Ethics Corner: Are your open house and directional signs legal?

Signs

Did you know that your signs must comply with all municipal sign bylaws?

MLS® Rules & Regulations, MLS® Rules & Regulations, Section 10 – Advertising 10.03 Signs giving notice of sale, rent, lease, development, exchange or open house… may only be erected on locations that  conform with Municipal and Provincial  sign legislation, all applicable laws,  regulations, codes and bylaws.…

You must abide by the sign bylaws of the municipality/region in which your listed property is located:You must abide by the sign bylaws of the municipality/region in which your listed property is located:

Burlington – By-law No. 034-2007 http://bit.ly/29LT5Ik  (Click on “Download Original  By-law” – see especially page 19)

Grimsby – By-law No. 97-45 http://bit.ly/2a8QpnJ

Haldimand – By-law No. 1064/10 http://bit.ly/29TBZWw (references throughout  the document)

Hamilton – By-Law No. 10-197 http://bit.ly/29LLSIg  (see especially page 27)

Why is it important?

Open house/directional sign bylaws exist to ensure that sight lines for drivers and pedestrians are unobstructed and, in some cases, so that signs are not left to clutter boulevards, medians, etc.

If your signs do not comply with municipal sign bylaws, they may be seen as causing a visual distraction, adding to what may be perceived as unsightly clutter, and as lacking professionalism.

Consequences

  1. Municipalities have fines for removing and storing signs that don’t comply with their bylaws.
  2. A complaint may be filed with RAHB’s Professional Standards Committee.

If you see a sign that doesn’t comply with municipal bylaws, you can:

  • Contact the owner of the sign and remind him or her of the sign bylaw for that municipality
  • Contact the municipality in which the sign is  located and let them deal with it as a non- compliant sign
  • Take a time- and date-stamped photo clearly showing the location of the sign and forward it  to the RAHB Professional Standards Committee (c/o Angela at the RAHB office – angelam@rahb.ca)  along with a letter of complaint that cites the bylaw that is being breached.

Note: RAHB cannot enforce the municipality’s sign bylaw; it can only enforce its rule requiring compliance with the bylaw. 

Be aware that bylaws differ from municipality to municipality, so what is non-compliant in Burlington, for example, may be compliant in Grimsby or Hamilton or Haldimand. If you see a sign that doesn’t comply with municipal bylaws, you should NEVER remove the sign – members may never interfere with another member’s sign.

Ethics Corner – Are you guaranteeing a sale?  Be careful how you advertise!

This article has been reproduced with permission from the Ontario Real Estate Association. The full decision can be viewed on the website of the Real Estate Council of Ontario (RECO) at www.reco.on.ca.

The following decision from RECO Discipline and Appeal Hearings has been condensed. All individual and corporate names have been changed.

 

THE FACTS

Chris and Pat wanted to sell their property. They were working with Sam, a real estate salesperson with Green Grass Realty, who listed their property for sale at a list price of $409,980. The listing agreement featured two handwritten notations.

The first notation stated that if Green Grass Realty purchases the property, the deposit will be a certified cheque of $20,000. As well, it stated that if Green Grass purchases the property or if Sam finds a buyer, the total commission will be two per cent. The other handwritten note indicated that if the property is not sold in 30 days, Green Grass Realty would buy the property at the highest price offered by the market.

Each of these notes was initialed by Sam and the sellers. No other terms or conditions regarding the promise to buy the property were documented in the listing agreement, which was for a period of three months.

Just over a month later, Chris and Pat complained to RECO. They alleged that they listed with Sam because of the promise that if their house did not sell in 30 days, Sam or Green Grass Realty would purchase it. The sellers said that after the 30 days had passed, they asked Sam when they’d receive a deposit from him. After several inquiries, Sam offered to purchase the house for $350,000. Chris and Pat did not think this was a fair price, believing the market price to be between $405,000 and $429,000.

Chris and Pat provided RECO with copies of Sam’s printed ads, which stated, “if your property is not sold in 30 days, we will buy it!” This text was accompanied by an asterisk which indicated that certain conditions may apply, but no conditions were listed.

