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REAL ESTATE COUNCIL OF BRITISH COLUMBIA DISCIPLINE DECISION
In the matter of the Real Estate Services Act
S.B.C. 2004, c. 42
AND in the matter of a Disciplinary Hearing held pursuant to Section 41 of the Real Estate Services Act
Dates of Hearing: September 4 and 5, 2014
Hearing Decision: April 27, 2015
Note: The respondent filed a notice of appeal to this decision with the Financial Services Tribunal of British Columbia. On November 13, 2015, the Financial Services Tribunal issued its decision, which upheld the findings of the Discipline Hearing Committee that Mr. Parsons had committed professional misconduct and upheld the cancellation of Mr. Parsons' licence, but shortened the length of time before he may apply to be relicenced, reduced the discipline penalty, and reduced the enforcement expenses. The notice of the Appeal Decision by the Financial Services Tribunal is available here.
Issue: James Sidney Parsons, associate broker, One Percent Realty Ltd. (Van5), Vancouver, while licensed with Camosun Properties Ltd. dba Re/Max Camosun, Victoria, was found by a Discipline Hearing Committee to have committed professional misconduct by contravening section 35(1)(a) of the Real Estate Services Act in that he:
- contrary to section 3-3(1)(a) of the Council Rules, failed to act in the best interests of his client, and contrary to section 3-4 of the Council Rules, failed to act honestly and with reasonable care and skill by failing to make either sufficient or any inquiries about his client's ability to conduct business in a prudent manner and with due regard for her own interest when he knew or ought to have known that his client's ability to do so was in question due to her status as an inpatient at a psychiatric hospital;
- contrary to section 35(1)(c) of the Real Estate Services Act, engaged in deceptive dealing by withholding the following facts from his client, when he knew or ought to have known that the facts were of material importance to his client's decisions both to use his services as a representative and to purchase property in Victoria, BC (the "Cloverdale Property");
- the seller had made an offer on a different property on Cloverdale Avenue which had been accepted but was subject to the sale of the Cloverdale Property; and
- he referred the listing for the Cloverdale Property to his son who, at all material times, was representing the seller.
- contrary to section 3-3(1)(f) of the Council Rules, failed to disclose to his client all known material information respecting the real estate services, and the real estate and the trade in real estate to which the services related by failing to disclose:
- the information referred to in section b(i) and b(ii) above; and
- the existence of an engineer's report ("Engineer's Report") addressing the ingress of water at the Cloverdale Property.
- contrary to section 3-3(1)(d) of the Council Rules, failed to advise his client to obtain independent professional advice regarding the Engineer's Report;
- contrary to section 3-3(1)(a) of the Council Rules, failed to act in the best interests of his client and, contrary to section 3-4 of the Council Rules, failed to act honestly and with reasonable care and skill by:
- preparing an offer for the Cloverdale Property which failed to include a "subject to" clause expressly providing for his client to obtain a property inspection;
- preparing an offer for the Cloverdale Property which failed to provide his client with sufficient opportunity to undertake basic due diligence by obtaining and reviewing documents, including the minutes of the strata council, engineer's reports, and building inspection reports;
- withholding from his client material information about the condition of the Cloverdale Property;
- assisting his client to proceed with a wholly unsuitable offer to purchase the Cloverdale Property and, more particularly, by doing so when he knew ought to have known that his client was in a highly vulnerable condition;
- failing to make either sufficient or any inquiries about his client's ability to conduct business in a prudent manner and with due regard for her own interests when he knew or ought to have known that his client's ability in this regard was in question; and
- failing to advise his client to obtain independent professional advice in connection with the purchase of the Cloverdale Property when he knew or ought to have known that such advice was required given the condition of the Cloverdale Property, his son's commercial relationship with the seller, and his client's highly vulnerable condition;
- contrary to section 3-3(1)(h) of the Council Rules, failed to use reasonable efforts to discover relevant facts respecting the Cloverdale Property by failing to make any or sufficient inquiries about the condition of the Cloverdale Property given the existence of the Engineer's Report and the content of the minutes of the Strata Council;
- contrary to section 5-13(2) of the Council Rules, failed to disclose the existence of a water ingress problem at the Cloverdale Property; that ingress being a material latent defect as that term is defined in section 5-13(1) of the Council Rules; and
- contrary to section 3-3(1)(i) of the Council Rules, failed to take reasonable steps to avoid any conflict of interest or, and, contrary to section 3-3(j) of the Council Rules, failed to disclose the conflict of interest promptly and fully to his client and then failed to refer his client to another representative or to recommend to his client that she obtain independent professional advice before using or continuing to use him as a representative in connection with the purchase of the Cloverdale Property.
The Discipline Hearing Committee also found that Mr. Parsons' failure to represent the interests of his client adequately or at all, in a systematic manner and while in a conflict of interest, and when he knew or ought to have known that his client was in a highly vulnerable state due to her personal circumstances and mental status and knew that his client had been a patient in a psychiatric hospital at times material to his representation of his client, is conduct that would undermine public confidence in the real estate industry and bring the real estate industry into disrepute and therefore constituted conduct unbecoming, contrary to sections 35(2)(b) and 35(2)(c) of the Real Estate Services Act.
James Sidney Parsons was subject to an Order of a discipline committee that:
- his licence be cancelled immediately effective on April 29, 2015;
- he may not apply for relicensing for a period of five (5) years until April 29, 2020 and until the discipline penalty and enforcement expenses set out below are paid;
- he must pay a discipline penalty to the Council in the amount of $10,000.00;
- if he applies for relicensing, he must, at his own expense, register for and successfully complete the Real Estate Trading Services Remedial Education Course and any other educational requirements required of him upon relicensing; and
- pay enforcement expenses to the Council in the amount of $22,487.85.