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Mid-Year Code of Ethics Violations Activity Report (1/1/20 - 6/30/20)

Mid-Year Code of Ethics Violations Activity Report (1/1/20 - 6/30/20)

Published Monday, July 6, 2020

The Professionals Services Department has received 36 ethics complaints, 3 citation complaints, and 5 arbitration requests so far in 2020. Complaints are slightly up from last year. For 2019 year-to-date, we had received 28 ethics complaints, 8 citation complaints, and 4 arbitration requests.  

The following summaries include cases that resulted in a finding of a violation of the Code of Ethics and have been ratified by the Board of Directors. Identifying information has been omitted. Please note that these summaries do not provide all material facts, evidence, and details relied upon by the hearing panel in making a determination.

Case 1

Summary

The Complainant noticed a for lease sign on a commercial building. The sign did not indicate the advertisement was from a real estate professional. The Complainant met the Respondent at the building and the Respondent presented a lease agreement.  The Respondent went through the lease line by line with the Complainant, which included an addendum indicating repairs to be completed. The Complainant subsequently signed the lease commencing on March 1st. In the month following his move in, heavy rains caused the building to leak. Shortly thereafter, the Complainant discovered the Respondent was a licensed real estate broker.

Violation Found

The Respondent was found in violation of Article 1. The Respondent failed to provide full disclosure and obtain informed consent from the Complainant under the implied limited agency representation.

The Respondent was found in violation of Article 12, as supported by Standard of Practice 12-6. The Respondent failed to disclose his status as a real estate licensee both through his advertisement and real estate communications with the Complainant.

Prior Violations

None

Discipline

The Respondent was issued a Letter of Reprimand to be maintained in the Respondent’s membership file and removed after five (5) years if no further violations of the Code of Ethics occur. The Respondent shall complete a 2-hour course on Agency with proof of attendance submitted to the Professional Services Department within sixty (60) days of ratification of this decision and must attend one of the next two available sessions of MIBOR’s Professionalism Matters course, without exception. The Respondent shall pay a fine in the amount of $1000 within sixty (60) days of ratification of this decision. This fine is addition to the automatic $250 administrative fee assessed upon ratification.

Case 2

Summary

The Respondent’s buyer client was interested in a listed property and a showing was scheduled. The buyer later canceled the appointment and subsequently the property went pending with another buyer. Several months later, a mutual release between the buyer and the seller was executed and the listing status was changed back to active. The Respondent’s buyer client noticed that the property was active again and asked the Respondent to show the property. Before the Respondent was able to schedule a showing, the seller withdrew the property from the market. Later that day, the Respondent showed the property to his buyer client without scheduling an appointment or getting permission from the owner

Violation Found

The Respondent was found in violation of Article 1, as supported by Standard of Practice 1-16. The Respondent accessed listed property on terms other than authorized by the seller.

The Respondent was found in violation of Article 3, as supported by Standard of Practice 3-9. The Respondent provided access to listed property on terms other than authorized by the owner.

Prior Violations

None

Discipline

The Respondent was issued a Letter of Warning to be maintained in the Respondent’s membership file and shall be removed after one (1) year if no further violations of the Code of Ethics occur. The Respondent shall pay the administrative fee of $250 within thirty (30) days of ratification of this decision.

Case 3

Summary

The Respondent was showing homes to her clients and they decided they wanted to see a home they had previously viewed a few days prior since their daughter was in town. When the Respondent had previously showed the property to her clients, the home was vacant. The Respondent attempted to reach the listing broker to schedule a showing but did not make contact. Since the Respondent knew the property was vacant and they were already in the neighborhood, the Respondent showed the property to her clients without authorization.

Violation Found

The Respondent was found in violation of Article 1, as supported by Standard of Practice 1-16. The Respondent accessed listed property on terms other than authorized by the seller.

The Respondent was found in violation of Article 3, as supported by Standard of Practice 3-9. The Respondent provided access to listed property on terms other than authorized by the owner.

