• • BRITISH

COLUMBIA

IN THE MATTER OF THE REAL ESTATE SERVICES ACT

S.B.C. 2004, c. 42

·AND·

IAN HAYDEN MURPHY, BATELEUR PROPERTIES INC. and BATELEUR PROPERTIES INC. dba EXECUTIVE PROPERTY MANAGEMENT and dba

EXECUTIVE MANAGEMENT

DECISION

Before: Richard Fernyhough, Designate of the Superintendent

Date of Hearing: February 20, 2014

Place: Vancouver, British Columbia

Appearing: Stephen E. King, Counsel for the Staff

Ian Hayden Murphy, Appearing on his own behalf and on behalf of Bateleur Properties Inc. dba Executive Property Management and dba Executive Management

12116 555 West Hastings

Vancouver, Be V6B 4N6 Telephone : 604-660-3555 Facsimile: 604-660-3655

www.fic.gov.bc.ca

2

Introduction

The Staff of the Superintendent (the "Staff') have alleged that Ian Hayden Murphy (the

"Respondent") and/or the company he controls, Bateleur Properties Inc. dba Executive

Property Management and dba Executive Management (Collectively "EPM"), have been

providing Real Estate Services as that term is defined in the Real Estate Services Act

("RESA") during the period from September, 2010 until the date of the hearing without

being licensed under the RESA to do so.

On June 10, 2013 the Superintendent of Real Estate (the "Superintendent") issued a

Notice of Hearing in this matter setting out the allegations against the Respondent and

EPM giving the Respondent and EPM an opportunity to be heard to address the

allegations. The matter was set to be heard on February 20-21,2014. The hearing

commenced as scheduled on February 20,2014 (the "Hearing") and the evidence

portion of the Hearing was completed on that date.

At the Hearing, the Respondent appeared on his own behalf and on behalf of EPM.

Counsel for the Staff entered as an exhibit an Agreed Statement of Facts signed by the

Respondent and the Respondent confirmed at the Hearing that he was in agreement

with the facts stated therein. I note that the Agreed Statement of Facts likely reduced

the amount of time needed for the Hearing considerably.

Counsel for the Staff tendered two witnesses: _ K_ the complainant; and _ p., an investigator for the Superintendent. The Respondent testified on his

own behalf and on behalf of EPM.

It was agreed at that time by both counsel for the Staff and the Respondent on behalf of

himself and EPM that argument would be by way of written submissions. Those

submissions were ultimately received and considered.

Evidence at the Hearing

As earlier stated, counsel for the Staff entered as an exhibit in the Hearing an Agreed

Statement of Facts. The relevant facts agreed upon by the Staff and the Respondent

are as follows:

3

1. Bateleur Properties Inc. ("Bateleur") was incorporated on July 19, 2005. At all

material times the Respondent was the operating mind of Bateleur. Bateleur

has never been licensed pursuant to the RESA.

2. Bateleur has and continues to carry out business under the name Executive

Property Management and/or Executive Management.

3. The Respondent was licensed as a representative to provide rental property

management services with Statesman Realty Corporation dba Realty

Executives of Kelowna ("Realty Executives") from June 16, 2009 to October 29,

2010.

4. The Respondent was licensed as a representative to provide rental property

management services with Downtown Realty Ltd. dba Royal Lepage Realty

("Royal Lepage") from October 29, 2010 to June 15, 2011.

5. As of June 15, 2011, the Respondent ceased to a hold a license to act as a

representative for the provision of rental property management services on

behalf of Royal Lepage. The Respondent has not been licensed under the

RESA since that time.

6. At no time has the Respondent been registered to provide rental property

management services under the RESA on his own behalf or on behalf of any

entity other than the entities referenced above at paragraphs 3 and 4.

7. During the period that the Respondent was licensed to provide rental property

management services on behalf of Realty Executives, the managing broker of

Realty Executives was

8. On July 31, 2012, .~entered into a Consent Order with the Real

Estate Council of British Columbia ("RECBC") .• ~ was reprimanded

in part as a result of her failure to supervise Realty Executives' licensees. It

would appear from the Consent Order that. W 's failure to supervise

those licensees was in relation to allegations that the Respondent, while

licensed as a representative with Realty Executives, was providing rental

property management services through EPM, an unlicensed entity.

4

g. During the period that the Respondent was licensed to provide rental property

management services on behalf of Royal Lepage, the managing broker of Royal

Lepage was _-r.-10. On December 3, 2012,.~ entered into a Consent Order with the

RECBC .• ""was reprimanded in part as a result of his failure to

supervise Royal Lepage's licensees. As with the Consent Order entered into by

• W , it appears that .T_'s failure to supervise his licensees

was in relation to allegations that the Respondent while licensed as a

representative with Royal Lepage, was providing rental property management

services through EPM, an unlicensed entity.

11. It should be noted that neither the Respondent nor EPM was a party to either of

the Consent Orders noted above. Neither. W_ nor .T_was

called as a witness in the Hearing to give viva voce evidence. The evidential

value of these Consent Orders is therefore somewhat limited; however these

Consent Orders were used to cross-examine the Respondent and his evidence

in that regard will be discussed below.

12. On August 17, 2011, the Superintendent, through her legal counsel, sent a

registered letter to the Respondent and EPM notifying them of the complaint the

Superintendent had received alleging that the Respondent and EPM were

providing rental property management services without meeting the licensing

requirements of the RESA That letter went on to state:

If you are providing rental management property seNices in breach of RESA, I would ask that you please cease immediately until such time as you are licensed to do so. If you require information about licensing, I would encourage you to contact the Real Estate Council of BC, or review their website at www.recbc.ca.

13. On or about March 2g, 2012 _ K submitted a complaint to the

Superintendent alleging that (1) the Respondent and EPM were providing real

estate services without a valid license and (2) EPM had an active website

advertising that it provided rental property management services . • K ••

also provided eight executed property management agreements between EPM

5

and various owners of rental properties in a strata building called the S. in

Vernon, British Columbia (the "Agreements"). The dates of the Agreements

coincided with the term of the Respondent's license with Realty Executives. The

terms of the duly executed Agreements included the following pertinent

information:

a) The Agreements were between the individual owners of units in the

~andEPM;

b) The Agreements stipulate that EPM is responsible for collecting rents,

giving receipts and rendering accounts to the owner, advertising the

property, arranging showings of the property, collecting and checking

personal information on suitable candidates, providing owners with a

shortlist of suitable candidates to select from, renting and leasing the

property, completing a condition inspection report on new tenants

moving in, renewing and cancelling rental agreements and leases for

the property or any part thereof, collecting security deposits and deposit

into owner's bank account and handling all inquiries reported by

tenants;

c) The Agreements stipulate that the owner will pay EPM 10% of gross

collected rents; a one-time tenant placement fee per new tenant of 25%

of the 1 st month's rent payable on the commencement of the applicable

tenancy; any out of scope service including preparation, submission and

attendance of arbitration hearings; coordination with 3rd parties ego

contractors, realtors/sales viewing and building inspections will be

charged at $50 per hour; and

d) The Agreements stipulate that upon expiration of the initial term, the

Agreements shall automatically be renewed and extended for a like

period of time unless terminated in writing by either party 30 days prior

to the date for such renewal.

