Protect your deposit when buying a Home
When Bob and Mary Watson decided to take the plunge and invest their savings into a home, they didn’t realize their dream would soon turn into a nightmare. A man holding himself out to be a registered real estate professional was actually a fraudster who took their deposit and left them empty-handed.
In this case, the Watsons are a fictional couple. Their situation, however, is very real. The consequences of dealing with someone who is unregistered were highlighted in a recent court case in which an Alliston man was sentenced to 15 months in jail for trading without registration. Court was told he accepted trust deposits from consumers for real estate trades, then failed to deposit the funds into a trust account as required under the Real Estate and Business Brokers Act,2002 (REBBA 2002).
If he had been registered with the Real Estate Council of Ontario (RECO), those trust deposits would have been insured. But due to his unregistered status, the potential home buyers lost thousands of dollars. “I think it’s important to note that consumers were not able to recover their deposits because (he) was not registered, and therefore, (the deposits were) not insured,” RECO lawyer Tim Snell said, following the sentencing.
RECO recommends that buyers and sellers confirm their real estate broker or salesperson is registered with RECO prior to entering into any agreement for services. Access the registrant search tool at www.reco.on.ca.
“Real estate brokers and salespeople registered by RECO (Real Estate Council Of Ontario) have met stringent standards of qualification, including education and training, and must adhere to strict standards of conduct in providing services,” says Allan Johnston, Registrar with RECO. Consumer protection is a key part of RECO’s mandate to protect the public interest by regulating the trade of real estate on behalf of Ontario Ministry of Consumer Services. RECO not only enforces the standards required to obtain and maintain registration as a brokerage, broker or salesperson, it conducts routine inspections of brokerage offices to ensure compliance with REBBA 2002. It also addresses inquiries, concerns and complaints about the conduct of registrants.
Source: Summer Edition 2011 RECOnnect Magazine (for Real Estate Licensed Members)
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