In Sam’s response to RECO, he said that he had explained to Chris and Pat that the market price would be agreed upon between himself and the sellers and set by offers received within the first 30 days of listing the property. Sam said that the house would continue to be listed on MLS® until the closing date, which was a total of three months. Sam said that if a more attractive offer came along, Chris and Pat would have the option of accepting it. In the event that a lower offer was accepted, Sam would compensate the difference between that offer and the amount he guaranteed, ensuring no loss for the sellers.

Sam said two offers were received on the house. Just over a month-and-a-half after listing the house, the first offer was signed back but rejected by the buyers. About a week later a second offer was received and was also signed back. However, before the second offer was finalized, the first buyers returned with a new offer of $409,000 which was accepted by Chris and Pat.

Sam acknowledged that he had failed to document the details of the guarantee in writing and failed to get Chris and Pat’s acknowledgement. Green Grass Realty adjusted its portion on the commission to a $1,000 flat fee.

 

THE FINDINGS

The RECO panel determined that Sam acted unprofessionally by failing to offer to purchase Chris and Pat’s house as indicated on the listing agreement and in Sam’s advertising. Sam also failed to put in writing, the terms, conditions and limitations of the guaranteed sale arrangements and failed to get the sellers’ acknowledgement in writing.

The panel ruled that Sam breached the following sections of the REBBA 2002 Code of Ethics: (3) Fairness, honesty, etc.; (4) Best interests; (5) Conscientious and competent service, etc.; (27 (1) (b) Written and legible agreements; (38) Error, misrepresentation, fraud etc.; and (39) Unprofessional conduct, etc.

 

THE PENALTY

Sam was fined $10,000 payable to RECO. The full decision can be viewed on the RECO web site at www.reco.on.ca   Look under “Complaints and Enforcement” and then under “Regulatory activities and decisions” and scroll down to “Discipline and appeals decisions.” Scroll down and click on “Search by year.” Select 2014 then “Search.” The case is dated 2014/11/27.

Ethics corner – financing conditions

The following article was written and published by Mark Weisleder, in his newsletter dated October 29, 2016.  Reprinted with permission.

Now that we have all the new mortgage rules, it is more important than ever before to include the financing condition in any offer or be otherwise prepared for the consequences.

1. Pre-approvals are no guarantee you will obtain your financing
Too many buyers are cavalier about submitting offers without a financing condition, especially during the pressure of a bidding war. You must understand that even with a pre-approval, the lender must be satisfied with its own appraisal. The foundation for most appraisals is what would a willing buyer pay a willing seller, WITHOUT pressure? In a bidding war, there is almost always pressure on the buyer. This is why the appraisal will likely be lower than what the buyer offered and the lender will offer you less money than you hoped for. The answer is always to have an extra 5-10% of the down payment in reserve to protect you. In a condominium purchase, if it is conditional upon review of a status certificate, use that time to also make sure your financing is in order.

2. Lenders can change their mind right up until the day of closing
Even if you are approved after you sign your agreement, the lender can still change their minds based on anything which they may learn before they advance funds. There are usually many conditions attached to any loan approval, such as verification of income, down payment, employment. Make sure you work with your mortgage broker to satisfy all of these conditions and requirements as soon as possible in the process. The worst words a lawyer can hear from a lender on the day of closing is “The file is in underwriting”. This typically means that someone else is reviewing the entire file because issues have arisen. In some cases this can result in the entire loan being cancelled, right on the day of closing. In our firm, since we receive and send funds via wire transfer, we are fortunately able to complete deals even when lenders are late transferring funds to our trust account.

3. Always know the net amount you will receive from your lender
Every mortgage commitment is different. Some may contain up-front fees for arranging the loan, appraisals, CMHC fees and PST, interest to the interest adjustment date. All of these fees are deducted right off the top, before the balance is sent to your lawyer on the day of closing. The bottom line is you must know the exact amount that will be sent to your lawyer on closing, to make sure you have enough to make up the rest of the down payment, land transfer tax and legal fees. At our firm we remind clients to send us their mortgage instructions early in the process so that we can get them the net amount they will need to complete the transaction in a timely manner.

4. Get it in writing if buyer wants no finance condition in the Agreement
If the buyer does go ahead and tell you to put the offer in without a finance condition, get these instructions in writing. It is not enough to write the finance condition in the offer and then have the buyer strike it out and initial it. It is better to use a separate form. OREA has form 127 which makes it clear that the buyer is confirming to the buyer brokerage that they understand the risks in making an offer without conditions.