14. Included in the correspondence provided by. K_was a letter dated

December 2,2010 wherein the Respondent and EPM through their legal

6

counsel provided a list of units in the ~ being managed by EPM to the

strata council at the ~, The list included eleven units and the names of

each unit's owners:

Unit Owner

15. • K_ also provided an email from the Respondent and EPM which

included a breakdown of the costs claimed in a small claims action initiated by

the Respondent against.K_, The cost breakdown was as follows:

"9 Owners (13 units) contracted with EPM prior to OSM involvement"

7

If allowed to deliver as contracted (Le. no vacancies). Total annual value

$24,976.75.

If allowed to deliver as per agreement (Le. no interference by OSM on long term

rentals). Total annual value $181,000.

16 . • K_also provided a letter from the Respondent's counsel which

attached documents that the Respondent intended to rely on in the small claims

action against.K_. The documents were titled "Executive Property

Management - Owner Statement". These Owner Statements identify rent

received; security deposits paid; and deductions for operating expenses. The

operating expenses include a management fee and a placement fee (identified

as being 25% of full rent). The dates on these statements range from December

2010 to April 2011.

17. As at June 22, 2011, a website identified as a site operated by EPM (the "EPM

Website") listed the following services provided by EPM:

a) Collect security deposits and rents and deposit rents into trust account;

b) Deposit security deposit and net rents to owner-rent minus fee and/or

minor materials and repair bills;

c) Handle all inquiries reported by tenants and provide owner with monthly

report on issues reported by tenants;

d) Provide monthly financial summary to owners by the 15th of the month;

e) Available by cell phone between hours of 8 am and 8 pm every day;

f) Monthly property perimeter check:

g) Upon move-in of new tenants, complete a condition inspection report

noting any deficiencies or problems of the unit;

h) Upon move-out perform a condition inspection report with the tenant to

ensure that all is in order before the security deposit is returned to the

tenant upon end of tenancy;

i) Advertise and arrange showings;

j) Collect personal information of interested parties;

8

k) Complete background checks on suitable candidates; and

I) Provide owners with shortlist of suitable candidates to select from.

18. The EPM Website also indicated that EPM "is a privately owned and managed

company run by [the Respondent] out of Royal Lepage Downtown Realty

offices. We offer property management services to residential and commercial

property owners throughout the North Okanagan." It should be noted that the

Respondent no longer had a license to provide rental property management

services on behalf of Royal Lepage as at June 22, 2011 as his license lapsed

on June 15, 2011.

19. A search of the EPM Website on September 7, 2011 revealed that EPM was

still advertising its services, including the following:

a) Actively advertise and market rental property according to owner's

needs;

b) Provide owner with shortlist and background information in order for

owner to select suitable tenant;

c) Assist renters with monthly owner payments, ensuring money is

received by owners in full and on time and appropriate action is taken if

not;

d) Upon move-in of tenants, complete an inspection of the property noting

any deficiencies or problems; and

e) Upon move-out perform an inspection of the property with the tenant

and forward to owner for appropriate response.

20. A further search of the EPM Website on March 29,2012 revealed the following

in the services portion of the website:

No more than 10% of rents irrespective of size of property. We charge a

flat rate according to complexity of the property. $125.00 for single

family properties and $50 per unit for multiple family properties.

9

We also take pride in our placement of a tenant. We would not offer a

tenant for an investor's property that we would not place in one of our

own, Furthermore we guarantee that the tenant will stay for at least 6

months or else we will not charge you for finding another tenant. Unlike

other management companies whose business model is based on

tenant churn and taking as much as 50% of the 1 st months' rent as a

placement fee we only ask for 25%,

21, The EPM Website also included a form called an Application for Tenancy which

included the following requested information from rental applicants:

a) Name, phone number, date of birth, social insurance number, driver's

license number, pets, current and historical addresses, current and

historical employment information, questions on possible previous

criminal offences, evictions and bankruptcies;

b) The application requires your signature and permission to pull credit

report and criminal record check; and

c) Where did the applicant hear about the property (tick all that apply) and

your options are: Newspaper, Castanet, Craigslist, Kijiji, Other Internet

and website www.execpm.com. (It should be noted that this website

address is the EPM Website address),

22, A search of the EPM Website on August 20,2012 showed that it continued to

display the aforementioned information regarding the services it provided along

with the same Application for Tenancy form,

23, In 2012 and 2013, the EPM Website included a tab for rentals, The tab would

redirect the user to a new page called PlanetRent Residential or Vacation and

included information on a number of residential properties available for rent in

Vernon, British Columbia and surrounding areas,

24, The vast majority of the residential properties advertised for rent through EPM's

Website during the period from 2012 to 2013 were advertised through the

website on behalf of the owners of those units and included units in various

10

locations in Vernon, British Columbia. The advertised units included units which

were not owned by the Respondent or EPM.

25. On or about March 6, 2013, _~, an investigative officer with the

Superintendent using the pseudonym communicated with the

Respondent through the contact number and email displayed on the EPM

Website .• P_ acting stated that she and her husband

.were looking for some prices and information regarding property

management services for a residential property located on Old Kamloops Road

in Vernon, B.C.

26. On the same day the Respondent made the following statements regarding

himself and EPM by email in response to the communication by. p.: a) He was the owner and operator of EPM;

b) EPM provides its clients with an efficient solution to its clients' real

estate management needs, including, purchasing, selling, renting,

leasing or investing;

c) The efficiency has been created through his experience as an investor

and a previously licensed property manager;

d) Some of the key distinctions of EPM as identified by the Respondent

were as follows:

L They make extensive use of technology from digital condition

inspection reports using the latest tablet technology to providing

owners with user id and password to access their internet based

remote management software;

ii. The aforementioned system consolidates all relevant property and

tenant information including rents received, service requests and

financial statements allowing for owners to access it as and when

they need it from anywhere on the planet;

11

iii. They implement rental contracts between the owner and the

tenant paying the rents direct into the owners account every

month. Thereby allowing the owner to receive rents on the 1st day

of the month not the 15th or later as most other property

management companies;

iv. They charge according to the effort required and not by the

amount the property rents for. Their rates are a fixed monthly flat

fee or 10% of the gross rents, whichever is the LEAST when the

property is tenanted;

v. They as investors pride themselves on finding the right tenant;

vi. They do this using their own website www.planetrent.ca to publish

all vacant units for their members and then on a regular (weekly)

basis these are 'pushed' out onto internet bulletin boards -

specifically Kijiji and Craigslist where they get their most

responses and for that service they charge a one off placement

fee of 25% of the first month rent;

vii. They also provide the following guarantee, they would never place

a tenant in a customer property that they would not place in one of

their own and as a result of this approach they can confidently

offer a 6 months guarantee on placements, and more specifically,

if a tenant leaves within the 6 months of them placing them in the

unit they will find a replacement at no additional cost;

viii. Their contracts can be terminated at any time, by either party for

any reason simply by giving 30 days' notice; and

ix. There are no termination fees.