Prior Violations

None

Discipline

The Respondent was issued a Letter of Warning to be maintained in the Respondent’s membership file and shall be removed after one (1) year if no further violations of the Code of Ethics occur. The Respondent shall attend one of the next two available sessions of MIBOR’s Professionalism Matters course, without exception. The Respondent shall pay the administrative fee of $250 within thirty (30) days of ratification of this decision.

Case 4

Summary

The Respondent entered into a contract to purchase the Complainant’s property on August 30th. The contract provided that the Respondent was to submit an earnest money check in the amount of $500 within 5 days. The check was mailed by the Respondent on September 9th. On September 11th, the Complainant learned from her listing broker that the Respondent wanted out of the contract and had put a stop payment on the check

The Complainant did not know that the Respondent was a licensed real estate broker until after the stop payment was placed on the earnest money check, which prompted her to do online research.

Violation Found

The Respondent was found in violation of Article 4, as supported by Standard of Practice 4-1. The Respondent did not disclose her licensure status in writing to the listing broker or to the owner.

Prior Violations

None

Discipline

The Respondent was issued a Letter of Warning to be maintained in the Respondent’s membership file and removed after six (6) months if no further violations of the Code of Ethics occur. The Respondent shall attend one of the next two available sessions of MIBOR’s Professionalism Matters course, without exception. The Respondent shall pay a fine in the amount of $250 within thirty (30) days of ratification of this decision. This fine is addition to the automatic $250 administrative fee.

Case 5

Summary

The Respondent represented the Complainant as the buyer in a limited agency transaction. The Respondent prepared a purchase agreement which included a term that all appliances would be included.  Earnest money in the amount of $500 was submitted to the Respondent. Shortly after acceptance of the agreement, the Complainant noticed that the appliances were missing. The parties could not reach an agreement on the missing appliances so the Respondent prepared and presented a mutual release to the Complainant indicating the earnest money would be retained by the seller. The Complainant told the Respondent that he expected the earnest money to be returned to him and asked the Respondent to notify the seller of his request. No mutual release indicating the return of earnest money to the Complainant was ever created or submitted to the seller. The Complainant asked the Respondent for contact information for the seller who had moved out of state so that he could file in small claims court for return of the earnest money but the Respondent refused to provide it. Ultimately, the Complainant filed in small claims court against the Respondent for return of the earnest money and filed a lien against the property. Shortly thereafter, the seller contacted the Complainant to resolve the issue outside of court and to have the lien removed. The Respondent admitted that he did not have the parties sign limited agency disclosure documents but it was clear that he was representing both parties and while he did not have authorization to provide the seller’s contact information to the Complainant, he admitted he may have provided the Complainant’s contact information to the seller.

Violation Found

The Respondent was found in violation of Article 1, as supported by Standard of Practice 1-5. The Respondent failed to promote and protect the interests of clients by not fully disclosing and obtaining informed consent for limited agency. Further, the Respondent failed to protect the Complainant’s interests when he failed to prepare a mutual release despite the Complainant’s request and by failing to treat the parties equally when asked for contact information of the other party.

Prior Violations

None

Discipline

A Letter of Warning shall be issued and maintained in the Respondents membership file for two (2) years. The Respondent shall attend in person a state approved course on Agency and provide proof of attendance to the Professional Services Department within six (6) months of the ratification of this decision. The Respondent shall pay a fine in the amount of $200 within thirty (30) days of ratification of this decision. The Respondent shall pay the administrative fee of $250 within thirty (30) days of ratification of this decision.

Case 6

Summary

The Respondent contacted the Complainant by phone and inquired as to the pending status of the Complainant’s listed property as she had prospective clients that were interested in seeing it. During the call, the Complainant explained that their current offer was solid, and no further showings would be granted.

A few minutes later, the Respondent again called the Complainant and told her that she had never met the potential clients before and would like to meet them at the property. The Respondent told the Complainant that the owner had lived in the home for over 40 years, was upset each time it was shown, and did not want to further upset her client. The Complainant told the Respondent that she could not meet her clients at the property, and they ended the call.

