An Ontario real estate salesperson has been ordered to pay a fine of $20,000 and complete further education after he failed to deliver on advertised commission rebates to two separate clients. The Real Estate Council of Ontario (RECO), the regulatory body for the province’s real estate professionals, found Rochak Badhwar, who is registered as Rocky Badhwar, in breach of multiple sections of the industry’s Code of Ethics.
The discipline case proceeded on the basis of an Agreed Statement of Facts and Penalty, in which Mr. Badhwar acknowledged the misconduct and waived his right to a formal hearing. The events in question occurred while Mr. Badhwar was employed at a firm identified in the decision documents as Brokerage A.
According to the agreed facts, a central component of Mr. Badhwar’s marketing strategy was an offer advertised on his website to provide clients with a 50 percent rebate of the commission he earned on their transaction. This promotional offer attracted multiple buyers, including two who later filed complaints with the regulator when the promised payments were not made.
The first incident involved a client, identified as Buyer A, who retained Mr. Badhwar to purchase a property in City A. At the outset of their professional relationship, Mr. Badhwar verbally confirmed that he would provide the 50 percent commission rebate. Buyer A proceeded to purchase a home for $980,000, with the transaction closing on May 21, 2020. Based on the commission structure of that deal, the promised rebate amounted to 1.25 percent of the purchase price.
Evidence submitted to the discipline committee included a text message from Mr. Badhwar to Buyer A, sent on July 6, 2019, which detailed the calculation. In the message, Mr. Badhwar calculated the gross commission on the $980,000 sale at 1.25 percent to be $12,250. He then listed a series of deductions for legal fees, an inspection, movers, brokerage fees, and taxes, ultimately arriving at a different figure. Despite the client’s repeated requests for the payment following the successful closing of the property, Mr. Badhwar never provided the promised rebate.
A similar situation occurred with a second set of clients, a married couple identified as Buyer B and Buyer C. The couple also engaged Mr. Badhwar and Brokerage A to represent them, influenced in part by the advertised commission rebate. They entered into an agreement to purchase a property in City B for $1,065,000.
In an email sent on December 1, 2020, Mr. Badhwar outlined his calculation for their rebate. He started with the 2.5 percent commission of $26,625, but then deducted a 15 percent brokerage fee and a 40 percent allocation for his personal income tax. This left what he termed a “take home income” of $13,575.75, of which he offered 50 percent, or $6,789.38, as the rebate. A day later, he sent another email offering to add $500 for inspection fees and $500 for legal fees to that amount.
The clients quickly identified a significant discrepancy. In a response on December 4, 2020, they pointed out that Mr. Badhwar’s own website calculator indicated that a purchase at a similar price point should yield a rebate of $13,291. This was nearly double the $6,789.38 he had offered in his email. The clients’ calculation appeared to be based on the gross commission, as advertised, rather than Mr. Badhwar’s net profit after his personal and business expenses. The couple sent a follow up request for payment in March 2021 but, as with the first client, Mr. Badhwar never paid the promised commission rebate.
In the Agreed Statement of Facts, Mr. Badhwar acknowledged that his failure to honour the advertised rebates demonstrated a lack of integrity and honesty. He admitted that his actions were contrary to three sections of the Code of Ethics under the Real Estate and Business Brokers Act, 2002. Specifically, he breached Section 3, which requires registrants to treat every person with fairness, honesty, and integrity; Section 35, which mandates that registrants be financially responsible in the conduct of business; and Section 39, which prohibits any act or omission that would reasonably be regarded as disgraceful, dishonourable, or unprofessional.
Having reviewed the agreed facts, the Chair of RECO’s Discipline Committee accepted the joint submission on penalty. The final order, released on June 4, 2024, requires Mr. Badhwar to pay a $20,000 fine to RECO on or before March 12, 2025. He must also successfully complete the “Introduction to TRESA” course by the same date and provide RECO with proof of completion. TRESA, the Trust in Real Estate Services Act, 2020, represents the new legislative framework governing real estate professionals in Ontario.
Read more cases about proceedings in regulated professions here.