27. An unexecuted property management agreement between EPM and a potential

owner as at March 6, 2013 was attached to the Respondent's email

correspondence with. p. The draft agreement contained the following

clauses:

12

Responsibilities of Bateleur Properties Inc.

Bateleur Properties Inc. agrees to market the subject property in

accordance with the Schedule of Services (Appendix II) attached hereto

and accordance the policies in the Schedule of Terms (Appendix V).

Bateleur Properties Inc. will endeavour to promote and coordinate on

behalf of the Owner and to the best of their abilities all issues related to the

operation of the Property.

Bateleur Properties Inc. agrees to payout, directly by cheque, upon the

direction of the owner to any 3,d party contracted by the owner less a 10%

service fee.

The Owners Responsibilities

The owner agrees to pay Bateleur Properties Inc. within 7 days of invoice

by Internet payment or direct deposit the monthly contract fee as noted in

this contract.

The Owner agrees to allow Bateleur Properties Inc. to market and

maintain this property as described in this contract.

The Owner shall perform and carry out all the provisions and conditions

set out in the Schedule of Owner's Responsibilities (Appendix III).

The Owner is to maintain their own full liability insurance that adequately

covers the herein contemplated rental of the Property.

Term

The Agreement shall commence upon the date of execution of this

Agreement and shall end one year from that date to be automatically

renewed unless terminated by either party at any time.

13

Appendix II

- Provide remote management system access as per the terms of this

contract;

- Provide remote system access including user id and password as well

as basic instructions for owners to monitor their property;

- Actively advertise and market the rental property according to the

Property Profile (Appendix I);

- Ensure all applicants qualify according to the owner specified property

target group;

- Provide owner with shortlist and background information in order for

owner to select suitable tenant;

- Be available to handle and record owner and tenant concerns and

questions;

- Oversee the appropriate maintenance services for the upkeep of the

property as instructed by the owner;

Assist renter with monthly payments to owners. Ensuring money is

received on time and suitable action is taken if not;

- Upon move-in of new renter, complete an inspection of the property

noting any deficiencies or problems;

- Record all inquiries reported by renters and upon owners approval

proceed with coordinating necessary response;

- Provide emergency contract procedures for renters. Be available to

owners between the hours of 6 am and 10 pm every day;

Perform monthly perimeter check; and

- Upon move-out perform an inspection of the property with the renter

and forward to owner for appropriate response.

14

Appendix V Schedule of Terms

Contract Fee

Members Monthly System Access Fee (please select one)

Single family property $125.00 per month or 10% of the gross rents

whichever is the least;

- Multifamily (more than 3 units under the same contract) $50.00 per

month; and

- Apartment/condo $50,00 per month.

In addition to the above the owner will also pay a one-off placement fee of

25% of the 1 S, months' rent for each new tenant introduced by Bateleur

Properties Inc. provided the tenant is longer than 6 months

Non-Members Placement Fee

For the advertising, showing, qualifying and completion of all rental

documents including a move-in inspection the owner will pay a one off

placement fee of 50% of the 1st months' rent for a tenant introduced by

Bateleur Properties.

Terms of Payout

And the terms of payment will completed by the ih of every month by

Intemet payment to ian@excpm.com.

28. On May 15,2013 the Respondent provided the following information by

telephone to. p.: a) Bateleur is his company;

b) Bateleur does business as EPM and has beeen doing business as EPM

for approximately four (4) years;

c) Bateleur has two employees, himself and _ H_; d). H_ does the administration for the company and fields calls;

15

e) EPM charges property owners a monthly membership fee which covers

help desk services and all other services noted in the contract between

EPM and the property owner;

f) EPM passes documents and contracts between tenant & landlord, they

take calls on listings and answer questions on properties;

g) EPM has an additional separate package for finding and placing tenants

with non-membership clients for a fee of 25% of one month's rent;

h) has no association with any unlicensed entity;

and

i) He was a licensed property manager for two years and is very aware of

the RESA and what is required,

29, During. p.'s telephone call with the Respondent on May 15, 2013 she

requested a copy of the EPM contract for the provision of rental property

management services to residential property owners, On May 16, 2013 a copy

of an EPM contract was provided to • P_ by the Respondent The

contract was identical to the contract provided by the Respondent on March 6,

2013 save and except four of the bullets on the "Schedule of Services"

Appendix II had been removed from the May 16, 2013 version:

- Actively advertise and market the rental property according to the

Property Profile (Appendix I);

- Ensure all applicants qualify according to the owner specified property

target group;

Provide owner with shortlist and background information in order for

owner to select suitable tenant; and

- Oversee the appropriate maintenance services for the upkeep of the

property as instructed by the owner.

In addition to the Agreed Statement of Facts entered as an exhibit at the

commencement of the Hearing, viva voce evidence was tendered by the Staff, The first

16

witness was. K __ K_ had made a complaint to the REeBe alleging

that the Respondent was engaged in unlicensed activity.

The relevant testimony of. K_is as follows:

• He was the managing broker at

relevant time;

at the

• He was involved in the S_ a combination hotel and residence, as a

licensed Strata Property Manager until December 2011;

• He became aware of the Respondent and EPM as a result of the

Respondent having contracted to manage 13 to 15 units under long

term rental contracts with some of the owners of individual units at the

~;

• He contacted the Respondent by email and introduced himself. He

suggested that he and the Respondent get together to discuss the role

the Respondent had at the ~;

• He met with the Respondent who introduced himself as EPM;

• He was expecting to meet. T_, the managing broker of Royal

Lepage, at the same time he met with the Respondent;

• When. ~ did not attend the meeting, he called the REeBe

and confirmed EPM was not licensed to provide rental property

management services;

• He requested that the Respondent provide him with copies of the

contracts for all the units in the ~ the Respondent was managing.

