A Toronto real estate salesperson has been ordered to pay a $24,000 fine after a disciplinary panel found she engaged in professional misconduct while representing her own brother in the purchase of a pre-construction condominium. The Real Estate Council of Ontario (RECO) determined that Nasma Ali violated multiple sections of the industry’s Code of Ethics, including failing to protect her client’s best interests, not providing conscientious service, and using inaccurate information during the transaction. The case revolved around Ali encouraging her brother to purchase a pricey unit as an investment he could not afford, which ultimately led to the use of a questionable mortgage document to satisfy the builder.
The events began in September 2019, when Ali, a registered salesperson, approached her brother about an investment opportunity. The property in question was a pre-construction condominium unit in a new development. Ali advised her brother that he could purchase the unit and then assign the contract to another buyer before the final closing date, a practice commonly known as flipping. At the time, her brother and his wife had recently immigrated to Ontario from another country and had not had stable income for approximately a year. Despite their precarious financial situation, Ali assured them she could assist in obtaining the necessary mortgage documentation required by the developer.
Trusting his sister’s professional guidance, the brother and his wife moved forward. On September 14, 2019, they visited the builder’s sales office and signed an Agreement of Purchase and Sale for the condominium, which had a price of $701,400. They provided an initial deposit of $5,000, along with a cheque for $30,070 due in 30 days and three post-dated cheques for $35,070 each to cover the remainder of the required 20 percent deposit. In the paperwork filed for the purchase, Ali was listed as the realtor for her brother and his wife. The identification records submitted to the builder represented that the brother was employed as a mortgage agent and his wife as a fashion designer. A separate set of records for Ali’s brokerage’s internal files listed the brother as a mortgage agent at a company called Mortgage A and his wife as the owner of a business.
A critical condition from the builder was a mortgage pre-approval letter. Ali connected her brother with a mortgage agent who informed them that the builder would only accept a pre-approval from a bank. The agent referred them to a mobile mortgage advisor at a major bank but stressed that the brother should not mention the agent’s name in his application. Ali was kept aware of this correspondence. On September 23, 2019, the brother contacted the bank’s mortgage advisor and stated a family income of $218,395, though no supporting financial documents were provided. The following day, the bank issued a Mortgage Affordability Estimate. This letter explicitly stated it was “not a mortgage approval, rate hold or interest rate guarantee” but an estimate of what they might be eligible for.
The deal began to falter on October 9, 2019, well after the mandatory cooling-off period for new condo purchases had expired. The builder rejected the estimate letter and demanded a formal Pre-Qualification Certificate. At this point, the brother expressed his concern to Ali, stating he did not think the purchase would work out and asked if she or one of her other clients could take over the property. Ali persuaded him to try again with a different lender. She then contacted a real estate lawyer she knew to get a referral for another mortgage agent, who in turn was also a chartered accountant.
At Ali’s direction, her administrative assistant sent the purchase agreement and a blank Pre-Qualification Certificate form from another major bank, Bank B, to the new mortgage agent. The next day, on October 11, 2019, Ali spoke with the agent on the phone. Less than an hour later, an assistant at the agent’s firm emailed a completed Bank B Pre-Qualification Certificate directly to Ali. The document certified that the brother was approved for a mortgage of $561,120. Without consulting or even informing her brother, Ali instructed her assistant to immediately forward this certificate to the builder. Two days later, the builder proceeded to deposit the brother’s $30,070 cheque for the next portion of the down payment.
By late November 2019, the financial reality became unavoidable. The brother informed Ali that he could not afford the next scheduled down payment and needed to back out of the agreement. Ali advised him to contact the builder directly and warned that he would likely face a penalty for terminating the contract. On December 16, 2019, the brother signed a termination agreement with the builder, forfeiting $1,500 of his deposit as a penalty. An investigation later revealed that the Bank B Pre-Qualification Certificate was highly irregular. It indicated it was created by a manager of mobile mortgage services at Bank B, but that manager had never created the document and had no knowledge of or contact with Ali or her brother.
In a decision released on June 5, 2024, the RECO Discipline Committee accepted an Agreed Statement of Facts in which Ali admitted to breaching several sections of the Code of Ethics. These included failing to treat every person with fairness and honesty, failing to protect her client’s best interests, failing to provide conscientious and competent service, and knowingly making an inaccurate representation. She also failed in her duty to use her best efforts to prevent error and misrepresentation. By agreeing to the facts and penalty, Ali waived her right to a formal hearing. The panel ordered her to pay a fine of $24,000 to RECO within 250 days.
