Managing a brokerage is no easy task. That’s why RECO istaking steps to better equip registrants for thechallenges and accountabilities that come with running

a business that facilitates some of the largest transactionsconsumers will ever make.

In early 2011, RECO will be introducing an updated broker courseto replace the current program. It will follow a similar interactivestructure as the newly-revamped RECO Update course with casestudies and simulation activities. “Salespersons who want tobecome brokers already have experience; they already knowhow to sell a property. The new course will reinforce theaccountabilities and new legislated responsibilities brokersobtain when they hold this registration status,” says Lisa Key,who is leading the development of the course at RECO. “Besidesupdating the real estate content, we will focus on developingbusiness acumen skills and financial intelligence.”

A great deal of research is going into the development of thisnew course. “We’ve examined broker education offerings inother jurisdictions in Canada and the US to identify best practices;we’ve also sought out input from current practising brokers,” shesays.

Existing brokers who are interested in taking advantage of thisnew course offering should note that they will be able to claim26 continuing education credits - 18 that can be used for thecurrent registration cycle plus eight that can be carried forwardto the next registration cycle.

The course will continue to be offered only through OREA RealEstate College. You’ll still be able to choose a study method thatworks best with your schedule: a combination of e-learning andclassroom instruction, correspondence and classroom instructionor 100 per cent classroom instruction, and pre-requisites willremain the same. To view pre-requisite information visit OREA’swebsite www.orea.com.

Fall 2010Page 2

Registrants must safeguard confidential information

Education Corner New broker course to be launched for early next year

It’s common for registrants to become privy to a wealth ofpersonal information about their clients. It becomes, to a greatextent, a relationship built on trust.

But with that trust comes responsibility. The results of an audit,released by the Office of the Privacy Commission of Canada (OPC)this past June, calls on mortgage brokers to ensure their practicesare adequately safeguarding personal information. This issomething that all real estate professionals should be concernedwith.

The release of information from the OPC audit follows a string ofincidents – 14 in the space of a few months in mid-2008 – wherethe privacy commission was notified of breaches involving thepersonal information of hundreds of people. According to astatement released by the OPC, “someone impersonating anexperienced mortgage agent downloaded credit reports forpeople who hadn’t even applied for a mortgage.”

In order to safeguard information, the privacy commissionrecommends adequate physical measures are in place, such asalarms and lockable filing cabinets.

Registrants should be aware of RECO’s rules where they pertainto unprofessionalism and a registrant’s best efforts to preventerror.

RECO’s Code of Ethics – specifically Reg. 580/05 of the Real Estateand Business Brokers Act, 2002 – deals with unprofessionalbehavior.S.38 A registrant shall use the registrant’s best efforts to preventerror, misrepresentation, fraud or any unethical practice inrespect of a trade in real estate.

S.39 A registrant shall not, in the course of trading in real estate,engage in any act or omission that, having regard to all of thecircumstances, would reasonably be regarded as disgraceful,dishonourable, unprofessional or unbecoming a registrant.

S.41 A brokerage shall ensure that every salesperson and brokerthat the brokerage employs is carrying out their duties incompliance with this Regulation. A broker of record shall ensurethat the brokerage complies with this Regulation.

In one case investigated by RECO, a registrant was disciplined forfailing to properly protect a client’s personal information. Avisitor to the brokerage was able to access the client’sinformation from the registrant, using it to present himself assomeone else to bank officials in order to get financing. Theregistrant was fined and put on probation. The brokerage wasalso fined.

Fall 2010 Page 3

Assuming contracts or existing financial obligations can bea confusing topic for buyers and sellers. It can sparkquestions about buy-out and replacement options, the

fees associated with this process and who is responsible for anycharges.

Under section 21 of the Code of Ethics, you are required to takereasonable steps to determine the material facts relating to thebuying or selling of a property and disclose any findings to buyersand sellers. This includes disclosing financial expenses andcontracts that buyers would be obligated to pay over and abovethe purchase price once they acquire the property.

The agreement of purchase and sale (APS) contains a provisionfor specifying chattels, fixtures and rental items included in thetransaction. Appliances and systems such as (but not limited to)hot water tanks, water softeners, alarm systems, furnaces, airconditioners and even their duct work may be rented, leased oreven financed.