The Respondent did not provide him with any of the requested

contracts;

• The Respondent requested keys to the building from him. He would not

provide keys to the build ing without authorization;

17

• The Respondent filed a small claims action against him alleging

interference with contractual relations because he would not provide

access to the building;

• In early 2013 he was contacted by _ W.who was a friend of

his .• ~told him that his girlfriend, _ C_, was a tenant

in a suite managed by the Respondent.. W_ informed him that • C_ had filed a small claims action against the Respondent

among others in relation to her tenancy; and

• In cross-examination, he testified that his contract with the ~ was

terminated because his company got into a conflict with the Strata

Council on the operation of the facility .

• P_was also called by the Staff to give viva voce evidence. The relevant

portions of her evidence are as follows:

• She is employed by the Financial Institutions Commission as an

investigator for the Superintendent;

• She was one of the primary investigators in the investigation of the

Respondent and EPM;

• The initial complaint came in on June 21, 2011 from the RECSC;

• She had conversations with the Respondent in which she solicited

information from him and about his company;

• She prepared an Investigation Report which was made an exhibit in the

Hearing;

• She conducted a search of the EPM Website on February 19, 2014 and

printed out screen shots of that website which were then entered as an

exhibit in the Hearing. A copy of this exhibit was provided to the

Respondent on the morning of the Hearing;

18

• She testified that the information contained on the EPM Website was

similar to that she had seen on previous occasions when searching the

website;

• On the EPM Website was a page titled "Services". On that page it

stated that two key factors differentiate EPM from other property

management companies: 1) EPM is not a property management

company; and 2) EPM does not make use of licensed property

managers. The same page contained testimonials from some

purported clients;

• Different properties for rent can be accessed through the EPM Website

on a page called "Planetrent";

• She confirmed that the telephone number on the EPM Website was the

same number she reached the Respondent on;

• She received a complaint against the Respondent from _ C_ through her boyfriend _W_;

• She received a copy of a cheque dated December 1,2012 made

payable to EPM in the amount of $1,500.00. The memo line indicated

that the cheque was "Rent for December . A copy of

this cheque was given to the Respondent on the morning of the hearing.

The Respondent was asked if he objected to making the cheque an

exhibit and he indicated he had no objection. The cheque was then

made an exhibit in the Hearing;

• The back of the cheque indicated it was deposited to the credit of EPM

on December 1, 2012;

• She conducted an online search of EPM and located a Notice of Claim

filed on March 6, 2013 by. ~in respect of her rental at

The Notice of Claim was marked as an exhibit in the

Hearing;

19

• The Notice of Claim contained allegations against the Respondent with

respect to his management of the suite.C had rented. _

C was not called to give evidence in the Hearing so the evidential

value of her hearsay statements contained therein is limited. That said,

the Respondent was cross-examined on some of the material in the

Notice of Claim and his evidence thereon will be canvassed below;

• She gave evidence with respect to a certificate of costs which was part

of Exhibit #1. The certificate indicated those 88.75 hours were spent

investigating the allegations against the Respondent. The Staff claims

investigation costs at $100 per hour for a total of $8,875.00. The

Respondent does not take issue with the amount of hours spent on the

investigation but does take issue with the hourly rate of $100 per hour. I

note that pursuant to section 4.4 of the Real Estate Services

Regulation, $100 per hour is the maximum amount that the

Superintendent may order an unlicensed person to pay for investigation

costs; · • p. was cross-examined by the Respondent She agreed that

the complaint she received was forwarded from the RECBC, which

forwarded the complaint from. K_;

• She was cross-examined on her Investigation Report as to the

sequence of complaints against the Respondent. The first complaint

was forwarded to the Superintendent from the RECBC. As a result of

that complaint, legal counsel for the Superintendent sent a letter to the

Respondent dated August 17, 2011 notifying him of the complaint and

asking the Respondent to cease any unlicensed activity until he was

licensed; and

• She testified that the second complaint was by. ~and a third

complaint was from a _ K_ •• 's complaint was that the Respondent was conducting

unlicensed real estate services.

20

The Respondent testified on his own behalf and on behalf of EPM, The following is a

synopsis of his relevant testimony, The Respondent testified that:

• All information requested by the Staff in its investigation was freely

provided by him and that all the documents he disclosed were in the

public domain, He indicated that he was not hiding nor attempting to

hide anything and that he cooperated with all requests of the Staff;

• During the period he was licensed to provide rental property

management services on behalf of Realty Executives he entered into

property management agreements through EPM;

• No member of the public has complained, The complaints all came from

his competitors;

• It's clearly stated on the EPM Website that he doesn't make use of

licenced property managers nor does his company do unlicensed real

estate activity;

• Services he provided included the collection and delivery of information

which allowed his clients to make the best decision regarding their

property;

• All the information he provided to his clients is in the public domain;

• The investigation against him started in September 2010 after he filed a

complaint against ~;

• The RECBC investigation concluded in 2011 after the complaint was

forwarded to the Superintendent;

• There was a small claims action against. K which proceeded

to trial in 2012, The Respondent was successful in his claim against.

~;

• On August 17, 2012 a third complaint was filed against him by

_ K.who was a Kelowna strata manager, •• took

over the role that .K_ had at the ~;

21

• •• wasfrom he took over the

strata counsel management contract from. K_;

• Complaint #4 came from. C_ and .~. The Respondent

indicated that. ~ is an associate of. K_ and that they

are "coffee buddies";

• It seems to the Respondent that he's here not so much in regards to the

protection of the public but to protect the interests of. K_; • He was a licenced rental property manager from June 2009 until 2011 ;

• It appeared that a lot of the allegations seemed to cover the time period

when he was licenced as well as the time period he wasn't. It was

important to separate the activity before June 2011 when his licenced

lapsed;

• In June of 2009 he looked for various brokerages to offer his services to

and settled on Realty Executives run by • ~

• • ~wanted someone to take over the rental property

management for her brokerage The Respondent assisted her in setting

up a website. The Respondent entered as an exhibit a screen shot of a

website titled "Shop in Kelowna" which had EPM listed under "Property

Management", Under EPM's name, phone number and a link to visit

EPM's website, there was the following paragraph: '. M_ is a

licensed property manager who specializes in quality tenant placement,

property inspection, full operation of rental and vacation referrals". This

screen shot was apparently taken on February 4, 2014;

• EPM worked with the property manager. M_during the

Respondent's time at Realty Executives;

• He was operating EPM prior to June 2009;

• The Respondent then entered an email that was purportedly sent by

him to_ and _~on September 2, 2009. In that

22

email the Respondent indicates that "I would not want to be operating in

conflict of any rules or laws and as I realize _ is extremely busy at

the moment it would be great if you could piece together some type of

agreement using the points and the attached email in order to formalize

the relationship". The attached email referred to was not produced into

evidence;

• It wasn't until the Respondent left. W_ and Realty Executives

that he took the documents in his possession to. ~ of Royal

Lepage to give to his legal team;

• This was who he was working with when he came into conflict with the

RECBC;

• During the term of his licence he took no payments for rental property

management. All the pcwments were made to the brokerage and the

brokerage paid the Respondent for his services;

• After June 15, 2011 he let his licence for rental property management

services lapse;

• He hasn't provided real estate services since his license lapsed; and

• He disagreed with some of .C_'s statements in the Notice of

Claim she filed against him. As I find little evidential value in the

statements contained in that Notice of Claim, I do not make any findings

of fact with respect to the statements contained therein unless

specifically admitted to by the Respondent.