Over 3 hours later, the Complainant’s client contacted the Complainant very upset. Her client stated that there were people at her home, and they indicated they were there to see it with an agent who had not arrived yet. The Complainant explained to her client that another agent had requested to show the property, but it was denied.  The Complainant then contacted the Respondent to ask why she allowed her potential clients to go to the property. The Respondent responded that they were all on their way to another property and wanted to meet them there only for a few minutes.

The Respondent admits she directed her potential clients to meet her at the property and did not let them know they should not go there after her request was denied. The Respondent testified that she never intended to show the property after her request was denied, she only intended to meet the potential clients there.

Violation Found

The Respondent was found in violation of Article 1, as supported by Standard of Practice 1-16. The Respondent permitted potential clients to access or use listed property on terms other than those authorized by the owner.

The Respondent was found in violation of Article 3, as supported by Standard of Practice 3-8. The Respondent misrepresented the availability of access to show a listed property to the potential clients and did not relay to them her knowledge that the property could not be shown.

Prior Violations

None

Discipline

The Respondent was issued a Letter of Warning to be maintained in the Respondent’s membership file and removed after two (2) years if no further violations of the Code of Ethics occur. The Respondent shall attend one of the next two available sessions of MIBOR’s Professionalism Matters course, without exception. The Respondent shall pay the automatic $250 administrative fee within 30 days of ratification.

Case 7

Summary

On October 22nd, the Complainant was made aware of a post made by the Respondent on Facebook. The post was a screenshot of a text message conversation between the Respondent and another individual, a friend of the Respondent. The screenshot was posted as the Respondent’s profile picture. In the screenshotted text message conversation, the Respondent stated that the Complainant was a “lazy agent”.

The Respondent admitted that she had a private text conversation with a friend on October 21st wherein she called the Complainant a “lazy agent.” The Respondent testified that she took a screenshot of the conversation to discuss later with her husband and then put the phone in her pants and gave her daughter a bath. Shortly thereafter, a friend of the Respondent contacted the Respondent making her aware of the posting. She removed the post after it only being up for 4 minutes.

The Respondent contends that the statement she made in the text message is not “false or misleading” because it is true.  Specifically, Respondent asserts that calling the Complainant a “lazy agent” was a truthful statement because it was based on statements made to her by a previous client of the Complainant.  The Respondent supplied the Hearing Panel with an affidavit from the Complainant’s former client which states, “any statement made by [Respondent] that [Complainant] is lazy . . . is true.”  Further, the Respondent testified that she did not knowingly post the conversation to Facebook; rather, it was accidently posted while she was giving her daughter a bath.

The Hearing Panel finds that stating to a third party that another REALTOR® is a “lazy agent” is a misleading statement in violation of Article 15.  The Hearing Panel rejects the Respondent’s defense that her assertion of opinion could be factually true. Moreover, the Hearing Panel finds the claim to be misleading because if -- as the Respondent now claims -- the assertion was based on information told to her by the Complainant’s former client, she in no way qualified or explained that fact to the recipient of the text.  Instead, the Respondent’s text message affirmatively claimed, “He’s mad because he’s a lazy agent and his investor called me to help her.”

Finally, Article 15 can be, and in this case was, violated in a “private conversation.”  Accordingly, the Hearing Panel need not make a finding as to whether the Facebook post was accidental or intentional; the text conversation itself is sufficient.

Violation Found

The Respondent was found in violation of Article 15. The Respondent knowingly and recklessly made a misleading statement about the Complainant’s business practices when she stated in a text conversation with another individual that the Complainant was a “lazy agent”

Prior Violations

None

Discipline

The Respondent shall be issued a Letter of Warning to be maintained in the Respondent’s membership file and removed after twelve (12) months if no further violations of the Code of Ethics occur. The Respondent shall attend one of the next two available sessions of MIBOR’s Professionalism Matters course, without exception. The Respondent shall pay a fine in the amount of $250 within thirty (30) days of ratification of this decision. This fine is addition to the automatic $250 administrative fee.