Fines should be doubled for realtors who break rules, says Ont. association

TORONTO — The Ontario Real Estate Association says fines should be doubled for realtors who break the rules, at a time when agents are collecting big commissions in the province’s inflated housing market.

In a white paper published Wednesday, the association proposed that the maximum fines for salespeople who violate a code of ethics under the Real Estate and Business Brokers Act should increase to $50,000. OREA also wants the maximum fine for brokerages doubled to $100,000.

“Practices, laws, foreign investment. All these different component pieces of the industry have changed and the regulation needs to change,” said Brad Henderson, CEO of Sotheby’s International Realty Canada, who was on the task force that wrote the paper.

OREA says the average fine per case last year was just $6,000 and that the effectiveness of fines as a deterrent has “eroded” in today’s real estate landscape, where property prices have reached record highs.

The current rules were set in 2002, a lifetime ago for Ontario’s real estate market when the average cost of a home in the province was $211,000. Today it’s $619,000 in Ontario while the average price of a Toronto home has reached $759,000.

“For those who willingly break the rules, these fines are ‘the cost of doing business,”’ OREA said in its paper. But the paper warned that even if fines are higher, penalties may not be enough to deter rule-breakers because fines do not cover the entire commission earned.

“In other words, even under a system of higher fines registrants could still profit from unethical behaviour.”

The paper also recommends that the industry regulator, the Real Estate Council of Ontario, be given the ability to force a realtor found in breach of rules to repay all of their profits. OREA also wants RECO to be given the power to suspend or revoke licenses.

In a statement, RECO’s Registrar Joseph Richer said it’s important the body get the ability to revoke licenses without having to go through a tribunal. He said RECO investigations led to 28 people losing or being denied licences last year, in addition to 29 convictions.

Richer said RECO is also overhauling its education program for people joining the industry.

“When it launches, it will include more hands-on experience and more rigorous testing, which will ensure that new entrants to the profession are ready to provide effective services to buyers and sellers on day one,” he wrote.

Henderson says there is only a small number of people in the industry who have broken rules, whether due to lack of education, or the allure of higher profits.

The white paper is part of a push for changes to discourage potentially unethical real estate practices in Ontario. The province’s 16-point housing plan introduced in April includes a 15 per cent tax on foreign buyers and expanded rent controls, as well as reviews on how consumers are represented by real estate agents.

In June, the province proposed a ban on realtors representing both a buyer and a seller in a transaction. The province said sellers seeking the highest price, and buyers looking for the lowest price have competing interests which makes it challenging for a single agent to represent the best interests of either side.

“This divided loyalty and the associated risks may leave some consumers vulnerable even when written consent is obtained and the necessary disclosures … have been made,” the government said in a discussion paper.

The ban would not apply in some situations such as sales between family members and markets where there are few agents working.

—-

On the web:

The white paper is available at http://www.rebbareform.ca/

Just Posted

Joshua Frank takes stand in murder trial

Joshua Frank testifies he had no idea Klaus family would be murdered

Doctor first in Red Deer to offer Mohs surgical suite for skin cancer

A local doctor says a skin cancer surgery newly offered locally will… Continue reading

Lacombe family in TV cooking contest needs Central Albertan votes

The Gustafsons are in the running to win a trip to Italy

Methamphetamine, THC found in half-million dollar seizure and Bowden Institution

Nearly half a million dollars worth of drugs and other contraband was… Continue reading

Community support needed to bring Canadian Finals Rodeo to Red Deer

Bid from Westerner Park and Red Deer & District Chamber of Commerce

WATCH: National women’s hockey team in Red Deer

Before heading to next year’s Olympics in South Korea, the women’s national… Continue reading

New columnist joining Advocate team

Market Gypsy starts on November 30

Volunteer with victim services in Red Deer

Learn more at info session on Nov. 27

Updated: Missing Sylvan Lake women found

Women were reported missing earlier this week

Liberals propose billions for affordable housing, including individual benefits

A Liberal government fond of promising help for those working hard to… Continue reading

Alberta Party sees growth in Central Alberta

Greg Clark addressed health care needs addressed in Red Deer

Ponoka council freezes Ponoka Fire Department spending

All discretionary spending frozen until full budget numbers are presented

WATCH: Ponoka’s Festival of Trees sees continued support

Three days of celebration and fundraising held at the Calnash Ag Event Centre

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month