The Respondent was cross-examined by counsel for the Staff. The following is relevant

evidence gleaned from that cross-examination:

• The Respondent denied that any complaints were lodged against him

by his clients. He explained that. C_, who did in fact lodge a

complaint against him and EPM, was not a client, but that the owner of

the unit she rented from was;

23

• He was involved with the owners of. C_'s rental unit, but he

wouldn't say he was managing the property for them;

• He was cross examined on the Notice of Claim filed by. C •. He

indicated that the Reply contained therein was a joint response on

behalf of all of the Defendants including the Respondent and his

company EPM, the owners of the subject

property,

• He stated that the Reply was an accurate statement of what occurred.

One of the statements contained in the Reply attributable to the

Respondent is as follows: As the manager of Bateleur Properties Inc.

dba Executive Property Management a/l decisions regarding the

tenancy of the claimant were made by me in accordance with the rules,

policies and guidelines of the Residential Tenancy office and

Residential Tenancy Act;

• He agreed with the statement in the Reply that the claim that all rental

cheques were made payable to EPM was a false and misleading

statement;

• The Respondent was then taken to the copy of the cheque made

payable to EPM from. C •. The Respondent agreed that the

cheque was made payable to EPM. The Respondent agreed that the

cheque was made payable to his company and that it was deposited to

EPM and that the cheque was for rent;

• He stated that he didn't deposit the cheque but it was depOSited in his

company's bank account;

• The Respondent disagreed when it was put to him that he wasn't telling

the truth when he made the statement in the Reply that it was false and

misleading for the Claimant to include in her Notice of Claim that all

rental cheques were made payable to EPM;

24

• The Respondent said that when he made the statement in the Reply he

hadn't seen the cheque dated December 1, 2012. He agreed that he

filed his Reply after 2012;

• Given the fact that only one rent cheque payable to EPM was produced

in the Hearing, I cannot find that the statement contained in the Reply

was untrue. It may be that some rental cheques were made payable to

a different entity but there is no evidence on point in that regard;

• It was put to the Respondent that his testimony that the only complaints

he'd had were from his competition wasn't truthful. The Respondent

stated that he believed his statement was more along the lines that his

customers never complained;

• His evidence was that the complaints were lodged by his competitors.

He believes that was part of the evidence. He stated that he does not

believe that his statement in that regard was not truthful. However,. C. was not a competitor and the evidence is that she complained;

• He agreed that. C_ was a tenant in a property that was

managed by EPM;

• The Respondent was cross-examined further on. C.'s Notice of

Claim. He agreed that he and EPM were providing rental property

management services but not as that term is defined in the RESA;

• He disagreed with the statement that he and EPM prepared the contract for. C.'s unit and presented it to her. He stated that the

contracts were forwarded by the owner and not himself or EPM;

• He disagreed that he was acting as the agent for the landlord and that

he served the claimant with residentiallenancy documents. However,

he conceded that he delivered documents to.C. on behalf of

the owner;

25

• He stated that his role in managing. C.'s unit was the same as

all of the other relationships he had which was to transfer information he

compiled between the different parties;

• He confirmed that the aforementioned cheque from. ~ for her

December rent was a cheque received for the rent of her unit at

• He admitted that this cheque was deposited into EPM's account;

• He stated that from 2009 to 2011 he provided rental property

management services to clients through EPM, He indicated that he

provided his services to Reality Executives and later to Royal Lepage;

• Realty Executives was never licensed to do business as EPM;

• He agreed that he was the directing mind of EPM had been using the

name for a number of years since getting his licence;

• He was still operating the EPM Website after his license was transferred

from Realty Executives to Royal Lepage;

• He agreed that nowhere on the EPM Website did it indicate that EPM

was providing services on behalf of Royal Lepage;

• He agreed that when he spoke to the investigator. p. when she

was pretending to be _, she sought some assistance with

respect to real estate, He agreed that this was in 2013;

• He indicated that. P.wanted to purchase some investment

property;

• It was put to him that he told. P.that he would provide rental

property management services, He agreed with that;

• He stated that the contract he sent to • P.gave an indication of

what he and EPM could do, not necessarily what they would do for her;

26

• He disagreed that he provided • ~ with a contract for his

services. What he provided her was a template of the documents that

were used;

• It was put to the Respondent that he provided the template and the

agreement to. P.that EPM used to enter into contractual

relations with EPM's clients. He agreed;

• It was put to him that the contract template provided on EPM's Website

indicated the services that EPM could provide to a client. The

Respondent agreed;

• It was put to him that he carried out marketing of rental properties. The

Respondent agreed;

• He denied colleting rent or security deposits on behalf of the owners;

• The Respondent was then referred to the Real Estate Investment

Management Agreement for EPM which formed part of an exhibit in the

Hearing. Appendix II to that agreement listed a schedule of services

provided by EPM. Those services included actively advertising and

marketing the rental property; assisting renters with monthly payments

to owners; providing emergency contact procedures for renters; and

performing inspections of the rental property on move-out The

Respondent agreed that EPM provided those services to its clients;

• The Respondent agreed that EPM entered into the aforementioned

Real Estate Investment Management Agreements on a regular basis;

• He testified that in a given year EPM may have 15 or 20 clients;

• The Respondent testified that he did not receive any money from the

tenants, and that the tenants paid the owners directly. This statement is

belied by the fact of. C_'s rent cheque mentioned previously;

• The Respondent was then taken to an attachment to the Agreed

Statement of Facts which appeared to be two invoices from EPM for

27

rental property management services. The invoices are dated February

6,2011 and September 6,2010;

• The Respondent indicated that at the time of the 2011 invoice he was

licenced through Royal Lepage. He would have been licensed with

Realty Executives in relation to the invoice from 2010.

