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Brian Madigan LL.B., Broker

RE/MAX West Realty Inc.,
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Brian Madigan’s Comments on OREA’s “NEWS” Release 25 June 2017

June 28, 2017 - Updated: July 2, 2017

Brian Madigan’s Comments on OREA’s “NEWS” Release 25 June 2017

Recently, OREA has decided to part company with RECO and approach the public independently. Since I have been critical of RECO, I should at least level the playing field with some comments about OREA’s latest.


Here is the article from OREA as published by the Toronto Sun as an “editorial”. My comments appear in yellow.


Realtors want those who break the rules tossed out




For most young families, buying a home is the largest transaction they’ll ever make.

It involves taking their life savings and putting it in the hands of professionals who they trust to help them find an ideal home.


Ontario realtors are probably the most important of those professionals. They work directly with home buyers and sellers facilitating over 200,000 residential home transactions in Ontario every year.


A realtor’s livelihood depends on building long lasting relationships with people. Realtors are optimistic, outgoing people but lately a lot of them are getting angry.


I suppose they don’t know the ones that are pessimistic and introverted. There are 80,000 real estate practitioners in Ontario, so that’s quite the generalization.


They’re mad at reports of a few real estate agents abusing the trust of Ontarians looking to achieve the Canadian dream. And we want the rule breaking to stop.


That’s why leaders in the real estate profession are fighting for higher professional and educational standards. We proposed the idea to Premier Kathleen Wynne and she agreed, announcing a long overdue update to the industry rules.


This is rather strange since education had been the main business of OREA for decades. In fact, OREA truly wasn’t pushing for any changes and appeared to endorse the status quo. It had become quite complacent. Churning out new real estate practitioners was its business. OREA was also complacent when it came to professional standards. As time went on, it abandoned both fields to RECO.


Here are three big changes Ontario realtors are calling for to make Ontario a leader in North America.

First, Ontario should make it a lot more demanding for someone to get and maintain their real estate licence. Outdated government policies have meant that it takes longer to get certified as a hair stylist in our province than it does to get a real estate licence. This just doesn’t make any sense in 2017 with a far more complex real estate market and the high value of homes.


This seems “odd”. First, there’s no such thing as a real estate licence in Ontario. OREA should know that, it teaches the course. It’s called a “registration” as any publication from RECO will demonstrate. Indeed, it is a “licence” in some other jurisdictions, just not Ontario. Maybe OREA should start training hair stylists? Why the pejorative comparison! Apologies should be made to hair stylists.

“This just doesn’t make any sense in 2017 with a far more complex real estate market and the high value of homes.” That’s a crazy statement. Would it have been fine with prices at 50% of their present values in 2007? And, by the way, it’s not more complex than a decade ago. If so, what’s more complex? And, where were OREA’s courses addressing these complexities over the last decade?


OREA has input into the education system. It ran it for decades and still does. RECO put the $32 million contract out for tender and Humber College was the successful bidder. For decades, OREA was quite content. There was no indication of vocal advocacy to move in the direction of higher, better and more challenging material. Exams became easier under OREA.


Ontario needs to raise the bar when it comes getting a real estate licence. (sic)


Standards for maintaining a real estate license (sic) also have to increase. The mandatory continuing education program administered by the industry regulator, the Real Estate Council of Ontario (RECO), is beneath the profession. It involves taking three online, multiple choice courses every two years that are not marked and can be taken as many times as it takes to pass. That light touch does nothing for professionalism or consumer protection.


OREA’s comment about the RECO 2 year registration update exam is correct. It’s now, 100% online, RECO was pleased, in fact, over the top about its success with the new format. Genuinely, most practitioners had very little positive comments  about it. OREA’s all day program was to be much preferred.


Second, we need to strengthen the real estate industry’s code of ethics. The code sets out most of the rules and obligations which govern the interactions between agents and consumers. For example, a new code of ethics should ban the use of “escalation clauses,” a shady practice that is contributing to an overheated market and frustrating consumers in transactions with multiple offers.


Strange that OREA is saying this now. RECO just made the topic controversial when it published two Bulletins about the subject a month ago. At that point, OREA published a written criticism of RECO. However, let’s make one thing perfectly clear, “it’s not contributing to an overheated market”. That is “head in the sand” thinking. Who is the source for that?


The real estate community is talking about these clauses, but not using these clauses.


Certainly, they are not used in sufficient numbers to make any contribution to an overheated market. By the way, at the time of publication of this editorial, namely 25 June 2017, the market was not overheated at all. So, where does OREA get its numbers?


We also think agents who hold themselves out as experts in commercial real estate or condos, for instance, should have to prove it by taking additional licensing (sic) courses — a change that will give consumers more certainty that the professional they’re working with has the right skills and knowledge.


This is a point well-taken. But, it’s been the same thing for several decades. Did you know that you could buy and sell the CN Tower with a provisional registration status without ever having taken either the Commercial Real Estate or Law courses? Where was OREA’s voice then? This is not new.


Finally, Ontario needs much stronger deterrents to unethical behaviour and a regulator that isn’t afraid to throw the book at violators. Right now, fines amount to a mere slap on the wrist. They should be dramatically increased to stop bad behaviour in its tracks. Ontario should also create a rule that mandates the loss of income earned in a transaction when an agent breaks ethical obligations to a consumer. Lastly, the regulator must step up and kick unethical agents who repeatedly break the rules out of the profession altogether.


Both RECO and OREA should be advocating for this. RECO is now, once the RECBC was abolished by the BC Government. Small fines and little by way of oversight, so why have them? Now, same thing could easily take place here. It might make the CBC happy which is apparently anxious to govern real estate agents. The current Ontario Government review is looking to increase these fines etc.


In today’s real estate market, families need to be sure that their real estate agent can provide the best advice possible. Buyers need an agent they can trust and who adheres to the highest standards. And they need to feel like no matter who they decide to work with, they can expect the same level of professional service and high standards.


The “best advice” by all 80,000 practitioners is naïve. Someone who is trustworthy and adheres to high standards should be an expectation. The final statement is again naïve. The best agents will exceed the other agents. What we have to be talking about is a basic level of minimum standards. However, again, why now, particularly following decades of silence?


It’s time to raise the bar for real estate education and to throw bad actors out. It’s time for Ontario to become a leader in North America for professional standards in the real estate industry.


— Tim Hudak is CEO of the Ontario Real Estate Association while Ettore Cardarelli is president of the association.


This is somewhat of an odd way to end. The word “while” is misplaced. Cardarelli, with the senior position should go first, and his title, namely, “President” should start with a capital, just the same as the capital “C” in CEO. Also, there’s no need to mention ”association” a second time. Perhaps, I’m being too picky, but, then again it might be time to be picky. Both RECO and OREA are now at odds with each other. Both feel vulnerable in the wake of CBC’s investigative journalism. Hopefully, some positive changes to the industry will take place.


Brian Madigan LL.B., Broker

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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

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