________________________________________________________
Mark Weisleder
Email: mark@realestatelawyers.ca
Website: www.RealEstateLawyers.ca
Direct Line:416.702.2499
Toll Free Tel:1.855.466.3801

Professional Standards – Golden Rule

The busy spring market is upon us and it’s time for a reminder about how important it is to treat clients, customers and fellow REALTORS® with respect.  This article is reprinted from the November, 2014 issue of REALINFO … it’s as timely now as it was then.

The Golden Rule is getting tarnished

Almost everyone has heard of the Golden Rule:    Do unto others as you would have them do unto you.  Treat others as you would like to be treated.

The Golden rule is a philosophical, sociological and religious maxim.  It is also the basis for CREA’s and RECO’s Code of Ethics and the basis for what we refer to as “common courtesy”.

RAHB has been receiving complaints for the last few months about how uncommon courtesy has become among members.  Do any of these situations sound familiar?

  • You call to book an appointment to show a property only to be told the seller requires “24 hours notice”, although it wasn’t indicated on the listing?
  • Someone scheduled a showing of your listing but didn’t leave a business card to let the seller know they were there?  Or worse, they didn’t show up at all?
  • Getting feedback from a salesperson after he or she showed your listed property is impossible?

Apparently the Golden Rule is getting a little tarnished in many places.  The National Association of REALTORS® (NAR) provided the following guidelines for its members in the US to remind them of the importance of common courtesy – or, as they’ve termed it, showing respect – for the public, for property and for other REALTORS®.

This list is not exhaustive, but it’s a good start for making courtesy a little more common again.

Respect for the Public

  1. Follow the “Golden Rule” – Do unto others as you would have them do unto you.
  2. Respond promptly to inquiries and requests for information.
  3. Schedule appointments and showings as far in advance as possible.
  4. Call if you are delayed or must cancel an appointment or showing.
  5. If a prospective buyer decides not to view an occupied home, promptly explain the situation to the listing broker or the occupant.
  6. Communicate with all parties in a timely fashion.
  7. When entering a property, ensure that unexpected situations, such as pets, are handled appropriately.
  8. Leave your business card if not prohibited by local rules.
  9. Never criticize property in the presence of the occupant.
  10. Inform occupants that you are leaving after showings.
  11. When showing an occupied home, always ring the doorbell or knock – and announce yourself loudly – before entering.  Knock and announce yourself loudly before entering any closed room.
  12. Present a professional appearance at all times; dress appropriately and drive a clean car.
  13. If occupants are home during showings, ask their permission before using the telephone or bathroom.
  14. Encourage the clients of other brokers to direct questions to their agent or representative.
  15. Communicate clearly; don’t use jargon or slang that may not be readily understood.
  16. Be aware of and respect cultural differences.
  17. Show courtesy and respect to everyone.
  18. Be aware of – and meet – all deadlines.
  19. Promise only what you can deliver – and keep your promises.
  20. Identify your REALTOR®and your professional status in contacts with the public.
  21. Do not tell people what you think – tell them what you know.

Respect for Property

  1. Be responsible for everyone you allow to enter a listed property.
  2. Never allow buyers to enter listed property unaccompanied.
  3. When showing property, keep all members of the group together.
  4. Never allow unaccompanied access to property without permission.
  5. Enter property only with permission even if you have a lockbox key or combination.
  6. When the occupant is absent, leave the property as you found it (lights, heating, cooling, drapes, etc).  If you think something is amiss (e.g. vandalism) contact the listing broker immediately.
  7. Be considerate of the seller’s property.  Do not allow anyone to eat, drink, smoke, dispose of trash, use bathing or sleeping facilities, or bring pets.  Leave the house as you found it unless instructed otherwise.
  8. Use sidewalks; if weather is bad, take off shoes and boots inside property.

