IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO

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1 IN THE MATTER OF A DISCIPLINE HEARING HELD PURSUANT TO BY-LAW NO. 10 OF THE REAL ESTATE COUNCIL OF ONTARIO HARRY SIU / ALEXANDER PILARSKI / RE/MAX REALTRON REALTY INC. Respondents DATE OF DECISION: August 7, 2003 FINDINGS: Harry Siu: In violation of Rules 1(2), 1(5), 10, 21, 46 of the RECO Code of Ethics Alexander Pilarski: In violation of Rule 43 of the RECO Code of Ethics Re/Max Realtron: In violation of Rules 10, 21 & 43 of the RECO Code of Ethics PENALTY: H. Siu: Administrative Penalty of $3000 payable to RECO Penalty of $1500 for violation of probation, payable Undertakes to correct all his advertisements. Alexander Pilarski: Re/Max Realtron: Administrative Penalty of $2000 payable to RECO Administrative Penalty of $2000 payable to RECO Re/Max Realtron undertakes that within six months of the decision of the Discipline Committee, it will provide proof to the Manager of CCD that it has put in place a comprehensive office policy to govern practices of its sales representatives/employees and specifically undertakes to take steps to ensure that in all advertisements the brokerage name will appear in a

2 form appropriate to the advertising medium and at a size, in a type face, and in a sufficiently prominent position so that it is clear who is the brokerage and who is the sales representative. COSTS AND EXPENSES: Harry Siu to pay costs in the amount of $2500 within 30 days of sending this decision. REASONS FOR DECISION This matter was scheduled for a hearing on August 7, At the outset of the scheduled hearing, the parties indicated that they were working on an agreed statement of facts and a joint recommendation as to penalty. As a result, this panel of the Discipline Committee of the Real Estate Council of Ontario ( RECO ) granted an adjournment so that the parties could attempt to resolve their differences. The adjournment ended up lasting several hours but the parties were able to reach an agreed statement of facts and make a recommendation to the panel as to the appropriate penalty under the circumstances. While the panel did have some questions as to some of the provisions of the recommended penalties, ultimately this panel has accepted the joint submissions as to penalty and thereby agree with the resolution reached between the prosecution (i.e. the Complaints, Compliance and Discipline committee of RECO) and the respondents. As both parties had legal counsel, the panel is in agreement with the recommended penalty and see no reason to interfere with the resolution reached between the parties. The recommended penalty is as follows: 1. With respect to Mr. Siu, he will pay a penalty of $3,000 within 60 days of this decision. In addition, given that Mr. Siu was on probation and, pursuant to section 50 of By-law No.10, Mr. Siu is ordered to pay a further penalty in the amount of $1,500 for the violation of probation. This further $1,500, or, in other words, the total of $4,500, is payable within 60 days of this decision. In addition, Mr. Siu undertakes to correct all of his advertisements; 2. With respect to Mr. Pilarski, he was ordered to pay a penalty of $2,000 within 60 days of the decision; 3. With respect to Re/Max Realtron Realty Inc. they are to pay a penalty of $2,000 within 60 days of the decision of the Discipline Committee. In addition, they undertake that within six months of the decision of the Discipline Committee, it will provide proof to the Manager of Complaints, Compliance and Discipline that it has put in place a comprehensive office policy to govern practices of its sales representatives/employees and specifically undertakes to take steps to ensure that in all advertisements the brokerage

3 name will appear in a form appropriate to the advertising medium and at a size, a type face, and a sufficiently prominent position so that it is clear who the brokerage firm is and who the sales representatives are. With respect to costs, it was agreed that Mr. Siu pay costs in the amount of $2,500, payable within 30 days of the decision of the Discipline Committee. The above penalty is so ordered. This panel believes that the penalties are appropriate given the agreed facts. The agreed facts are as follows: Mr. Harry Siu ( Mr. Siu ) is a Member of RECO and a salesperson registered under the Real Estate and Business Brokers Act R.S.O. 1990, Chapter R-4. (the REBBA ). Re/Max Realtron Realty Inc. ( Re/Max Realtron ) is also a Member of RECO and a broker registered under the REBBA. At all material times, Mr. Siu was an employee of, and conducted business on behalf of Re/Max Realtron. Complainant is a Member of RECO and a salesperson registered under the REBBA. Broker is a member of RECO and a broker registered under the REBBA. At all material times, the Complainant was an employee of Broker. On January 14, 2002, RECO received a letter of complaint from the Complainant (the January 14, 2002 Complaint ). The January 14, 2002 Complaint was in relation to the advertising activities of Re/Max Realtron and Mr. Siu. Enclosed with the January 14, 2002 Complaint was a copy of an advertisement of Re/Max Realtron and Mr. Siu (the January 14, 2002 ad ). On the front of the January 14, 2002 ad, i) Mr. Harry Siu s name was considerably larger than the name of Re/Max Realtron and; ii) Were the words We Sell One House Every 3 Days! There was no clear indication of whether it was Mr. Siu or Re/Max Realtron that sold one house every 3 days. iii) There was no clear indication of the registration status of Mr. Siu. Inconspicuous at the bottom left hand corner, in extremely fine print were the words Harry Siu, Sales Representative. On the back of the January 14, 2002 ad was a picture of a property located at 1 A Street under the heading For Sale. There were also full addresses of sixty properties under the heading Some of Harry s sales. In the January 14, 2002 Complaint, the Complainant also raised issue with two (2) bench advertisement of Re/Max Realtron and Mr. Siu, located on the east side of Bayview between Sheppard and Citation Avenues. The complainant advised RECO that in these bench advertisements, Mr. Siu s name was more prominent than that of Re/Max Realtron.

