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A RECA hearing panel fined Ali Merchant $21,000 and suspended him for a year after finding he breached the Real Estate Act on several occasions.

The Real Estate Council of Alberta is seeking a lifetime ban of an Edmonton real estate agent who had already been suspended for one year and fined $21,000.

Mehboob Ali Merchant admitted to several breaches of the Real Estate Act that occurred between 2011 and 2019, according to an Oct. 21 RECA written decision.

A RECA hearing panel found Merchant leased a condo without permission, mishandled a commission, and withheld documents from investigators.

“The Industry Member committed multiple breaches that were criminal in nature and involved intentional deception for the purposes of enriching himself,” Merchant’s admission of conduct reads as contained in the RECA decision.

“The theft, fraud and identity fraud were all committed intentionally, with full knowledge that he was deceiving his victims,” the RECA hearing panel summary reads. 

On Oct. 31, RECA’s executive director filed an appeal, citing errors in the decision and seeking a lifetime ban.

“Had it not been for these errors, the Hearing Panel would have imposed the proper sanction of licence cancellation and lifetime licensing prohibition.” 

A date for the appeal has yet to be posted on RECA’s website.

VETERAN REAL ESTATE AGENT

Merchant, an 11-year veteran of the industry, later unsuccessfully attempted to retract his admission.

“I want to make it very clear to the hearing panel that I signed the … agreement under duress, extreme pressures and stress,” he argued in challenging the procedural fairness of the hearing.

Merchant worked under the name Ali Merchant in Edmonton with the Century 21 Platinum Realty company but is no longer listed on its website. 

Though phone calls and text messages, Merchant told CTV News he’s filed an appeal to stay the decision. 

RECA has yet to post a hearing date for Merchant’s appeal on its site. 

When asked to comment on the initial RECA ruling and the executive director’s appeal, Merchant declined on multiple occasions. 

Merchant later faced criminal fraud charges in connection with one of the breaches, but claimed they were dismissed. It’s not clear if other charges are pending.

RECA declined to comment, citing its policy of not discussing individual disciplinary decisions. 

MISPLACED MONEY

The breaches centre on an Edmonton-area condo and its owner who is described in the decision as Merchant’s family friend.

In February of 2011, Merchant received $20,000 from his client to be paid as commission on the condo’s purchase contract, but the RECA decision states that he instead deposited those trust funds into his own bank account. 

“This breach was a crime of knowing deception and proven dishonesty,” argued RECA’s case presenter. “He never gave it to his brokerage. This is theft.”

Merchant cited his industry inexperience at the time and called the deposit “a clerical oversight” which he said “can simply be dealt with administratively.” 

“I did pay all applicable fees charged by my brokerage, and thereby, did not commit any theft,” Merchant argued as per the RECA decision.

LEASE DEAL CONFUSION

Four years later, the same condo (and same owner) were at the centre of another incident involving Merchant in January of 2015. 

According to the RECA decision, Merchant attempted to enter into a lease with the condo owner on the understanding he was acting on behalf of his brokerage. 

In actuality, the tenant was a corporation Merchant had registered to appear to be his brokerage. 

“He did this for the purpose of personally profiting and thereby committed identity fraud,” the decision reads. 

While admitting his actions were reckless, Merchant argued the corporation was registered by his wife to handle her private real estate portfolio. 

“It was not my corporation and I have never had any positions or rights to this corporation.” 

RENTED WITHOUT PERMISSION

The next month, Merchant rented out the condo to a tenant, but did so without the owner’s permission and without telling that tenant he wasn’t authorized to lease the property, according to the RECA decision.

“This cost [the tenant] money because she had to move early and unexpectedly. This cost [the owner] money because she was deprived of the lawful use of her own property.” 

The decision notes Merchant offered to pay the owner back but also that it was less than what he collected and the gesture came only after he was under investigation. 

“[Merchant] unlawfully collected rent from [the tenant], which he kept for himself. This is fraud.” 

Merchant argued he never told the tenant that he owned the condo but that he didn’t share with her the written agreement he had with the condo’s owner

“This was reckless on my part but not fraudulent.” 

In April of 2015, the owner filed a formal complaint with RECA, sparking an investigation in which Merchant was accused of withholding evidence. 

“RECA investigators asked Mr. Merchant multiple times to provide a copy of the lease with GC and copies of all correspondence in regard to that lease,” reads the decision.

“He intentionally withheld these documents.” 

Merchant stated the documents were not in his possession when asked for them and that they were later recovered from the tenant by investigators. 

Citing a need to “maintain the public’s confidence in the integrity of the profession” the RECA panel levied the fine and suspension on Merchant, also requiring him to complete an education course before returning to the industry.

Merchant was also ordered to pay an additional $1,500 in investigation and hearing costs. 

He can reapply for his registration on Oct. 17, 2020.