Respect for Peers

  1. Identify your REALTOR® and professional status in all contacts with other REALTORS®.
  2. Respond to other agents’ calls, faxes, and e-mails promptly and courteously.
  3. Be aware that large electronic files with attachments or lengthy faxes may be a burden on recipients.
  4. Notify the listing broker if there appears to be inaccurate information on the listing.
  5. Share important information about a property, including the presence of pets; security systems; and whether sellers will be present during the showing.
  6. Show courtesy, trust and respect to other real estate professionals.
  7. Avoid the inappropriate use of endearments or other denigrating language.
  8. Do not prospect at other REALTORS® open houses or similar events.
  9. Return keys promptly.
  10. Carefully replace keys in the lockbox after showings.
  11. To be successful in the business, mutual respect is essential.
  12. Real estate is a reputation business.  What you do today may affect your reputation – and business – for years to come.

Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission

 

Ethics Corner

This article appeared in RECO’s ‘For the RECOrd’, April 24, 2015, and is reprinted with permission.

Clear communication leads to success

Communicating frequently. Providing sound, accurate advice. Making commitments and keeping them. These are the hallmarks of professionalism and key to your success as a real estate professional. As one registrant recently learned, even a typo can have big consequences.

Keeping your clients in the loop is not just a courtesy, it will tell them that you are on top of things and provide them with confidence that the transaction is unfolding as it should.

Even if the news isn’t great – like a showing that has been cancelled – it is best to keep the lines of communication open to show that you are following through on your professional commitments and doing your best to sell the home.

Failing to communicate properly with your client can have undesirable consequences and can certainly undermine your reputation as a professional.

A good example of a breakdown in communication between salesperson and a seller happened last year and required mediation to resolve the seller’s complaint to RECO.

In this case, the salesperson did not obtain any offers on the property after numerous showings. The salesperson, in an email to the seller, suggested reducing the asking price by $114,000. The seller couldn’t afford that reduction and asked the salesperson to cancel the listing agreement, but the Broker of Record refused to do so.

The seller complained to RECO, and the dispute went to mediation. During that process, the salesperson realized she had made a typo in the email to the seller – the reduction should have been $14,000 rather than $114,000. After the error was discovered, both parties agreed to a listing agreement for a $14,000 reduction in the sales price.

In this case, the misunderstanding was completely preventable. Had the salesperson met or spoken with the seller directly, chances are the mistake would not have been made. And, if a meeting or phone call wasn’t an option, a more careful reading of the email before it was sent off to the seller may have avoided the mistake. Even if the typo slipped through, when the seller asked to cancel the listing agreement, the Broker of Record could have taken a closer look at the situation and spotted the error.

To learn more, check out a new video (https://www.youtube.com/watch?v=-sNt0sZiv_A) that talks about the importance of open and honest.

Ethics Corner

When is permission to advertise not permission to advertise?

The following decision from RECO Discipline and Appeals Hearings was recently published in the OREA “Edge”.  The full case has been condensed and all names have been changed. (more…)

Ethics Corner – The Golden Rule is getting tarnished

Almost everyone has heard of the Golden Rule:    Do unto others as you would have them do unto you.  Treat others as you would like to be treated.

The Golden rule is a philosophical, sociological and religious maxim.  It is also the basis for CREA’s and RECO’s Code of Ethics and the basis for what we refer to as “common courtesy”. (more…)

Ethics Corner

How do you know what RECO Code of Ethics really means?  Here are two scenarios of how the directive for fairness and honesty can play out in a REALTORS® dealings with the public.
(more…)

Ethics Corner – Answer

The situation from last month :

Sophie Salesperson was the target of verbal abuse and disparaging comments at her public open house.  The abuser was Mary, a new salesperson from another Brokerage.  Was there anything Sophie could do about Mary? (more…)

Ethics Corner – What would you do?

Sophie Salesperson got off the phone after a heated conversation with Mary, who was new to the real estate business and worked for a different Brokerage.  Sophie had been dealing with Mary over the last several weeks and they just did not see eye to eye.  Mary had proven to be very aggressive when things did not go her way, and seemed determined that Sophie was now her enemy. (more…)

Ethics Corner – A story for a busy market

Sarah Salesperson had buyers with whom she’d been working for months.  They were all getting a little desperate – the buyers because they were buying their first home and nothing they saw in their price range appealed to them, and Sarah because she’d shown them every house in their price range and they were just too picky. Still, she liked them and tried very hard to find their first home.  She remembered what it was like when she was buying her first home and how hard it was to let go of some of the dreams. (more…)