In some cases, shared operating costs attached to parcels of tiedland (POTL) need to be considered and disclosed on the APS

including roadways, shared wells, sewage and water systems andrecreational facilities such as a golf course, park or recreationcentre.

It is a good idea to contact service providers to determine whatmeasures need to be taken for a smooth and easy transfer ofcontract from seller to buyer. Explain to buyers how and whencontracts are transferred to the new owner and document onthe APS who will notify the service provider and who will pay anycharges associated with the transfer.

When completing an agreement of purchase and sale:

1.Take the time to confirm in writing with the homeowner orlisting brokerage that all the rented, leased or financed itemsthat need to be included in the APS are in fact there.

2.Explain to buyers that they may have to carry on the rentalcontract or modify the agreement of purchase and sale toremove their responsibility to continue the contract.

3.Contact the service provider of the rented, leased or financeditem to find out the steps that need to be taken to assume orpay-out the contract.

Inheriting contracts or leasesIndicate how and when buyers will assume rental contracts

Fall 2010Page 4

Amonth ago, the Real Estate Council of Ontario’s legalteam successfully argued for jail time against a Barrie areaman, who defrauded investors of nearly $90,000, for

trading in real estate while unregistered. The man was sentencedto 15 months in jail, two years probation and ordered to payrestitution.

A few months earlier, that same team helped convict a formerregistrant for failing to deposit trust money into a real estatetrust account. That case resulted in a year in jail and finesamounting to $200,000.

In both cases, more than a year had passed between the dates ofthe infractions and the sentencing dates, requiring months of‘behind-the-scenes’ work . But it represents only a fraction ofwhat takes place within the walls of RECO’s legal department.Drafting contracts, advising managers, staff and the Registrar,and making court appearances – all in the pursuit of RECO’s goalto uphold integrity and foster confidence in Ontario’s real estateindustry – is more than enough to keep the department hopping.

At times, it can be difficult to hold a staff meeting where theentire team can get together, says Elizabeth Silcox, RECO’smanager of legal services.

Inside her office, her desk, table and just about any flat surface ispiled high with papers. Yet still, she often takes calls from bothregistrants and consumers who are confused as to the role ofRECO’s legal department.

In some cases, the calls come from registrants who have possiblycrossed a legal line who think RECO’s lawyers are there to helpthem. Other times, the calls come from consumers who feelthey’ve been crossed in some way by a registrant, and they wantlegal representation to fight back. But the legal department isn’tthere for them, she says. And it can’t even recommend a lawyerfor them to call. Instead, she tells them to turn to friends orcolleagues for referrals.

When people are charged with offences that fall under the RealEstate and Business Brokers Act, 2002 (REBBA 2002), the legaldepartment is there to represent the Registrar, she says, whetherit’s in court, in front of a License Appeal Tribunal or in appealsituations. But it may also be called on to look at equipmentcontracts at RECO, at employment contracts, or at sections ofREBBA 2002 that need to be interpreted.

From contracts to the courtroomInside the legal department at RECO

How RECO’s legal department helps:

• By advising RECO and the Registrar to carry out andperform their powers and duties under REBBA 2002 in amanner consistent with the objective and principle ofensuring a fair, safe and informed marketplace thatsupports a competitive economy.

How RECO’s legal department cannot help you:

• With legal representation or advice, whether you are aregistrant or consumer.

Michael* was offered a promotion within his organizationthat required him to relocate to Australia. He only had ashort period of time to organize his affairs before taking

on this new role. Michael wanted to sell his house in Torontobefore he moved across the world.

He worked with his listing brokerage to set up an attractivecommission plus bonus to any co-operating brokerage that couldbring in a buyer and complete the transaction within six weeks.The attractive offer worked, Michael’s house sold and closed fiveand a half weeks later.

RECO occasionally receives inquiries about co-operating brokeragecommissions. The Real Estate and Business Brokers Act, 2002(REBBA 2002) contains specific wording that outlines howcommission or remuneration should be paid to a brokerage froma consumer.

REBBA 2002 indicates that “All commission or other remunerationpayable to a brokerage in respect of a trade in real estate shall beeither an agreed amount or percentage of the sale price or rentalprice, as the case may be, but not both...” S.36.1 Act.

