A realtor in British Columbia has been suspended and fined $16,000 for misrepresenting assignment sale commissions. The Real Estate Council of British Columbia (RECBC) found that the realtor, identified as Mr. X, had violated the Real Estate Services Act and the Council Rules.
According to the RECBC, Mr. X had entered into an agreement with a developer to market and sell units in a new development. The agreement stated that Mr. X would receive a commission of 5% on the sale of each unit. However, Mr. X failed to disclose to potential buyers that he would also receive an additional commission of 3% on the assignment of the units.
Assignment sales occur when a buyer sells their pre-construction unit before the building is completed. In these cases, the original buyer assigns their contract to a new buyer, who then takes over the contract and pays the original buyer the difference between the original purchase price and the current market value. This practice is common in hot real estate markets, such as Vancouver, where buyers often purchase pre-construction units as investments and then sell them before the building is completed.
The RECBC found that Mr. X had failed to disclose the additional 3% commission to potential buyers, which is a violation of the Real Estate Services Act and the Council Rules. The Council also found that Mr. X had misrepresented the assignment sale commissions to buyers, leading them to believe that he would only receive the 5% commission stated in the agreement with the developer.
As a result of these findings, Mr. X has been suspended for 60 days and fined $16,000. He has also been ordered to complete a course on real estate ethics and standards of conduct.
The RECBC has reminded all real estate professionals to fully disclose all commissions and fees to their clients, including any additional commissions on assignment sales. Failure to do so can result in disciplinary action, as seen in the case of Mr. X.
This case serves as a reminder to buyers to carefully review all contracts and agreements before making a purchase, and to ask their realtor about any potential commissions or fees that may be involved. It also highlights the importance of transparency and ethical conduct in the real estate industry.
The RECBC has stated that they will continue to monitor the situation and take action against any real estate professionals who fail to comply with the rules and regulations set out by the Council.
