Real estate fraud: Falsely taking a property off the market

When a promise to purchase has been duly accepted by the seller of an immovable, a real estate broker cannot, under any circumstances, accept a buyer’s request to sign and have the seller sign an amendment to a brokerage contract in order to take the property off the market and remove the detailed description sheet and the information contained therein from an information listing service (e.g. CENTRIS^®). A property can only be taken off the market by a seller who no longer wishes to sell his property.

Such requests often emanate from buyers who hint that they will not follow through on their obligations and the sale will not take place if the immovable is not taken off the market. These buyers are interested in multi-dwelling immovables, mainly duplexes in poor condition whose selling price is below the municipal evaluation or the market value for comparable properties in the same sector. For the signing of the deed of sale, the buyer who signed the promise to purchase is replaced by someone else. Concomitantly, a second transaction for a much higher price is carried out between this buyer and a third party. The transaction carries a mortgage condition which, in accordance with financing rules, must be an insured loan. With the immovable removed from the listing service, the financial institution and the mortgage insurer cannot verify the original asking price and are not otherwise informed of it.

In this context, taking the property off the market goes against the Real Estate Brokerage Act and the regulations thereunder. It involves having a seller make a false declaration on an OACIQ form, making the detailed description sheet disappear or failing to send the notices of sale to the information listing service, all for obscure or dishonest motives on the part of a buyer. Furthermore, a real estate broker who claims to be unaware that the purpose of this practice is to mask a fraudulent or dishonest operation is wilfully turning a blind eye and could be liable to disciplinary action, even leading to criminal charges.