So how can Michael’s brokerage offer a commission percentage,plus a dollar amount bonus to a co-operating brokerage? Theanswer lies in how the listing agreement is structured from acommission perspective.

If the seller agrees to pay the listing brokerage a $10,000 flatcommission, the listing brokerage can pay the co-operatingbrokerage a percentage of the sale price plus a bonus as long asthe total remuneration comes out of the commission that is paidto the listing brokerage by the seller.

Commission or other remuneration paid to a brokerage by aconsumer can only be an agreed amount, or percentage of thesale/rental price – not both. The co-operating brokerage’scommission is considered an offer from the listing brokerage, paidby the listing brokerage, and is not subject to the restriction underREBBA 2002.

It is also important to keep in mind that co-operating brokeragesare required to disclose to buyers the amount of commission theywill receive.

In Michael’s situation, the co-operating brokerage would havehad to notify the buyer that it would receive a bonus if the dealsold and closed within six months of being listed.

For more information on commissions and remuneration, reviewsection 36 of the Act. You can access an Interactive Guide to REBBA2002 from RECO’s website www.reco.on.ca. You can also viewRECO’s Registrar’s Bulletin on commissions by clicking on thePublications and Resources tab located at the top of RECO’s homepage.

*The scenario described in this article is fictional and used forinformation purposes only.

Fall 2010 Page 5

Broker of Record CornerCo-operating brokerages required todisclose their commissions

Fall 2010Page 6

After months of searching for the perfect home, Annaand Mark† finally found it. They were delighted withtheir new home and with the service of their real

estate salesperson. A few weeks later, Anna and Mark learnedthat their new home had been highlighted in a largeadvertisement published in a popular national newspaper.The advertisement contained private information from theiragreement of purchase and sale including the selling price,terms, address and other particulars of their new property.

At no time before the publication had Anna and Markprovided their consent to share any information regardingthe purchase of their home with the public. Furthermore,during their search for a home, they had been assured on anumber of occasions of privacy laws that protected theirprivacy. Anna filed a complaint with RECO.

Upon learning about the complaint, the sales representativewho represented the seller contacted Anna to apologize andtook full blame for this mistake.

RECO conducted a thorough investigation. It was found thatthe seller’s real estate salesperson was in violation of severalareas of the Code of Ethics under REBBA 2002 including:

2. (1) A broker or salesperson shall not do or omit to doanything that causes the brokerage that employs thebroker or salesperson to contravene this Regulation.

4. A registrant shall promote and protect the best interestsof the registrant’s clients.

36. (8) A registrant shall not include anything in anadvertisement that could reasonably be used to identifyspecific real estate unless the owner of the real estate hasconsented in writing.

36. (9) A registrant shall not include anything in anadvertisement that could reasonably be used todetermine any of the contents of an agreement thatdeals with the conveyance of an interest in real estate,including any provision of the agreement relating to theprice, unless the parties to the agreement have consentedin writing.

The salesperson was ordered to pay a penalty of $8,000.

When advertising that a property is sold you may not includeanything in an advertisement that could reasonably be usedto:

• identify the people associated with the real estatetransaction unless they have consented in writing S.36.(7)

• identify the specific real estate unless the owner of thereal estate has consented in writing S.36.(8)

• identify any of the contents of an agreement in a realestate transaction including any provision that relates tothe price or terms unless the parties to the agreementhave consented in writing S.36.(9)

Determining whose consent to seek - the buyer or the seller- depends on:

1. when the advertisement is distributed2. who creates the advertisement (the brokerage

representing the buyer or the brokerage representing theseller). Remember, when needing to contact someonerepresented by another brokerage you must obtain thatregistrant’s written consent to do so. S.7. Code

continued... page 7

Advertising MattersWritten consent required for advertising sold properties

Fall 2010 Page 7

Whose consent do you need before advertising that a property is sold?

ScenarioSeller’s brokerage* wants to advertise that a property is sold when the transaction isn’t completed.

Seller’s brokerage wants to advertise that a property is sold when the transaction is completed.

Buyer’s brokerage wants to advertise that a property is sold when the transaction is not completed.

Buyer’s brokerage wants to advertise that a property is sold when the transaction is completed.

Seller’s written consent is required

Buyer’s written consent is required.