4 As a follow up to the January 14, 2002 Complaint, RECO received additional letters from the Complainant on February 13, 2002 (the February 13, 2002 Letter ) and another on February 27, 2002 (the February 27, 2002 Letter ). Enclosed in the February 13, 2002 Letter were two advertisements, identical to the January 14, 2002 ad (the February 13, 2002 ads ). One advertisement, also identical to the January 14, 2002 ad was enclosed in the February 27, 2002 Letter (the February 27, 2002 ad ). The February 13, 2002 ads and the February 27, 2002 ad contained identical information to the January 14, 200 ad. The only visible changes to the front of the February ad and the February 27, 2002 ad were: i.) ii) The words Sales Rep appeared underneath Mr. Siu s names. These words were bigger than the inconspicuous words in extremely fine print at the bottom left corner of the January 14, 2002 ad, The words Re/Max were larger, almost same in size as Mr. Siu s name. The Words Realtron Realty were still considerably smaller that Mr. Siu s name. On the back of each of the January 14, 2002 ad, the February 13, 2002 ads and the February 27, 2002 ad was a picture of a property advertised as sold, and addresses of 60 properties listed under the heading Some of Harry s sales. At no time did Mr. Siu obtain the written consent of the buyers of the properties advertised at the back of the January 14, 2002 ad, February 13, 2002 ads and the February 27, 2002 ad before advertising them as sold by Mr. Siu. On all the ads received by RECO; i) Were the words We sell 1 house every 3 days ; ii) The words Realtron Realty were considerably smaller than the name of Mr. Siu Additional information obtained by RECO disclosed that: i) Mr. Siu did not in fact sell one house every three days; ii) On the Re/Max Realtron and Mr. Siu s bench advertisements located on the east side of Bayview between Sheppard and Citation Avenues (the bench advertisements ), Mr. Siu s names were in fact larger and more prominent than that of Re/Max Realtron; iii) The bench advertisements did not disclose whether Mr. Siu was a salesperson or a broker. Accordingly, Mr. Siu acted unprofessionally by: i. Communicating information that is false and misleading when he disseminated information stating We Sell One House Every 3 Days! ii. Advertising properties as sold without obtaining the written consent of the buyers to do so. iii. Running an advertisement that did not disclose his registration status;

5 iv. Running advertisements in which his name was larger than the name of Re/Max Realtron. Thereby breaching the following Rules of the RECO Code of Ethics: Rule 1(2) - Ethical Behaviour - A Member shall endeavour to protect the public from fraud, misrepresentation or unethical practice in connection with real estate transactions. Rule 1(5) - Ethical Behaviour - A Member shall deal fairly, honestly and with integrity with the public, other Members and third parties. Rule 10 - Misrepresentation or Falsification - A Member shall not make any statement or participate in the creation of any document or statement that the Member knows or ought to know is false or misleading. Rule 21 - Advertising - A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for Properties and services, is not false, misleading or deceptive. Rule 46 - Unprofessional Conduct - A Member shall not engage in an act or omission relevant to the practice of the profession that, having regard to all the circumstances, would reasonably be regarded by Members or the public as disgraceful, dishonourable or unprofessional. Accordingly Mr. Alexander Pilarski, as the Principal Broker and the operating mind of Re/Max Realtron, acted unprofessionally when he: i. Permitted Re/Max Realtron and Mr. Siu to place bench advertisements in which Mr. Siu s name was larger than the name of Re/Max Realtron; ii. Permitted Re/Max Realtron and Mr. Siu to disseminate advertisements which did not disclose Mr. Siu s status as a salesperson, Thereby breached the following Rules of the RECO Code of Ethics: Rule 43 - Broker Responsibility - A broker shall be responsible for the professional conduct and professional actions of those Members registered with that broker. Accordingly Re/Max Realtron as the Employer of Mr. Siu acted unprofessionally when it: i. Place or permitted Mr. Siu to place bench advertisements in which Mr. Siu s name was larger than the name of Re/Max Realtron; ii. Disseminated or permitted Mr. Siu to disseminate advertisements which did not disclose Mr. Siu s status as a salesperson, Thereby breaching the following Rules of the RECO Code of Ethics:

6 Rule 10 - Misrepresentation or Falsification - A Member shall not make any statement or participate in the creation of any document or statement that the Member knows or ought to know is false or misleading. Rule 21 - Advertising - A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for Properties and services, is not false, misleading or deceptive. Rule 43 - Broker Responsibility - A broker shall be responsible for the professional conduct and professional actions of those Members registered with that broker. We note that the parties agreed that the above rules were breached by the respective parties as indicated above. We would like to thank both RECO Lawyer and Respondents Lawyer for their considerable work on the agreed statement of facts and recommended penalty, which was of considerable assistance to the panel