Honourable Lisa Thompson
Minister of Government & Consumer Services
College Park, 5th Floor
777 Bay St
Toronto, ON M7A 2J3
Congratulations once again on your appointment as Minister of Government and Consumer Services. We look forward to working with you in your new capacity. I hope one of the first things you do is fix the broken real estate disciplinary system in Ontario.
Let me tell you why.
Real estate professionals guide consumers through the largest financial transaction most individuals will ever make. In doing so, they rely on trust, integrity and professionalism to build long lasting relationships with clients and customers. So, it is understandable that when real estate professionals break the rules, violate the trust of Ontario consumers and behave in a manner that reflects badly on the entire profession, REALTORS® get angry.
Given recent media coverage of certain RECO disciplinary matters and the devastating effects of such decisions on both the profession and consumer confidence, we are in need of your help, now more than ever.
As I am sure you can appreciate, a broken disciplinary regime affects both those individual registrants working in the profession and consumers alike while significantly undermining the profession as a whole.
OREA’s call to action to fix this serious problem first began in 2016 and it is our position that individuals whom have been found guilty of serious ethical violations and illegal activity should have no place in the real estate profession. Anything less diminishes consumer confidence and is damaging to the real estate profession and industry.
Under the current system, determined rule breakers treat existing penalties simply as the cost of doing business and not as a deterrent. Moreover, RECO has little authority to revoke or suspend real estate licenses for egregious behaviour. Instead, the power to revoke or suspend licenses rests with the License Appeal Tribunal (“LAT”), a body consisting of political appointees with very little real estate experience. LAT has had a demonstrably poor track record of punishing those who break the rules, even in circumstances involving criminal behaviour.
Ontario REALTORS® want and need to see this broken disciplinary system fixed.
As you are no doubt aware, the Ontario Real Estate Association (“OREA”) was instrumental in having your Government initiate a review of the Real Estate and Business Brokers Act, 2002 (“REBBA”) earlier this year. This legislation governs all individuals who trade in real estate in Ontario and is administered by the Real Estate Council of Ontario (“RECO”), the regulator responsible for enforcement and consumer protection.
Specifically, we are asking your Government to implement three key changes to REBBA.
First, it is time to end LAT’s weak oversight of the real estate sector. Instead, the ‘RECO Discipline and Appeals Committee’ should be given the authority to revoke and suspend licenses. This will be a far more direct and therefore, a more effective way of dealing with those more serious REBBA violations.
Second, we need to eliminate any financial incentive for bad behaviour. RECO should be given the ability to order a registrant to repay either all, or a portion of, any financial gain resulting from a breach of the REBBA Code of Ethics. This is referred to as ‘disgorgement’.
Finally, RECO needs to be more proactive in investigating those who are breaking the rules. The existing enforcement model in REBBA is complaint-driven and limits the Registrar’s ability to proactively conduct investigations. RECO should have clear legislative power and greater authority to proactively investigate violations under REBBA and its Code of Ethics.
If implemented, these three changes would go a long way to sending a powerful message that the Provincial Government will not tolerate unethical activity in such a critically important part of Ontario’s economy – the real estate sector.
In closing, I am extremely proud to work for an Association and a Board of Directors that refuses to stand idly by while a small number of individuals take advantage of consumers and besmirch the reputation of thousands of hard-working real estate professionals.
We are grateful that your Government has initiated a review of REBBA and we urge you to continue this important work with a focus on remedying the broken real estate disciplinary regime in Ontario.
Thank you for your attention to this matter and please accept my best wishes.
Tim Hudak, CEO