Ontario Real Estate Association wants new watchdog, stricter rules
TORONTO -- The Ontario Real Estate Association is advocating that 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.
It 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 the province 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,"' the paper said.
But it warns that even if fines are higher, penalties may not cover the entire commission earned.
"In other words, even under a system of higher fines registrants could still profit from unethical behaviour."
It recommends that the industry regulator, the Real Estate Council of Ontario, be given the ability to force a realtor to repay all of their profits. OREA also wants RECO to be given the power to suspend or revoke licenses.
The white paper is part of a push for changes to discourage potential 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.