Consent Order

REAL ESTATE COUNCIL OF BRITISH COLUMBIA

In the matter of the Real Estate Services Act

S.B.C. 2004 ch. 42

AND in the matter of a Consent Order pursuant to Section 41 of the Real Estate Services Act

Complaint: Contravention of sections 35(1)(a), 35(1)(d), 30, 27(1) and (2) of the Real Estate Services Act, Part 7 and 8 of the Council Rules, sections 7-7(4), 8-2(c), 8-3, 7-5, 4-6, 5-1, and 3-1 of the Council Rules/Professional misconduct, incompetence, withdrawals from trust account, payment into trust account, brokerage accounts and financial requirements, brokerage records, advertising, contractual matters, and managing broker responsibilities

Issue: Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty, Nanaimo, brokerage, committed professional misconduct within the meaning of section 35(1)(a) of the Real Estate Services Act in that it contravened various provisions of the Real Estate Services Act and the Council Rules in that it:

1. failed to have a managing broker actively engaged in the management and supervision of the conduct of a licensee in that it failed to monitor his contracts to ensure that deposits were received by the brokerage in accordance with the contract, promptly deposited into the brokerage trust account and, where deposits were not received in accordance with the contract, that the transactions were properly documented and the parties duly notified;
2. failed to maintain proper books, accounts and other records, in accordance with Part 7 and 8 of the Council Rules, including;
3. failing to include the bank commission trust account in the list of bank accounts accompanying the Accountant 's Report, in accordance with section 7-7(4) of the Council Rules;
4. failing to prepare general account reconciliations, in accordance with section 8-2(c) of the Council Rules;
5. failing to keep separate trust ledgers and to prepare timely monthly trust liability and asset reconciliations for the commission trust account, in accordance with section 8-3 of the Council Rules; and
6. failing to make proper withdrawals from a commission trust account, including ensuring there were no shortages in trust accounts creating overdrafts, in accordance with section 30 of the Real Estate Services Act and section 7-5 of the Council Rules;
7. failed to ensure the brokerage immediately notified all parties to an agreement when a deposit has not been received into the trust of the brokerage, in accordance with the terms of the agreement;
8. failed to ensure that advertising by the brokerage 's licensees was compliant with the provisions of section 4-6 of the Council Rules;
9. failed to ensure that all brokerage rental property management agreements complied with the specific content requirements, in contravention of section 5-1(1)(4) and 5-1(5) of the Council Rules;
10. failed to ensure that when the brokerage or a representative of the brokerage received or held monies that were not made payable to the brokerage, the parties entered into a separate written agreement clearly stating that subsections 27(1) and (2) of the Real Estate Services Act did not apply; and
11. failed to ensure a brokerage representative, while acting as a limited dual agent, put into place a contract that clearly set out the rights and responsibilities of the parties, including the name of the seller or alternatively the manner in which the seller would purport to cause title to be transferred on closing, full particulars of the vendor take back mortgage and full documentation including extensions and their terms.

Issue: Allan Joseph Lupton, managing broker, Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty, Nanaimo, committed professional misconduct within the meaning of section 35(1)(d) of the Real Estate Services Act in that, contrary to his duties as managing broker, as set out in section 3-1 of the Council Rules, he:

1. failed to be actively engaged in the management and supervision of the conduct of a licensee as the representative for the selling agent pursuant to a contract dated July 24, 2005 involving property with IS as buyer and GH as seller and pursuant to a contract dated August 19, 2005 involving property with JW as buyer and MA as seller;
2. failed to monitor a representative 's contracts as noted above to ensure that deposits were received by the brokerage in accordance with the contractual terms, deposits were promptly deposited into the brokerage trust account and, where deposits were not received in accordance with the contract, that the transactions were properly documented and the parties duly notified;
3. failed to ensure that the brokerage maintained proper books, accounts and other records, in accordance with Part 7 and 8 of the Council Rules, including:
   1. as set out in section 7-7(4) of the Council Rules, failing to include a bank commission trust account in the list of bank accounts accompanying the Accountant 's Report;
   2. as set out in section 8-2(c) of the Council Rules, failed to prepare general account reconciliations;
   3. as set out in section 8-3 of the Council Rules, failed to keep separate trust ledgers and to prepare timely monthly trust liability and asset reconciliations for the commission trust account; and
   4. failed to ensure withdrawals from the brokerage trust account were made in accordance with section 30 of the Real Estate Services Act and section 7-5 of the Council Rules;
4. failed to ensure the brokerage immediately notified all parties to an agreement when a deposit had not been received into the trust of the brokerage, in accordance with the terms of the agreement;
5. failed to ensure that advertising by the brokerage 's licensees was compliant with the provisions of section 4-6 of the Council Rules;
6. failed to ensure that all brokerage rental property management agreements complied with the specific content requirements, in contravention of section 5-1(1)(4) and 5-1(5) of the Council Rules;
7. failed to ensure that when the brokerage or a representative of the brokerage received or held monies that were not made payable to the brokerage, the parties entered into a separate written agreement clearly stating that subsections 27(1) and (2) of the Real Estate Services Act did not apply; and
8. failed to ensure a brokerage representative, while acting as a limited dual agent, put into place a contract that clearly set out the rights and responsibilities of the parties, including the name of the seller or alternatively the manner in which the seller would purport to cause title to be transferred on closing, full particulars of the vendor take back mortgage and full documentation including extensions and their terms.

Results

Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty was reprimanded for professional misconduct as described above after an Agreed Statement of Facts, Proposed Acceptance of Findings and Waiver was entered into between the Real Estate Council and Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty and a Consent Order was issued. Further, Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty was ordered to pay audit costs to the Council in the amount of $1,387.50 and pay a discipline penalty to the Council in the amount of $2,000.00. In addition, Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty and Allan Joseph Lupton are jointly and severally liable to pay enforcement expenses to the Council in the amount of $750.00.

Allan Joseph Lupton 's managing broker 's licence is suspended for two (2) years commencing February 27, 2008 for professional misconduct as described above after an Agreed Statement of Facts, Proposed Acceptance of Findings and Waiver was entered into between the Real Estate Council and Allan Joseph Lupton and a Consent Order was issued. Further, Allan Joseph Lupton and Nanaimo Realty Co. Ltd. dba Royal LePage Nanaimo Realty are jointly and severally liable to pay enforcement expenses to the Council in the amount of $750.00. Mr. Lupton is immediately eligible to be licensed as an associate broker or representative.