Both the buyer’s and seller’s writtenconsent are required

Buyer’s written consent is required

Whose consent do you need when advertising the picture, price or terms of an agreement?

* All real estate advertisements are brokerage advertisements.

†The information provided in this article is based on an actual discipline hearing that was dealt with by RECO. Anna and Markare fictitious names used to protect the identity of the complainants. You can review this and other RECO discipline decisionsby visiting the Complaints and Enforcement section of RECO’s website.

If you have any advertising-related questions that you’d like to see featured in Advertising Matters please e-mailcommunications@reco.on.ca.

ScenarioThe transaction isn’t completed. The buyer’s brokerage or seller’s brokerage wants to advertise thata property is sold and include the picture, price and/or terms of the agreement.

The transaction is completed. The buyer’s brokerage or seller’s brokerage wants to advertise that aproperty is sold and include the picture, price and/or terms of the agreement.

Both the buyer’s and seller’s writtenconsent are required

Buyer’s written consent is required

Fall 2010Page 8

In June of this year, an Ontario DivisionalCourt upheld a Proposal by the Registrarof the Real Estate Council of Ontario –

as well as a decision by the Licence AppealTribunal – refusing to renew theregistration of a former broker whoprofited from mortgage fraud.

Alan Chang, who accepted approximately$150,000 for his part in a Hamilton-basedmulti-million dollar mortgage fraudconspiracy, had argued the decision torefuse renewal of his registration wasexcessive in light of his co-operation in thesubsequent investigation. He was seekinga more lenient penalty.

On March 13, 2009, the Registrar issued aProposal to refuse to renew the brokerregistration of Mr. Chang. At the time, Mr.Chang was a 62-year-old real estatebroker and property appraiser with nearly26 years of real estate business experience.The Registrar issued the Proposal afterdetermining that from December 2003 toJuly 2006, Mr. Chang – acting as a realestate broker and property appraiser –made 21 false appraisals of properties inHamilton. Relying on the false appraisals,the Royal Bank of Canada lent mortgageswell in excess of the fair market value ofthe properties. For his efforts, Mr. Changpersonally profited approximately$150,000 as part of the conspiracyinvolving 33 properties in total.

After he was served with court papers bythe bank, Mr. Chang followed his lawyer’sadvice to co-operate with theinvestigation and prosecution of his co-conspirators. His co-operation assisted inthe resolution of civil litigation, theadvancement of criminal prosecution, and

included his payment of damages to thebank in excess of the profits he made fromhis participation in the scheme.

The Registrar’s Proposal was based onS.10(1)(a)(ii) of the Act, specifically that Mr.Chang’s past conduct establishedreasonable grounds to believe that hewould not carry on business in accordancewith law and with integrity and honesty.Mr. Chang appealed the Registrar’sProposal to the Licence Appeal Tribunal.The Tribunal held a hearing into hisappeal Nov. 23 and 24, 2009.

At the outset of the hearing, Mr. Chang –through his lawyer – admitted to all of theparticulars alleged in the Proposal. As aresult of his admissions, the Tribunal onlyheard evidence from Mr. Chang and oneof his lawyers.

The parties’ arguments were focused onthe determination of the appropriatepenalty in light of Mr. Chang’s admissionof wrongdoing. In an effort to avoid theloss of his registration, Mr. Chang relied onhis unblemished years of experience in thereal estate industry, emphasized that hehad co-operated with the bank’sinvestigators and asserted that althoughhe had been pulled into the conspiracy, herecognized the error of his conduct andshould not lose his ability to trade in realestate.

In support of the Proposal, RECO’s lawyeremphasized that the lengthy period offraudulent behaviour outweighed allother factors in the case and that refusalof registration was the only reasonable

response to the significance of Mr.Chang’s misconduct.

The Tribunal considered all the elementsof Mr. Chang’s argument for leniency andfocused their considerations on his effortsto unravel the scheme he wasfundamental in creating and his co-operation in the prosecution of hisco-conspirators.

The Tribunal concluded that Mr. Chang’sexercise in prudence in co-operating in theface of irrefutable evidence was notindicative of rehabilitation and afundamental acceptance of the wrongfulnature of his actions, but rather the resultof him having suffered the consequencesof his actions. The Tribunal stressed that inorder to once again place the public’s trustin Mr. Chang, he needs to demonstratesignificant rehabilitation to satisfy theTribunal that he was worthy of thepublic’s confidence that he would act inaccordance with the law and withintegrity and honesty. The Tribunal upheldthe Proposal and ordered the Registrar torefuse to renew Mr. Chang’s registrationas a real estate broker.