• He agreed that the invoices do no! refer to any licenced brokerage firm;

• He stated that during the time that he was licenced he operated under

EPM and provided services under. that name;

• He agreed that his licence lapsed on June 15, 2011. He stated that

there was no specific reason for letting his licence lapse;

• He agreed that there as a complaint outstanding against him at the time

when his licenced lapsed but that that wasn't the reason for letting it

lapse;

• It was suggested to him that he agreed with the RECSC that he would

let his licence lapse at that time as opposed to dealing with the

complaint. The Respondent indicated that he didn't recall that

conversation;

• The Respondent has made no efforts to reinstate his licence since it

lapsed;

• The Respondent was asked what if any changes he made to the

operation of EPM after he let his licence lapse. The Respondent

indicated that the changes made since the licence lapsed were that he

no longer collects rent or security deposits. He also stays away from

signing contracts. The owners contract now directly with the third party

tenants;

• The Respondent indicates that he no longer shows the properties;

• The Respondent was then taken to a screen shot of the EPM Website

as at June 22, 2011. This would have been shortly after the

28

Respondent's licence lapsed. The Respondent agreed that this was a

screen shot of the EPM Website as at that date;

• He was taken to the screen shot titled "Management Services and

Fees". This screen advertises a number of services, including collecting

security deposits and rents;

• He was then taken to a screen shot of the EPM Website as at

September 7, 2011. Again, a number of services are advertised by

EPM. It was put to him that the EPM Website had been continued in

the same fashion up to the present. The Respondent agreed;

• The Respondent disagreed that he picked up rents for tenants and said

that he didn't collect rents from the tenants; and

• He agreed that he attended and served. C_ with a one month

notice to end tenancy for cause but he couldn't be sure of the date.

The Respondent was asked if he wished to expand on or clarify any of the answers he

gave in cross examination. He wished to address the cheque from. C_that was

entered as an exhibit. He indicated that the first time he had an opportunity to see it was

at the hearing. He indicated that the process was that he didn't accept rent cheques

and was unsure as to how this cheque was given to his company and deposited.

That concluded the eVidence tendered in this matter.

The Applicable Legislation

The sections of the RESA relevant to the matter at hand are reproduced below:

Definitions

1 In this Act:

"associate broker" means a person licensed as an associate broker;

"brokerage" means a person licensed as a brokerage;

"engaged", in relation to a brokerage, means a person who is

29

a) a licensee employed by a brokerage to provide real estate services on

its behalf; or

b) a licensee who is acting in an independent contractor relationship with

the brokerage to provide real estate services on its behalf.

"managing broker" means a person licensed as a managing broker;

"providing", in relation to real estate services, includes

a) offering to provide such services;

b) holding oneself out as a person who provides such services; or

c) soliciting for the purposes of the provision of such services.

"real estate services" means

a) rental property management services;

b) strata management services; or

c) trading services.

"remuneration" includes any form of remuneration, including any commission,

fee, gain or reward, whether the remuneration is received, or is to be received,

directly or indirectly;

"rental property management services" means any of the following services

provided to or on behalf of an owner of rental real estate

a) trading services in relation to the rental of real estate;

b) col/ecting rents or security deposits for the use of the real estate; or

c) managing the real estate on behalf of the owner by

i. making payments to third parties;

ii. negotiating or entering into contracts;

iii. supervising employees or contractors hired or engaged by the

owner; or

iv. managing landlord and tenant matters.

But does not include an activity excluded by regulation.

30

"rental real estate" means real estate that is or is intended to be rented or

leased; ...

"trading services" means any of the following services provided to or on behalf

of a party to a trade in real estate

a) advising on the appropriate price for real estate;

b) making representations about real estate;

c) finding the real estate for a party to acquire;

d) finding a party to acquire the real estate;

e) showing the real estate;

f) negotiating the price of the real estate or the terms of the trade in real

estate;

g) presenting offers to dispose of or acquire the real estate; or

h) receiving deposit money paid in respect of the real estate.

But does not include an activity excluded by regulation.

Application of Act

2(1) This Act applies to every person who provides real estate services to or on

behalf of another for or in expectation of remuneration ...

3(1) A person must not provide real estate services to oron behalf of another,

for or in expectation of remuneration, unless the person is

a) Licensed under this Part to provide those real estate services; or

b) Exempted by subsection (3) or the regulations from the requirement to

be licensed under this Part in relation to the provision of those real

estate services ...

5(1) The license levels under this Part are as follows

a) brokerage, being a licensee on behalf of which other licensees must

provide real estate services;

31

b) managing broker, being a licensee responsible for a brokerage as

provided in section 6;

c) associate broker, being a licensee who meets educational and

experience requirements to be a managing broker, but is providing real

estate services under the supervision of a managing broker; and

d) representative, being a licensee providing real estate services under the

supervision of a managing broker ...

44 (1) A discipline committee may, by an order under section 43 (2) (h)

(recovery of enforcement expenses1, require the licensee to pay the expenses,

or part of the expenses, incurred by the RECBC in relation to either or both of

the investigation and the discipline hearing to which the order relates.

(2) Amounts ordered as referred to in subsection (1)

a) must not exceed the applicable limit prescribed by regulation in relation

to the type of expenses to which they relate; and

b) may include the remuneration expenses incurred in relation to

employees, officers or agents of the RECBC, or members of the

discipline committee, engaged in the investigation or discipline hearing.

49 (1) This section applies if, after a hearing under section 48 (2)

[superintendent hearings], the superintendent determines that the person

subject to the hearing did not hold a licence under this Act at a time when the

person engaged in any activity for which such a licence was required.

(2) The superintendent may, by order, do one or more of the following with

respect to a person referred to in subsection (1):

a) Require the person to cease the activity;

b) Require the person to carry out specified actions that the

superintendent considers necessary to remedy the situation;

c) Require the person to pay amounts in accordance with section 44 (1)

and (2) [recovery of enforcement expenses);

32

d) Require the person to pay a penalty in the amount of

i. not more than $20,000, in the case of a corporation or partnership; or

ii. not more than $10,000, in the case of an individual. ..

Analysis and Findings

The RESA regulates professionals involved in the provision of real estate services. It

has as its primary role the protection of the public and the maintenance of public

confidence in the real estate services industry. The legislative framework provided by

RESA is similar in this regard to other legislation governing the financial services

industry in British Columbia, including legislation governing mortgage brokers. The

Supreme Court of Canada made the following statements regarding the legislative

scheme governing rnortgage brokers in Cooper v. Hobart: 1

The regulatory scheme governing mortgage brokers provides a general

framework to ensure the efficient operation of the mortgage marketplace. The

Registrar must balance a myriad of competing interests, ensuring that the

public has access to capital through mortgage financing while at the same

time instilling public confidence in the system by determining who is "suitable"

and whose proposed registration as a broker is "not objectionable". All of the

powers or tools conferred by the Act on the Registrar are necessary to

undertake this delicate balancing. Even though to some degree the

provisions of the Act serve to protect the interests of investors, the overall

scheme of the Act mandates that the Registrar's duty of care is not owed to

investors exclusively but to the public as a whole.

!n the normal course, complaints against parties that are licensed pursuant to the RESA

are dealt with by the RECBC. That said, the RESA authorizes the Superintendent to

conduct investigations and hearings to determine whether a person who is not licensed

under the RESA has engaged in activity for which a license is required. This is what

occu rred in the matter at hand.

