Recent Disciplinary Action Taken by the Real Estate Board in relation to various violations by practitioners, under the Real Estate Dealers and Developers Act, 1988.
The Real Estate Board recently ruled in three separate cases involving disciplinary action against real estate professionals, to cancel the dealer’s licence of one real estate company and its qualifying director, while the licence of another company and its qualifying director was suspended as well as that of one salesman. The details are as follows
Declan Real Estate Company Limited with Qualifying Director, Cleveland Cato
A disciplinary hearing was held at the Real Estate Board on November 14, 2019, where the Board found real estate dealer, Declan Real Estate Company Limited, with Qualifying Director Mr Cleveland Cato, guilty of various offences under the Real Estate Dealers and Developers Act. These include: breaches of Section 44 (1) (c) and 38 – dealing with the failure to produce records requested by the Board and the right of the Board to request documents, respectively.
Even more egregious was the finding of violations of Sections 24 and 25, which require clients’ money to be held in trust, and not used or any other purpose than that directed by the client (S. 24) and a general requirement to operate such an account (S.25). Related to the violation of the previous two sections, were violations of sections 15 and 16 of the Regulations which requires real estate dealers to keep proper accounting records of clients’ monies. Section 7 (1) of the Code of Ethics (Regulations), for which he was found in breach, further required the company/Qualifying Director to “account to his client for all monies in hand…whenever reasonably required to do so.”
Finally, a breach was upheld in relation to the Code of Ethics (Regulations) Section 6 (1) where the company/individual failed to undertake duties and responsibilities as are within his competence and for which he is properly registered or licensed under the Act.” These led to the immediate cancellation of the licence of Declan Real Estate Company Limited.
Three separate complaints were received against Declan Real Estate Company Limited, between May 2019 and August 2019. In one complaint, Declan entered into an agreement to collect rent and lodge same to the account of the owner who was overseas. The Board did not receive proof that was done, and the complainant advised that several dishonoured cheques were presented to her and/or her representative, after several unsuccessful attempts the recover the sums owed.
In another complaint, a purchaser alleged that $1,500,000 was paid over to Declan as down payment on the purchase of a property, with the understanding that it would be paid over to the vendor’s Attorney. She advised that when the company eventually presented a cheque for the amount to the Attorney, it was dishonoured. Due to the client’s frustration with the inability to recover the monies on time, the purchaser asked that the transaction be cancelled.
In the third case, Declan was contracted to sell a property, and received a deposit of $421,500 toward the sale, again to be paid over to the vendor’s attorney. Again, it was alleged that the company presented dishonoured cheques to the vendor’s Attorney, leading the prospective purchaser, in frustration, to ask that the transaction be cancelled and the money returned.
Real Estate Salesman, Una May Powell
Another disciplinary hearing was held on November 14, 2019; this time involving real estate salesman, Una May Powell. Ms. Powell was held to breach of Sections 24 and 25, which require clients’ money to be held in trust, and further prohibits the use of the funds for any other purpose than that directed by the client (S. 24) and a general requirement to operate such an account (S.25). Additionally Ms. Powell was also found guilty of violations under section 10, which permits salesmen from operating “in the capacity of a real estate dealer unless he is the holder of a valid licence…authorizing him so to do.”
The Board thereby suspended Ms. Powell’s license for six (6) months with an order that during this period a course in ethics be undertaken. She was ordered to cease practicing as at the date of the hearing.
Details of the complaint are that Ms. Powell entered into an agreement in June 2018, outside of the knowledge of her dealer, to manage, supervise and collect rent for an apartment complex; actions outside the ambit of her licence. As a result, she collected monies (rent) from the tenants on five occasions but failed to put the money into a client’s account, as is required under the Act, and to properly account for the sums collected.
The complainant further alleges that Ms. Powell further collected $US3000 from her, with a promise to assist in settling an outstanding debt and initiate reconnection by the NWC. Ms Powell was charged by the Counter Terrorism and Organised Crime Investigation with Fraudulent Conversion under the Larceny Act in relation to the $US$3000.
Grange Real Estate Limited with Qualifying Director, Dwight Grange
A third disciplinary hearing held was held on January 16, 2020 against Grange Real Estate Limited with Qualifying Director, Dwight Grange. In that matter the dealership was found to be in violation of Section 44 (1) (c) of the Act – dealing with the failure to produce records requested by the Board; and the (Code of Ethics) Regulations Section 6 (1) (b) – to undertake duties within his competence and for which he was properly registered.
The Board also found Grange Real Estate Ltd to be in breach of Section 5(1)(a–c), which speaks to improper and unprofessional practice and the obligation to maintain the dignity and integrity of the profession at all times.
The licence of Grange Real Estate Limited was thereby suspended for two years, effective January 16, 2020. He was duly notified, having been absent for the hearing.
This hearing arose from a report that was made to the Board by another dealer concerning the sharing of commission from the sale of an apartment building, with the complainant claiming entitlement of 1.5% or $1,390,000.00.