Mr. Chang appealed the decision of theTribunal to the Divisional Court of Ontarioasserting that the Tribunal erred in law infailing to explain why a lesser penaltythan refusal of registration was notappropriate and that the Tribunal erred inlaw by taking a negative inference fromthe fact that Mr. Chang exercised his rightto retain counsel and remain silent at theoutset of the bank’s investigation.

On May 4, 2010, the Divisional Court ofOntario heard Mr. Chang’s appeal of theTribunal’s decision. In extensive reasonsreleased on June 23, 2010, the courtdismissed his appeal and upheld theTribunal’s decision to refuse to renew hisregistration.

Fraudulent behaviour led to refusal of registrationDivisional court upholds tribunal decision

Fall 2010 Page 9

YEUN HUANG CHIUToronto, ONSept. 15, 2010

On Aug. 27, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Yeun Huang Chiu. Mr. Chiu did notappeal at the Licence Appeal Tribunal. His registration wasrevoked.

GOLDEN LAND REALTY INC.Toronto, ONSept. 15, 2010

On Aug. 27, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Golden Land Realty Inc. Golden LandRealty Inc. did not appeal at the Licence Appeal Tribunal. Itsregistration was revoked.

BRADLEY LOTZStratford, ONSept. 13, 2010

On Aug. 10, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Bradley Lotz. Mr. Lotz did not appealat the Licence Appeal Tribunal. His registration was revoked.

ARTURO PERALTALondon, ONAug. 25, 2010

On Nov. 23, 2009, the Registrar issued a Notice of Proposal torevoke the registration of Arturo Peralta. Mr. Peralta requesteda hearing in front of the Licence Appeal Tribunal. After ahearing, the Licence Appeal Tribunal ordered the Registrar torevoke the registration of Mr. Peralta.

ANTON JEEVA ARULAPPUMarkham, ONAug. 11, 2010

On Jan. 20, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Anton Jeeva Arulappu. Mr. Arulappurequested a hearing in front of the Licence Appeal Tribunal.After a hearing, the Licence Appeal Tribunal ordered theRegistrar to revoke the registration of Mr. Arulappu.

HOOKEUN JOLondon, ONJuly 28, 2010

On June 22, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Hookeun Jo. Mr. Jo did not request ahearing in front of the Licence Appeal Tribunal. His registrationwas revoked.

RAVINDER TULSIANIBrampton, ONJuly 26, 2010

On June 30, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Ravinder Tulsiani. Mr. Tulsiani did notrequest a hearing in front of the Licence Appeal Tribunal. Hisregistration was revoked.

CKUMAR (TIM) RAJKUMARToronto, ONMay 21, 2010

On Nov. 13, 2009, the Registrar issued a Notice of Proposal torevoke the registration of Ckumar (Tim) Rajkumar. Mr. Rajkumarrequested a hearing in front of the Licence Appeal Tribunal.After a hearing, the Licence Appeal Tribunal ordered theRegistrar to revoke the registration of Mr. Rajkumar. The LicenceAppeal Tribunal Order is under Appeal at the Divisional Court.

GURPAL SINGH BHALLAWoodbridge, ONMay 13, 2010

On April 7, 2010, the Registrar issued a Notice of Proposal torevoke the registration of Gurpal Singh Bhalla. Mr. Bhalla didnot request a hearing in front of the Licence Appeal Tribunal.His registration was revoked.

Under the Real Estate and Business Brokers Act, 2002 (REBBA 2002), the Registrar is required to make certain informationavailable to the public. The information required to be made publicly available includes Notices of Proposal, convictions,and charges. In addition, under REBBA 2002, the Discipline and Appeals Committees require that discipline and appeals

decisions be made publicly available. For detailed information about these matters, or to view RECO’s Public Notice Policy, pleasevisit the Complaints & Enforcement section of RECO’s website.