1 2001 see 79 at para. 49.

33

The allegations against the Respondent and EPM cover two distinct periods of time: the

first between June 16, 2009 and June 15, 2011 during which time the Respondent was

licensed to provide rental property management services first with Realty Executives

and subsequently with Royal Lepage; and the second between June 16, 2011 and

February 20, 2014 during which time the Respondent was not licensed under the

RESA

During the time in which the Respondent was licensed under the RESA, it is important

to note that EPM was not licensed.

Attached to the Agreed Statement of Facts were eight executed rental property

management agreements between EPM and various owners of rental properties in a

strata building called the •. These contracts were all dated between June 16, 2009

and June 15, 2011.

These agreements evidenced the fact that EPM, an unlicensed entity, was contracting

with the owners of the subject property to, among other things, collect all rents; collect

security deposits; advertise the property and arrange showings; and handle all inquiries

reported by tenants.

These agreements also evidenced the fact that EPM was providing the aforesaid

services for remuneration which included 10% of gross collected rents and a placement

fee of between 10% and 25%. The Respondent admitted these contracts were entered

into between the owners of units in the S.and EPM.

These agreements eVidence the fact the EPM was in fact providing Real Estate

Services as that term is defined under the FIESA and specifically rental property

management services to the owners identified in the aforementioned agreements at the

times indicated on those agreements.

These agreements also evidence the fact that EPM was providing those services for or

in expectation of remuneration without being licensed under the RESA The

Respondent did not claim that EPM was exempted under section 3(b) of the RESA or

34

under the regulations and I find that EPM was not exempted from requiring a license to

provide Real Estate Services.

I therefore make the finding that EPM did not hold a license under the RESA at a time

when EPM engaged in activity for which such a license was required.

The Respondent was at all material times the directing mind of EPM. Although he held a

license during this period to provide rental property management services with both

Realty Executives and Royal lepage, he was also providing rental property

management services on behalf of EPM, an unlicensed entity. He was not licensed to

do so. I therefore find that the Respondent was providing Real Estate Services on

behalf of another, EPM, during the period from June 16, 2009 to June 15, 2011 without

being licensed under the RESA to do so.

The second time period under consideration was from June 16, 2011 until February 20,

2014. During this period of time both the Respondent and EPM were not licensed under

the RESA.

The Respondent testified that since his license lapsed, he had made certain changes to

the manner in which he conducted EPM's business. He testified that he made those

changes to ensure he was in compliance with the RESA and any other applicable

legislation. Unfortunately for the Respondent, the changes he made to the practises of

EPM did not have the desired effect.

The Respondent testified that he no longer collected rent or security deposits and that

he no longer showed properties to potential tenants after his license lapsed. However,

the rent cheque from _C_ payable to EPM dated December 1,2012 and

deposited to the credit of EPM clearly shows that during the period after the

Respondent's license lapsed EPM collected at least one rental payment for the use of

the real estate.

In addition to collecting rents, it is clear that throughout this period EPM was providing

trading services in relation to the rental of real estate. The screen shots of the EPM

Website entered as exhibits in the Hearing that evidenced EPM's Website as at June

35

22, 2011; September 7, 2011; August 20, 2012; February 19, 2013; February 11, 2012;

and February 19, 2014 clearly show that EPM was in fact advertising on the appropriate

price for the real estate (see the Planetrent page linked to EPM's Website); making

representations about the real estate; and finding a party to acquire the real estate .

• p., posing as __ , had direct communication with the Respondent,

who was acting on behalf of EPM. The Respondent sent.p. a form entitled

"Real Estate Investment Management Agreement". This agreement attached five

appendices which included a property profile; a schedule of services provided by EPM;

a schedule of the owner's responsibilities; property maintenance information; and a

schedule of terms.

The Respondent disagreed that this form evinced a contract for his services. He

explained that this form was basically a template of the documents that were used. I

find, however, that this is a distinction without a difference.

The Respondent agreed that the form sent to. P.was the form used by EPM to

evidence agreements made by EPM with its client owners. I therefore find that the

Respondent and EPM were in fact using this "template" agreement to evidence the

contractual relationship between EPM and its owner clients. The agreement makes

abundantly clear that EPM was providing services to owners of rental property for

remuneration.

Rental property management services, as that term is defined in the RESA, includes: c)

managing the real estate on behalf of the owner by i) making payments to third parties;

ii) negotiating or entering into contracts; iii) supervising employees or contractors hired

or engaged by the owner; or iv) managing landlord and tenant matters.

The draft or "template" agreement forwarded to. p. by the Respondent states

that "Bateleur Properties Inc. agrees to payout, directly by cheque, upon the direction of

the owner to any 3rd party contracted by the owner less a 10% service fee." Clearly

EPM was managing real estate on behalf of its owner clients by making payments to

third parties.

36

Appendix II attached to the draft agreement sent to. P.lists the services

provided by EPM. Included in those services listed is that EPM will "actively advertise

and market the rental property according to the Property Profile (Appendix I)." This

stated service, when viewed in conjunction with the EPM Website, falls within the

definition of trading services as that term is defined in the RESA.

Appendix II also lists the following service: "Oversee the appropriate maintenance

services for the upkeep of the property as instructed by the owner." I therefore find that

EPM was managing real estate on behalf of the owner by "supervising employees or

contractors hired or engaged by the owner." Again, this is a rental property

management service as that term is defined under the RESA.

Appendix II also states that EPM will "record all inquiries reported by renters and upon

owner's approval proceed with coordinating necessary response." I find this clause

evidences the fact that EPM was managing real estate on behalf of owners by

managing landlord and tenant matters. Again, this is a rental property management

service as that term is defined under the RESA.

Finally, Appendix II stipulates that EPM will "assist renter with monthly payments to

owners. Ensuring money is received on time and suitable action is taken if not." It is

difficult to ascertain the meaning of this clause and I suspect the wording was chosen to

avoid stating in the contract that EPM was collecting rents. However,. C_'s rent

cheque for December 2012 made payable to EPM evidences the fact that on at least

one occasion during this period, EPM did collect rent on behalf of an owner of rental

real estate.

Based on the evidence presented at the hearing, some of which was canvassed above

and which I find was clear and convincing, I find on a balance of probabilities that EPM

was providing real estate services as that term is defined under the RESA without being

licensed for the period from June 16, 2011 up to and including February 19, 2014. As

the directing mind of EPM, I find that the Respondent was providing real estate services

as that term is defined under the RESA on behalf of EPM without being licensed for the

period from June 16, 2011 up to and including February 19, 2014.

