'Fraudulent act' costs Winnipeg man his right to sell real estate in Manitoba

A Winnipeg man's registration as a real estate salesman has been cancelled after a family vacated their home on a tight deadline for a sale that never went through, then changed brokerages and, months later, got $60,000 less for their house than what they expected when they moved out.

A Manitoba Securities Commission panel found Reginald Wayne Kehler engaged in professional misconduct and conduct unbecoming a registrant when he signed a document on behalf of sellers without their knowledge, reduced the listing price of a home without their approval, and didn't tell them for nearly a month that a potential buyer hadn't paid a promised $100,000 deposit.

Kehler's failure to tell the sellers in a timely way that the deposit hadn't been paid was deceptive dealing, which meets the Real Estate Services Regulation definition of a "fraudulent act," the panel's decision says.

The sellers, identified as D.R. and P.R. in the panel decision released Wednesday, were awarded $10,394 from the real estate reimbursement fund. Kehler was ordered to pay $12,075 to cover costs of the investigation and hearing.

The sellers were a military family who had to move in 2020 after the husband was posted to Ottawa.

They chose Kehler as their listing agent, because he had helped them find the home when they moved to Winnipeg in 2018, and they had a good relationship with him, the panel's decision says.

They  listed their house in May and on June 15, 2020, accepted an offer of $570,000 with possession on July 15. A deposit of $100,000 was to be paid within 72 hours of acceptance of the offer.

Kehler was the salesperson for both the buyer and the sellers — but the sellers say he never told them that.

A form that indicated the sellers knew he was also representing the buyer, dated June 15, 2020, was filed.

While it appeared to be signed with the sellers' names, they said they didn't see it until March 2021. One of the two wasn't even in Winnipeg on June 15.

"Kehler, in his interview with commission staff, acknowledges that the sellers never signed this document — we note that the purported signatures on the form look nothing like the actual signatures of the sellers on other documents," the decision says.

Kehler told commission staff he'd been authorized to sign on the sellers' behalf, which they denied. The panel found them more believable.

Once the deal was made, the sellers, believing they had just a month before the buyer would take possession of their home, quickly packed up and prepared to move with their two young children.

Buyer never made deposit

Meanwhile, the buyer hadn't made the $100,000 deposit before the deadline — but Kehler didn't tell the sellers.

Kehler told commission staff that was because he thought the deposit was still coming, and he didn't want to cause more stress for the sellers.

On July 10, just five days before the buyer was to take possession and the day before the family was leaving Winnipeg, the sellers spoke to Kehler — but he still didn't tell them the deposit hadn't been paid.

Kehler "said everything was fine," according to the decision.

It wasn't until the evening of July 13, when the family arrived in Toronto on their way to Ottawa and just 36 hours before the scheduled closing, that Kehler told them he'd never received the deposit.

Eventually, they received $4,000 of the deposit, but the sale of the house never closed. The sellers scrambled to extend the insurance on their old home and make sure they continued to pay the utility bills, the decision says.

Home relisted

Kehler then recommended they relist the home, and it went back on the market at $574,900.

On Aug. 10, 2020, Kehler recommended the price be reduced to $569,900. Instead, the seller said he should reduce the price to $567,900.

But when the seller looked at the online listing on Aug. 22, it was listed at $564,900.

The sellers also asked Kehler about maintaining the property, since they were no longer in Winnipeg. He agreed he would, but friends ended up going and mowing the lawn, the decision says.

The sellers asked Kehler and his brokerage about what could be done to "make things right," the decision says, but they never received any responses.

On Sept. 5, they hired a new brokerage to sell the home. Under the new real estate salesman, they accepted an offer on Dec. 13, and closed the deal Jan. 2, 2021, receiving $507,500 for the home.

Kehler's actions were "contrary to the best interests of the public" and undermined "public confidence in the real estate industry," the decision says.