Registrar’s ProposalsThe Registrar has the authority to refuse, refuse to renew, revoke, suspend, or apply conditions to registration. In such situations,the Registrar prepares a Notice of Proposal and notifies the applicant or registrant of that Proposal together with reasons for theRegistrar taking such action. A registrant who has received a Notice of Proposal has 15 days from the date the Proposal is servedto file a notice of appeal to the Licence Appeal Tribunal (LAT). If no appeal is received by LAT, the Registrar may carry out the Noticeof Proposal.

Regulatory Activities

continued... page 10

Fall 2010Page 10

Convictions

The Ontario Provincial Offences Act (POA) governs how charges are processed and prosecuted in Ontario courts. The POA appliesto all Ontario statutes and regulations, including REBBA 2002. Individuals found guilty of offences under REBBA 2002 aresubject to fines up to $50,000 and a potential prison term of two years. Corporations found guilty of offences are subject to

fines up to $250,000. Courts have the power to order convicted persons to pay compensation and make restitution.

Individuals may also be subject to a victim fine surcharge, in addition to the specified fine, pursuant to section 60.1 of the POA. Thesurcharge is collected by the court and goes in to the province’s Victim Justice Fund account. For more information, please visitwww.ontariocourts.on.ca.

DAVID SETOToronto, ON

On Nov. 9, 2009, David Seto pleaded guilty to eight counts offailing to ensure that his brokerage, RE/MAX Executive RealtyInc. (1996), properly deposited trust money into its trust account.On Feb. 22, 2010, Mr. Seto was sentenced to one yearincarceration on those eight counts. This sentence was upheld bythe Appeal Court on Sept. 15, 2010.

RE/MAX EXECUTIVE REALTY INC. (1996)Toronto, ON

On Nov. 9, 2009, David Seto on behalf of RE/MAX ExecutiveRealty Inc. (1996) pleaded guilty to eight counts of failing todeposit trust funds into a trust account. On Feb. 22, 2010,RE/MAX Executive Realty Inc. (1996) was sentenced to a fine of$20,000 per count, for a total fine of $200,000, inclusive of a$40,000 victim fine surcharge.

HARVEY GOLDMINTZCollingwood, ONOn Sept. 14, 2010, the acquittal of Harvey Goldmintz wasoverturned, and he was found guilty of two counts of tradingin real estate without being registered as a broker.

1560719 ONTARIO CORPORATION OPERATING AS BLUEMOUNTAIN CHALETSCollingwood, ON

On Sept. 14, 2010, the acquittal of 1560719 Ontario Corporationoperating as Blue Mountain Chalets was overturned, and it wasfound guilty of two counts of trading in real estate withoutbeing registered as a broker.

TERRY D. GRAHAMAlliston, ON

On April 28, 2010, Terry D. Graham pleaded guilty to eightcounts of trading in real estate while unregistered and eightcounts of failing to deposit trust funds in a trust account. OnAug. 24, 2010 Mr. Graham was sentenced in respect of theseconvictions. He was sentenced to 15 months in jail. He wasordered to pay restitution in response to the prosecution’ssubmission of $89, 999.66 in consumer loss. He was also placedon probation for two years.

RAMANAN ANANDAPPAStouffville, ON

On Aug. 9, 2010, Ramanan Anandappa pleaded guilty to onecount of furnishing false information on an application. He wasfined a total of $4,500.

RAVINDER TULSIANIBrampton, ON

On Aug. 10, 2010, Ravinder Tulsiani pleaded guilty to one countof furnishing false information on an application. Mr. Tulsianiwas fined $3,000.

CHRISTIAN FORAGEMississauga, ON

On Aug. 10, 2010, Christian Forage, in the capacity of broker ofrecord of Binswanger, Forage Real Estate Services Inc., pleadedguilty to one count of failing to ensure the brokerage compliedwith the Act. Mr. Forage was ordered to pay restitution of$10,000, was fined $2,500 and placed on 12 months probation.

BINSWANGER, FORAGE REAL ESTATE SERVICES INC.Mississauga, ON

On Aug. 10, 2010, Christian Forage, in the capacity ofBinswanger, Forage Real Estate Services Inc., pleaded guilty toone count of failing to ensure the brokerage complied with theAct. The said brokerage was fined $2,500.