37

Having found that the Respondent and EPM did not hold a license under the RESA at a

time when the Respondent and EPM engaged in activity for which such a license was

required, I tum my attention to the appropriate Orders to make under the circumstances

of this case.

Orders

The Staff submits that it would be appropriate under the circumstances to make the

following Orders:

• That the Respondent and EPM cease providing rental property

management services without being licensed to do so under the RESA;

• That the Respondent and EPM cease advertising and offering, or

otherwise providing, rental property management services without being

licensed to do so under the RESA;

• That the Respondent and EPM place any rent payments, security deposits

or other trust monies, which they hold in respect of the provision of real

estate services without being licensed to do so under the RESA, in trust in

British Columbia with a practising lawyer or notary public or a licensed real

estate brokerage;

• That the Respondent pay a penalty in the amount of $8,500;

• That EPM pay a penalty in the amount $17,000; and

• That the Respondent and EPM pay the expenses of the investigation and

hearing.

I adopt the language of the Superintendent in the Matter of the Real Estate Services Act

and Bentrott et aiwhich was rendered on June 26, 2013 wherein the Superintendent

found:

The RESA, sections 49(1) and 49(2) (c) and (d) (if), provide the Superintendent broad discretion to make orders against an unlicensed individual who has carried out real estate service activities, including requiring such a person to pay a penalty of up to $10, 000 and recovery of enforcement expenses. The discretion does not require any orders to be made and the case law notes that orders should be reasonable and made after consideration of both aggravating and mitigating factors in the case ...

38

Orders should be both protective and preventative. They should be aimed first and foremost at achieving compliance and secondly at deterring repeat offences by the subject specifically, and more generally by others in the industry or considering entering the industry.

Penalties must be reasonable and proportionate to the offence. Therefore the context surrounding the breach of the statute, including the nature of the conduct by the wrongdoers should be considered.

The Respondent was licensed to provide rental property management services to

Realty Executives and Royal Lepage from June 16, 2009 until June 15,2011. Although

there were complaints filed against the Respondent and EPM during that period of time

with the REeSe, the REeBe did not sanction either the Respondent or EPM during the

period he was licensed. This is the first time that the Respondent and EPM have been

found to have been engaged in unlicensed activity. I find that this is a mitigating factor in

that both the Respondent and EPM are basically first offenders.

I find that the Respondent has been aware since he was licensed that complaints had

been made alleging that he and EPM were conducting unlicensed activity. The

Respondent testified that he made changes to the way that he and EPM operated in an

attempt to address those complaints. While the Respondent and EPM may have

attempted to come into compliance with the RESA. they ultimately failed in that attempt.

However, I cannot find that the fact of previous complaints known to the Respondent

and EPM is an aggravating factor. Neither is it a mitigating factor.

I do find as an aggravating factor the fact that the Respondent and EPM's unlicensed

activity has continued for an extended period of lime, since late 2010. However, given

that neither the Respondent nor EPM has been sanctioned in the past for this activity, I

do not place a great deal of weight on this factor.

I accept the testimony of the Respondent wherein he stated that none of the complaints

made against him were from his clients. Although. e., a tenant in one of the

properties he was managing, complained, she was not a client of the Respondent, the

owner of the property was. While I find this to be a mitigating factor, it must be

remembered that the purpose of the RESA is to protect the public, not just the owners

39

of the rental property. I therefore do not afford this mitigating factor a great deal of

weight.

I also accept the testimony of the Respondent that he cooperated with the Staff in its

investigation of his activities. That an extensive Agreed Statement of Facts was entered

into by the Respondent is proof of that assertion. I accept this as a mitigating factor.

The main objectives in making the following Orders are to specifically deter the

Respondent and EPM from engaging in unlicensed activity in the future and to deter

likeminded individuals from engaging in similar activities. The protection of the public

will be best served in the circumstances of this case by addressing those two factors.

Section 49(2) (d) of the RESA gives the Superintendent the discretion to order a person

found to have contravened section 3 of the RESA to pay a penalty in the amount of not

more than $20,000 in the case of a corporation or not more than $10,000 in the case of

an individual.

In this case I have settled on a penalty that I feel addresses the objectives of specific

and general deterrence without being overly punitive given that this is the first time that

either the Respondent or EPM have been found to have contravened the RESA.

Section 49(2) (c) of the RESA gives the Superintendent the discretion to order a person

to pay the expenses of the investigation and the expenses of the hearing. The

Respondent did not take issue with the amount of hours spent in investigating this

matter but did take issue with the rate of $100 an hour sought by the Staff. I note that

the rate of $100 per hour is the rate allowed by regulation and I therefore will order

costs of the investigation as set out in the Certificate of Costs attached to Exhibit #1.

That said, I will not order that the Respondent or EPM to pay the expenses of the

Hearing. I refuse to exercise my discretion in that regard for two reasons. The first

reason being that the Respondent cooperated with the Staff in its investigation and

entered into an extensive Agreed Statement of Facts which likely reduced the amount of

time required for the Hearing considerably.

40

The second and more important reason for not ordering the Respondent and EPM to

pay the expenses of the Hearing is that important evidence relied on by the Staff was

only disclosed to the Respondent on the morning of the Hearing. This evidence

consisted of the rent cheque paid by.C_to EPM on December 1, 2012 and the

screen shots of the EPM Website taken on February 19, 2014. Had that evidence been

disclosed in a timely manner the Respondent may have changed his position on

whether to exercise his opportunity to be heard.

While this late disclosure had the potential to impact the fairness of the Hearing, I find

that in fact it did not. I specifically asked the Respondent if he had any objection to the

documents in question being tendered as exhibits in the Hearing and he did not. If he

had any objections, I would have likely granted an adjournment of the Hearing to give

the Respondent time to respond to the evidence. That said, given the nature of the

documents and the other evidence tendered at the Hearing, an adjournment would not

have altered the outcome of this Hearing.

I make the following Orders against the Respondent and EPM:

1. That Ian Hayden Murphy and Bateleur Properties Inc. immediately cease

providing real estate services as that term is defined under the RESA and more

specifically, cease providing rental property management services.

2. That Ian Hayden Murphy and Bateleur Properties Inc. within five days of service

of this Order, place any rent payments, security deposits or other trust monies,

which they hold in respect of the provision of real estate services without being

licensed to do so under the RESA, in trust in British Columbia with a practising

lawyer or notary public or a licensed real estate brokerage.

3. That Ian Hayden Murphy pay an administrative penalty in the amount of $5,000.

4. That Bateleur Properties Inc. pay an administrative penalty in the amount of

$8,000.

41

5. That Ian Hayden Murphy and Bateleur Properties Inc., jointly and severally, pay the

costs of the investigation in the amount of $8,875.

Dated at Richmond, British Columbia this 6th day of March 14.

y.: ugh o e Superintendent of Real Estate British Columbia