Committee, in considering the disciplinary action, considered Katherine Crowe's lack of previous sanction history and the relatively short length of time she had been in the real estate industry. The Committee wishes to make it clear to all registrants, both property managers and brokers that the brokerages must be involved in the property management and know what is taking place. This matter is much more serious than the Milnthorp file as M,. Crowe knew what she was doing and knew she hould have involved her broker. The Committee also wants it known that the manner in which the building inspection was done was inappropriate and not to be condoned. The parties should have had an independent inspection done, so there was no possibility of alleged improper behaviour. She owed a duty to the Buyers to disclose all relevant information to them. The lack of response to the investigator is also a problem as it leads to lengthy and.,'ometimes, unnecessary investigations. Ms. Crowe knew of the request for information and simply chose to ignore it. This is unacceptable behaviour and will lead to serious consequences for registrants if they do not respond to the request in a timely and appropriate manner. The Commitree is concerned that a breach of this section leads to a loss of respect for (he investigation process in the eyes of the public. The public is entitled (Q a timely investigation and the delays cannot be condoned. Dated at~/kj:uoon, Saskatchewan this 13 1h day of October, 2009. I' J I 5