GORDON SIMPSONBrampton, ON

On Aug. 4, 2010, Mr. Gordon Simpson pleaded guilty to twocounts for failing to deliver a copy of the agreement. He wasfined $3,000 per count for a total of $6,000.

SHAN (JEFF) XUOttawa, ON

On July 9, 2010 Shan (Jeff) Xu was found guilty of one count offurnishing false information in an application for registrationand two counts of failing to disclose convictions to brokeragesthat were his prospective employer. Mr. Xu was fined $25,000per count, for a total of $75,000.

JENNIFER D’ANDRADEToronto, ON

On June 14, 2010, Jennifer D’Andrade pleaded guilty to onecount for furnishing false information in an application forrenewal. She was fined $1,500, plus a victim fine surcharge.

continued... page 11

Regulatory Activities continued from... page 9

Fall 2010 Page 11

ConvictionsRegulatory Activities

continued from... page 10

VALERIA DAVIESMarmora, ON

On May 18, 2010 Valeria Davies, as broker of record, pleadedguilty to three counts for failing to ensure that the brokeragecomplied with the Act. Ms. Davies was fined $175 for eachcount, for a total of $525.

RE/MAX HARMONY REALTY LTD.Marmora, ON

On May 18, 2010 Valeria Davies, as broker of record of RE/MAXHarmony Realty Ltd. pleaded guilty to one count for breach ofreal estate trust account, one count for failing to prepare a realestate trust account reconciliation statement, and one count offailing to record disbursement particulars on a Trade Recordsheet. The said brokerage was fined $175 for each count, for atotal of $525.

AMY CREIGHTONCarleton Place, ON

On April 16, 2010, Amy Creighton pleaded guilty to three countsfor failing to ensure that the brokerage complied with the Act.She was fined $2,500 per count for a total of $7,500 plus a victimfine surcharge.

CENTURY 21 CARLETON REALTY INC.Carleton Place, ON

On April 16, 2010, Amy Creighton, on behalf of Century 21Carleton Realty Inc., pleaded guilty to failing to prepare a trustaccount reconciliation, failing to maintain a trust ledger andmaking an unauthorized disbursement from the trust account.The said brokerage received a suspended sentence.

VINCENT FORMOSIHamilton, ON

On April 13, 2010, Vincent Formosi was found guilty of acceptingremuneration for trading in real estate from a person other thanthe brokerage that employed him. He was fined $5,000. Hewas also ordered to pay restitution of $10,000.

BENNY ROMANOToronto, ON

On April 6, 2010, Benny Romano pleaded guilty to three countsof failing to ensure that his brokerage complied with the Actand one count of failure to review, sign and date a trust accountreconciliation statement. He was fined $4,000 per count for atotal of $16,000 plus a $4,000 victim fine surcharge.

ROYAL VIEW ROMANO REAL ESTATE SERVICES LTD.Woodbridge, ON

On April 6, 2010, Benny Romano, on behalf of Royal ViewRomano Real Estate Services Ltd., pleaded guilty to one count offailing to immediately deposit funds into the trust account toeliminate a shortfall, one count for failing to prepare a monthlytrust account reconciliation and one count of employing anunregistered person to trade in real estate. The brokerage wasfined a total of $13,000 plus a $3,250 victim fine surcharge.

RECO welcomes newDeputy Registrar

Bruce Matthews, formerDeputy Registrar forProfessional Engineers

Ontario (PEO), has joined theReal Estate Council ofOntario as its newest DeputyRegistrar.

Mr. Matthews, who has beenworking at RECO since earlySeptember, says he’simpressed with RECO’s recordwhen it comes to regulatorycompliance and looksforward to the challengesahead of him in this position.

As RECO’s Deputy Registrar,Regulatory Compliance, he

oversees the Complaints, Compliance and Disciplineand the Inspections and Investigations departmentswhile ensuring that the requirements of the Real Estateand Business Brokers Act, 2002 and RECO’s policies areinterpreted and applied in a consistent fashion.

Mr. Matthews holds a Bachelor of Applied Sciencedegree in Systems Design Engineering from theUniversity of Waterloo and a Building ScienceCertificate from the University of Toronto. Since 2000,he had been employed by PEO, the regulatory body forthe engineering profession operating under theProfessional Engineers Act. Starting as an investigator,he became Manager of Complaints & Discipline in 2003,and since June 2008 was Deputy Registrar, RegulatoryCompliance.

