Bob Aaron firstname.lastname@example.org
August 11, 2001
Wild West tactics must be corralled
Imagine a Canadian metropolitan area where 40,000 homes and condominiums are sold every year, representing more than $12 billion in consumer spending.
Now imagine that the vast majority of these homes and condominiums are sold by unlicensed salespeople. No legislation governs hundreds and hundreds, perhaps thousands, of sales staff. There is no requirement for education, sales experience, insurance or ethical standards. There is no need for bonding or criminal record checks.
No governing body regulates the conduct of the salespeople and there is no one who can toss the bad apples out of the profession. Nothing prevents the telling of outright falsehoods in sales offices.
The marketing of these 40,000 units is a true Wild West scenario, with no laws, no rules and not even a sheriff wearing a silver star to impose some order in the chaos.
Now imagine that the government of this metropolis mouths some platitudes about trying to protect the consumers who spend this $12 billion annually, but it does nothing – absolutely nothing – to ride into town on a white horse and impose order on the chaos.
Impossible, you say? Outrageous? Fairy tale? After all, this is 2001. We live in a civilized society where such things cannot happen.
But the sad fact is that this situation is not only real, it exists today, right here in the Greater Toronto Area.
Under the Real Estate and Business Brokers Act (REBBA), when a person sells his or her own home without a real estate agent, that person is exempt from being licensed to trade in real estate. By extension, when a builder opens a sales office to sell 500 or 1,000 new homes or condominiums, there is no licensing requirement for the sales staff because they are selling the builder’s “own” real estate.
Now along comes Norm Sterling, Ontario’s Minister of Consumer and Business Services.
Like Marshal Wyatt Earp riding his stallion into Dodge City to bring law and order to the Wild West, Sterling says he wants to “ensure that our legislation provides Ontario consumers with the safeguards they need.”
New homes and condominiums in Ontario should be sold by sales staff who are trained, insured, educated and regulated.
But this ersatz marshal says not one word about protecting consumers who buy $12 billion in real estate annually through unlicensed sales staff.
Sterling wants to make it a crime to falsify paperwork in a real estate transaction. He wants to establish discipline rules for wayward agents, and to restrict auctioneers and lawyers from marketing real estate. (The draft legislation and an accompanying guide are online at http://www.cbs.gov.on.ca. )
But it’s impossible to take Sterling seriously when he says he wants to protect consumers. Although the vast majority of sales staff at new home and condominium projects are competent, honest, capable and sincere, the fact is that there are some bad apples in the barrel and the industry remains totally unregulated.
Here are some examples of misrepresentations made at various sales sites, taken from my own files:
If Norm Sterling really wants to protect consumers, he will close the barn door on this huge loophole.
New homes and condominiums in Ontario should be sold by sales staff who are trained, insured, educated and regulated. They should be licensed under the Real Estate and Business Brokers Act and ideally be members of a trade association like the Toronto Real Estate Board.
Members of the Ontario public who spend $12 billion a year on new residences look to the government to protect them. Sterling cannot let them down.
Bob Aaron is a leading Toronto real estate lawyer.
Bob Aaron is a Toronto real estate lawyer. He can be reached by email at email@example.com, phone 416-364-9366 or fax 416-364-3818.
Visit the Toronto Star column archives at http://www.aaron.ca/columns for articles on this and other topics or his main webpage at www.aaron.ca.