Broker's Playbook - Good For Real Estate



Real estate agent slapped with fines, suspension for fraudulent acts

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A real estate agent was recently fined and given a one-year suspension by the Manitoba Securities Commission (MSC) after committing several fraudulent acts under the Real Estate Brokers Act (REBA).

An investigation by the MSC found that Daryl Newis, the agent involved, failed to disclose his interest in the three properties he sold in 2016 and 2017. The three properties, located at Home Street, Simcoe Street, and McDermot Avenue, were found to be owned by his wife.

Under section 19 (9) of the REBA, no broker "shall show to a prospective purchaser or otherwise solicit an offer to purchase any real estate owned by him or by his associate without disclosing that it is so owned."

"In failing to disclose this fact, he deprived the purchaser of the opportunity to obtain her own agent who would act in her best interests," the MSC decision said.

Furthermore, Newis failed to prepare listing agreements for each of the three properties, which is supposedly a standard practice in the industry.

MSC also found that the agent made inaccurate statements about one of the properties.

When listing the Home Street property, Newis said it had "two newer furnaces, two newer hot water tanks, and a newer roof". However, the buyer, who used it as a rental property, received complaints from the tenant about the roof and the furnaces.

After the inspection ordered by the buyer, it was found that the furnaces and the hot water tank were at least 20 years old.

"He represented that the roof, the hot water tanks and the furnaces in the Home Street property were 'newer'. This was clearly wrong and resulted in additional costs to the purchaser totalling approximately 10% of the purchase price," the decision said.

Further investigation by the MSC also discovered forged documents relating to the three properties. As it turned out, Newis forged his wife's signature in the offers-to-purchase document issued by the buyers.

"Forging documents is a very serious transgression. The industry cannot function if registrants are not honest and forthright in their dealings. We are very concerned that this respondent forged several documents relating to this matter," MSC said.

The commission suspended Newis' salesperson registration for a year and ordered him to pay fines of around $14,500. The commission also ordered Newis to undergo and pass all modules of the Manitoba Real Estate Salespersons course. Newis will also serve six months of strict supervision after his suspension.