In that capacity, he oversaw the investigation andprosecution of complaints against professionalengineers, and directed the prosecution of individualsengaged in unlicensed engineering practice. He wasresponsible for PEO’s Alternative Dispute Resolutionand Fees Mediation processes, and served as staffliaison to the Complaints and EnforcementCommittees.

Since 2007, Mr. Matthews has been on the Board ofDirectors of CLEAR (the Council on Licensure,Enforcement and Regulation), currently in the positionof President-Elect. He has been active in CLEAR’sProfessional Discipline and Board Member Trainingcommittees and has made several presentations atCLEAR conferences.

Fall 2010Page 12

Do you have any comments or inquiries about For the RECOrdnewsletter? Please send them to: communications@reco.on.ca.

Real Estate Council Of Ontario 3250 Bloor Street West, Suite 600, East Tower,Toronto, Ontario M8X 2X9 Tel: 416-207-4800 Toll-Free: 1-800-245-6910 Fax: 416-207-4820

Disclaimer: While RECO makes every effort to ensure that theinformation in this publication is current and accurate, RECO does notwarrant or guarantee that it will be free of errors. The informationcontained in this publication is not intended to cover all situations. It isgeneral information only and users/readers are encouraged to seek theirown independent advice for particular fact situations.

Return undeliverable Canadian addresses to: Real Estate Council Of Ontario 3250 Bloor Street West, Suite 600, East Tower, Toronto, Ontario, Canada M8X 2X9PM #40041338

RECO’s board of directors and staff aremourning the loss of well-known andrespected Toronto real estate broker

David Rossi who died Sept. 17 after a battlewith leukemia.

Mr. Rossi was an industry leader andvisionary who played a key role in theestablishment of the Real Estate Council of

Ontario (RECO). Not only was he a founding director of RECO buthe was also the driving force behind the creation of RECO’s Codeof Ethics.

Mr. Rossi was elected to the Board for three terms and served asVice Chair from 2001 – 2002 and Board Chair from 2002 – 2003.

He led numerous RECO Committees and Working Groups andleaves a legacy of RECO firsts.

He told a magazine writer several years ago that chairing RECO’sethics committee was “one of my most cherished roles, to actuallydevelop with a group of very knowledgeable people, a Code ofEthics that lives on.”

Mr. Rossi’s spirit, passion for life and great integrity will alsocontinue to live on among all who had the privilege of knowingand working with him.

Dave Rossi is survived by his wife, Aleksandra, and childrenMichael, Mathew and Joseph, and grandchildren Nicholas andAva. He is also survived by his brother Anthony and many niecesand nephews.

In Memoriam - David Joseph Rossi

Ask the Registrar

You’ve checked your records and you find there is trustmoney in your brokerage’s real estate trust account that’sbeen “unclaimed” for two years. What do you do?

The Real Estate Business Brokers Act, 2002 (REBBA 2002) requiresyou to turn it over to RECO. Deposits can be combined on onecheque payable to RECO. The funds are held by RECO for amaximum of five years if not claimed. RECO must pay the fundsto the provincial Finance Ministry within one year after it hasbeen held for the five-year period, as per S.27 (11) of REBBA2002.

For clarification, refer to the Registrar’s Bulletin on RECO’swebsite. It can be found under the Publications and Resourcestab. You may also want to review S.27 (4) and 27 (5) of the Act formore detailed instructions.

If the trust money in question was held in an interest bearingaccount, the unclaimed money paid to RECO will include boththe original trust deposit and any interest accrued to the originaltrust monies up until the time those monies are paid out to RECO.

For trust money in excess of $500, you must provide RECO withproof of notice in a local newspaper on one occasion in the areain which the person entitled to payment of the trust monies waslast known to have resided or carried on business. The noticemust have gone unanswered for at least six months. A singleinsertion is sufficient and a copy of the notice must be provided.Brokerages should place the advertisement as soon as otherattempts to locate the person have been unsuccessful.

Trust money is defined as “unclaimed” if:

• a brokerage has held it in trust for two years and has not been able to determine who is entitled to the money.

• a brokerage has held the money in trust for one year after the entitled person was first determined and the personcannot be located.

Dealing with unclaimed money in a real estate trust account