| Section | Duty in plain words | Cited for |
|---|---|---|
| 4 Best interests | Put the client’s interests first, always. | A, B, C |
| 5 Competent service | Be conscientious; show reasonable knowledge, skill and judgment. | A |
| 16 via 2(1) | The brokerage must disclose, at the earliest chance, that it wants to act for more than one party, and what that changes. A salesperson must not cause the brokerage to break that rule. | C |
| 17 Nature of relationships | Tell everyone, in writing, before any offer, how you relate to each side. | C |
| 38 Error, misrepresentation, fraud | Use best efforts to prevent error, misrepresentation, fraud or unethical practice. | A, B, C |
| 39 Unprofessional conduct | Do nothing that would reasonably be seen as disgraceful, dishonourable, unprofessional or unbecoming. | B |
Agreement A: the exclusive listing
Sections 4, 5 and 38. The sellers signed a five-month exclusive listing the same evening they first met him, at a price he set. An exclusive listing binds the seller to one brokerage and normally means commission is owed even if the seller finds a buyer alone. RECO’s finding is not that exclusives are wrong, they are common, but that recommending one without adequately explaining its “meaning and impact” fails the duty of competent service and the duty to put the client first. Our guide to exclusive listing agreements covers what should have been explained.
Agreement B: the undisclosed interest in the buyer
Sections 4, 38 and 39. This is the core of the case. The buyer was a corporation; he was its sole director and officer and a shareholder. He presented its offers twice and encouraged acceptance without clearly saying so. A registrant who stands to profit from the purchase cannot promote the seller’s best interests in negotiating the price, which is why the Code treats this as both a best-interests failure and, under section 39, conduct a reasonable person would regard as unprofessional. The disclosure form signed at acceptance, with its “RREA is the director” line, was found not to be clear disclosure. See when your agent is the buyer.
Agreement C: no consent to multiple representation
Sections 4, 17, 38 and 2(1) in respect of 16. The buyer’s representative worked at the same brokerage as Zia. Under REBBA 2002 the brokerage could act for both sides only after disclosing that fact and its consequences at the earliest practicable opportunity, and section 17 required written notice of the relationships before any offer. Neither happened before the 17 March offer. Section 2(1) is the mechanism that makes a salesperson answerable when his conduct causes the brokerage to breach section 16. See multiple representation in Ontario.
On the word “fraud”
Section 38 carries the heading “Error, misrepresentation, fraud, etc.” Because that heading appears in the decision, this case is sometimes summarised online as a fraud finding. It is not. The section imposes a duty to use best efforts to prevent those things; the agreed breach is a failure of that duty. RECO made no finding that Mr. Zia committed fraud, and neither do we.
Why $20,000?
The penalty was jointly proposed by RECO and Mr. Zia and accepted by the Chair. Discipline fines under REBBA 2002 were capped at $25,000 per proceeding for individuals, so $20,000 sits near the top of the range. The mandatory ethics course is a routine addition in RECO decisions of this kind.