Realtor has licence stripped after clients left in dark

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This article was published 18/04/2024 (770 days ago), so information in it may no longer be current.

A Winnipeg real estate agent has been found guilty of professional misconduct and stripped of his licence after his “deceptive dealing” cost his clients money and forced them to scramble to find another agent.

Reginald Wayne Kehler reduced the sale price of a home without telling the homeowners, and failed to tell them until just two days before the sale was set to close that the prospective buyers, also his clients, had not come up with an agreed upon $100,000 deposit, according to a decision by the Manitoba Securities Commission released Thursday.

Kehler’s actions “bring into sharp focus the pitfalls that can arise from being both the listing and selling agent in a transaction,” the commission said in an 11-page ruling.

“If the sellers had been represented by their own agent, it is likely they would have been told at an earlier date that the deposit had not been paid and could have acted on that information,” the commission said. “Kehler tried to keep the transaction alive (a transaction in which he would receive the entire commission instead of sharing it with another agent), granting the buyer a series of extensions to the deadline for paying the deposit, instead of living up to his obligation to provide full disclosure to the sellers.”

Kehler was the agent for a couple who were trying to sell their Bramble Drive home in advance of moving to Ottawa in the summer of 2020. The couple accepted an offer on June 15 for $570,000, with a possession date of July 15, and the buyer agreed to deliver a deposit of $100,000 within 72 hours of the offer being accepted.

The couple and their two young children were in Toronto, en route to Ottawa on July 13 when Kehler called to inform them he still hadn’t received the deposit from the buyers, admitting he had previously given them an extension.

Kehler told the commission he didn’t inform the couple earlier because he didn’t want to cause them stress and believed the deposit was forthcoming.

“This is hardly a justification for not doing so,” the commission said. “Indeed, it is difficult to imagine a situation designed to cause the sellers more stress than waiting until two days before the scheduled closing when they had already packed up and driven most of the way to Ottawa to tell them the buyer had not paid one cent of the deposit.”

The sellers told Kehler to press the buyers to close the deal, and agreed to reduce the deposit to $20,000 and move the possession date to July 20 in exchange for an additional payment of $5,000.

The deal ultimately fell through, and Kehler recommended the house be put back on the market later that month with an asking price of $574,900.

On Aug. 10, the sellers agreed to reduce the selling price by $7,000, but said, when reviewing the online listing two weeks later, they saw Kehler had reduced it by another $3,000 without telling them.

Kehler, in an email to the sellers, claimed he had told them about the second price reduction in a previous phone call.

“There is a disagreement in the evidence before us as to whether the (sellers) agreed to reduce the sale price of the property,” the commission said. “However, given the emphatic denials of the sellers … we conclude that Kehler did not have the authority to drop the listing price.”

The couple changed realtors in September 2020 and four months later sold the house for $507,500,

The couple pursued a claim against Kehler’s brokerage, Re/Max Professionals, which was referred to their insurer. While the claim was ultimately rejected, it revealed the existence of documents purporting to have been signed by the couple acknowledging Kehler would be acting for both sides of the sale.

The couple said they had never seen the document, while Kehler told the commission he had signed their names in their absence, with their consent.

The commission ordered the couple be compensated $10,400 from the Real Estate Reimbursement Fund and that Kehler pay $12,000 in commission costs.

dean.pritchard@freepress.mb.ca