Real estate broker Brigitte Le Pailleur used a strategy common in the sale of residential homes to enrich herself at the expense of her clients. Found guilty of serious conflict of interest offenses, she received a historic fine in order to dissuade other brokers from continuing to use this process.
Brigitte Le Pailleur, who was at the head of the real estate agency Le Pailleur inc. located on the Plateau Mont-Royal in Montreal, must pay a fine of $150,000, or the maximum amount of $50,000 provided for by law for each of the three counts for which she was found guilty, and see her license exercise suspended for 180 days.
M’s customersme Le Pailleur had used his services to sell a triplex in Montreal, because they said they knew nothing about real estate and needed advice. During this transaction, the real estate broker with 38 years of experience will place herself in a conflict of interest three times.
The broker had to sell the building of an elderly lady
The non-occupying owner of the triplex, Cécile Sylvestre, received an advertising letter by post at her residence every year from Brigitte Le Pailleur offering to sell her income property. The Bélanger brothers, who represented their mother for the sale of the triplex, therefore decided to contact her. They were in no rush to sell, but knew they would eventually have to “stake down” the building and did not want to embark on that adventure.
The Bisson Expert firm provided them with an estimate for the work: $28,500 plus taxes.
When Éric and Alain Bélanger signed the brokerage contract with broker Brigitte Le Pailleur in October 2018, the sale price was set at $995,000 since there was approximately $30,000 of work to be done.
Barely a few days later, while the broker was still under contract with the Bélanger brothers, she offered to buy the building for $900,000. The broker has not yet marketed the triplex and has not yet displayed it on Centris.
The brothers accept. During the hearings before the disciplinary committee, Éric Bélanger declared that the broker wanted to buy the triplex “to make her carpenter work and not to resell the building in undivided floors a few months later”.
Finally, the broker decides to renegotiate the price down by $50,000. She asserts that she must compensate the tenants by paying them $20,000 to leave the accommodation and that the “piling” work that she had estimated by another firm, Héneault et Gosselin, will cost 61 66.70 $ taxes included instead of $28,500 plus taxes.
The Bélanger brothers managed to reach an agreement at $885,000.
At the beginning of 2019, the Bélanger brothers realized that they had been fooled by mistakenly receiving the invoice for the work ultimately carried out by Bisson Expert. The amount is $30,900 plus taxes ($37,881.96) rather than the $62,000 which was used to lower the price of the triplex.
But this chance discovery is only the beginning.
As specified in the decision of the Disciplinary Committee of the Organisme d’autoréglementation du courtageimmobilier du Québec (OACIQ) of March 6, 2023, Brigitte Le Pailleur put the building up for sale three months later as a broker, on February 28 2019, but in the form of condos. Apart from the foundation straightening work, very few improvements were made to each of the units before being put back on sale, according to the testimony of his principal assistant Renaud Bourassa, who has worked with the agency since 2016.
“Éric Bélanger will realize that the respondent sold each floor of the building as undivided condos, a sales strategy that the respondent never suggested he do. He is of the opinion, to use his own words, that we got screwed”says the court document.
“Motivation is obviously the lure of gain”
In April, May and September 2019, the three condos were sold for $420,000, $540,000 and $470,000. The broker paid $885,000 for the building and resold it as condos for $1,430,000.
The broker admits, during the disciplinary hearings, that she did not pay $20,000 to obtain the tenants’ departure, but $16,000.
The motivation is obviously greed, affirms the disciplinary committee. She dishonestly negotiates the reduction in the sale price already accepted by the sellers under false pretenses.
Extract from the decision of the disciplinary committee
“The evidence clearly establishes that the respondent is in a conflict of interest from start to finish and that there is no question that the respondent would suggest that they be represented by a real estate broker. The respondent also does not want the building to be broadcast on Centris,” indicates the disciplinary committee.
Practice trivialized by many brokers
Buying a client’s property before even putting it on the market like M didme Le Pailleur, and thus placing oneself in a conflict of interest, is a way of doing things trivialized by many brokers, notably by a star of the show Number 1 at CASA, David Tardif, suspended for the same reasons and who is cited in the decision. The practice is so widespread that M’s clientsme Le Pailleur did not even know that the broker was violating the Real Estate Brokerage Act and did not file a complaint.
The OACIQ is satisfied with the decision of the disciplinary committee, because it truly embodies the desire to protect the public, in addition to sending a dissuasive message to real estate brokers, underlined Me Caroline Champagne, vice-president of management at the OACIQ, in a press release.
“When a customer gives us their trust, for us, it’s an honor,” says Brigitte Le Pailleur in a promotional video published on YouTube. “At Le Pailleur, we are a plus in a transaction, we enrich our clients,” concludes the broker condemned for having done the opposite.
Aged 71, Brigitte Le Pailleur is replaced for the moment at the head of the agency by her daughter. She has 30 days to appeal the decision of the disciplinary committee.