TO STRENGTHEN CONSUMER PROTECTION
FOR IMMEDIATE RELEASE
June 21, 2022
STRONG MAJORITY OF ONTARIANS WANT OVERSIGHT OF REAL ESTATE AUCTION COMPANIES TO STRENGTHEN CONSUMER PROTECTION
Recent Abacus Data polling shows 70 per cent of Ontarians support regulation of real estate auction companies
TORONTO – When it comes to making the biggest financial purchase of your life, Ontario’s families deserve to have full confidence in the home buying and selling process, and that includes trusting that the professional by your side has the highest professional standards, training, and modern tools. However, current stipulations in the Trust in Real Estate Services Act (TRESA) exempt auctioneers from registration or licensing requirements – a loophole with frightening implications for unsuspecting consumers trying to buy a home.
The Ontario Real Estate Association (OREA) is calling on the re-elected Government of Ontario to eliminate the outdated auctioneer loophole and require owners of real estate auction companies to formally register with the Real Estate Council of Ontario (RECO). A recent survey conducted by Abacus Data on behalf of OREA shows that 70% of Ontarians support the regulation of auctioneers who would sell homes in an open bidding process.
“Real estate auction companies are springing up across Ontario, but auctioneers are not subject to the same regulatory framework or oversight traditional brokerages are, and that’s a huge consumer protection issue,” said OREA CEO Tim Hudak. “Consumers should have a right to choose how they want to buy and sell real estate, but they should also have a right to expect that they will be protected against dishonest actors.”
REALTORS® must take mandatory licensing education, pass a background check, protect deposits, carry insurance, and follow rules that are designed to protect consumers – or face fines and potentially lose their license. However, since auctioneers are exempt from these rules in Ontario, real estate auction companies operate with almost no oversight, using the farm auction loophole while marketing themselves like a traditional real estate brokerage.
“The government’s role in the housing market has always been to protect home buyers and sellers against bad actors. If an auction goes badly, consumers have very few remedies available to them,” said Hudak. “Ontario needs to close the outdated auction loophole in TRESA to stop any sidestepping of oversight and give prospective buyers and sellers the confidence that whoever they are working with has their best interests at heart.”
In other jurisdictions, such as Australia, where the practice of auctioneering real estate is more common, phantom bidding became such a problem that government had to step in and introduce tough penalties and fines to better protect consumers.
Outside Manitoba, Ontario is the only province in Canada that does not currently have a regulatory framework to protect consumers using auctions to sell property. The provincial government must take action to ensure all Ontarians who buy or sell real estate, regardless of method, have the same level of consumer protection in place to protect their largest investment – their home.
For more information, please contact:
Specialist, Media Relations, OREA