Ontario’s provincial real estate oversight agency is investigating allegations that some realtors in Toronto’s red-hot housing market may have rigged home sales deals, or at least offered to do so.
The investigation comes after a CBC Marketplace hidden-camera investigation found realtors widely willing to break a number of ethics rules.
Some promised buyers that they would land a house no matter what other offers are made; others promised to block competing offers; and fully six in 10 Toronto agents contacted by Marketplace offered to give the buyer an advantage if the realtor was hired to represent both sides in a transaction.
Rowhouses on a street in Toronto's Beach neighbourhood. A CBC Marketplace investigation has uncovered evidence of widespread ethical breaches among Toronto realtors. (Photo: Driendl Group via Getty Images)
This practice of representing both sides in a deal — known in the industry as “multiple representation” or “double-ending” — is allowed under Ontario’s rules, but only with the written consent of buyer and seller.
But promising to give the buyer an advantage is a clear violation of ethics rules, the Ontario Real Estate Association (OREA) said in a statement issued last week.
"There is no excuse for the behaviour displayed in the report and Ontario's realtors want to see swift action to crack down on those who break the rules or violate the industry Code of Ethics," said Tim Hudak, the incoming CEO of OREA and former leader of Ontario’s Progressive Conservative party.
“It’s evidence of at least the intent to break the law.”
— Kevin Kulcey of RECO, speaking about CBC's investigation
Kevin Kulcey, the deputy compliance registrar at the Real Estate Council of Ontario (RECO), the province’s real estate watchdog, told the Globe and Mail the council may take the matter to the courts. Kulcey said he has asked CBC for copies of the video they shot in the investigation.
The videos are “evidence of at least the intent to break the law,” he said.
Former Ontario Progressive Conservative leader Tim Hudak, now head of OREA, has condemned ethical violations by Toronto realtors. (Photo: The Canadian Press)
Toronto house prices have soared by more than 21 per cent in just the past year, with some parts of the region seeing house prices nearly double in a year (see slideshow below).
Some observers blame murky bidding wars and investors — many of whom are realtors themselves — for at least part of the rapid run-up in prices.
Local investors — as opposed to foreign ones, which have been a source of controversy in the Vancouver housing market — now buy up 25 per cent of the homes placed on the Toronto market.