Client’s $45,000 deposit was misappropriated
Derrick Penner
Sun
A Vancouver real estate agent who misappropriated a client’s $45,000 deposit has been hit with $15,000 in fines and enforcement costs and his licence has been cancelled, the strictest penalty ever handed out by the Real Estate Council of B.C.
The Council, this week, handed down its decision against Smrat (Sam) Sharma to settle its investigation into a long list of infractions, the most serious of which was the misappropriation of a client’s deposit.
Sharma also faces a criminal investigation into his conduct by the Financial Institutions Commission. Ken Fraser, chief investigator for the commission, said that process is still underway.
“We have no tolerance for tampering with trust money,” Real Estate Council spokesman Anthony Cavanaugh said in an interview.
“[Trust funds] are one of the most sacred parts of any real estate transactions and consumers have to feel confident their moneys are protected.”
He added it is the stiffest penalty the council has handed out since being granted expanded disciplinary powers in January 2005, as part of the new Real Estate Services Act.
Cavanaugh said the council was tipped to Sharma’s potential misconduct in April 2005 and immediately suspended his licence to begin its investigation.
The Real Estate Council handed down its decision Tuesday in the form of a consent order that included an agreed set of facts that lay out the case.
It details a long list of infractions in 15 transactions between 2003 and 2005, including failing to notify sellers that deposits had been paid late, failing to properly document transactions, failing to notify his brokerage that he was acquiring properties from clients and conflict of interest.
In the most serious case, the consent order states that Sharma, in March of 2005, directed a client to pay the $45,000 deposit due on the purchase of a west-side Vancouver home directly to the account of a numbered company owned by Sharma, and not his brokerage’s trust account at Sutton Group Langara Realty.
Sharma also signed the seller’s name, without the seller’s knowledge, to an addendum in the contract which purported to authorize the payment.
However, the buyer learned that the deposit had not been made to the seller and the transaction couldn’t close as his family was preparing to move into the house.
The order notes that the buyer and his wife were forced to drain their bank accounts and extend a line of credit to cover $31,093 of the deposit. Sutton Group Langara also came forward to cover for Sharma by waiving the transaction’s $13,905 commission and honouring a $5,000 rebate that Sharma had promised the buyer.
The Real Estate Council has since compensated the buyer for $33,339.
Sharma, during the compensation hearing, said he would reimburse the buyer for $36,093, which would also cover the $5,000 rebate.
On March 20, the corporation that administers the council’s compensation fund won a judgement in B.C. Supreme Court against Sharma and his company to recover that money. However, he had not made any payments at the time the council’s decision was released.
The numbered company, in its registration with the B.C. Registrar of Companies, lists the Burnaby law office of Chee Dusevic as its registered office. A call to that office Thursday was not returned.
Cavanaugh said 461 complaints were filed to the council between June 2005 and May 2006 which is a 33-per-cent increase from the previous year.
© The Vancouver Sun 2006