Public trust in the real estate industry takes a hit

For millions of Canadians, buying or selling a house will be the biggest, most important financial transaction they’ll ever make. Because of this, they need real estate agents they can count on working in a regulated real estate industry they can trust.

Regrettably, recent actions by the Real Estate Council of Ontario call into question just how much trust the public should have in this industry.

At first glance, the council appears to have dealt sternly with Cambridge real estate broker Steve Bailey after he admitted to multiple ethical breaches of the laws governing the real estate sector. Bailey was recently fined $30,000, and for most people that sounds like a huge penalty.

Yet flaws in the real estate council’s handling of this case will make fair minds wonder whether Bailey’s offences merited far greater punishment — and denunciation.

What Bailey agreed to having done is deeply disturbing. Most of his fine — $25,000 — was imposed because, in 2016, Bailey tried to help his parents privately buy a Waterloo house for $200,000 less than the home’s assessed tax value, and $300,000 less than its approximate market value. He then tried to prevent the seller from complaining to the regulator about it.

Those figures are eye-popping and losing money like that would be a crippling blow to most people’s financial security.

The regulator also fined Bailey $5,000 for overseeing a sale in Plattsville in 2017 in which a seller received $10,000 less than what a competing offer would have paid. Bailey’s mother-in-law was the agent representing the lower bid.

It’s clear the Real Estate Council of Ontario is satisfied it did the right thing. But we have questions about how it handled the disciplinary process for a wellconnected realtor who was also a former Real Estate Council of Ontario board member.

The council decided long before a planned discipline hearing that it would not consider any consequences that would impact Bailey’s licence. That decision was entirely premature. It limited the consequences Bailey could face before the accusations and evidence arrayed against him had been fully presented.

Meanwhile, the council treated Bailey more lightly as a first-time offender, even though he was investigated for two different complaints involving two separate real estate transactions. By most reasonable counting, that would make him a second- as well as a first-time offender.

In addition, the council said Bailey was co-operative in the investigation. Yet Bailey denied the allegations for more than two years. He claimed to be the victim of an overzealous regulator and fought through his lawyer to have the case thrown out. Indeed, Bailey was defiant on social media even after he was fined.

That hardly sounds apologetic. But the public will never know what went on between the regulator and Bailey. Because here’s the real kicker: Bailey was originally supposed to face a two-week discipline hearing that would have given the complaints against him a full public airing.

In the end, the regulator settled with Bailey after a private meeting, allowing him to avoid the spotlight a public discipline hearing would have shone on him.

Many realtors across Ontario are reacting angrily against the regulator’s handling of the case, saying it will erode public trust in the industry.

“RECO has failed the public,” said Don MacKey, a realtor who formerly worked in Bailey’s office. “These facts should have been heard in a public forum.”

Critics like MacKey, critics from within the industry, are correct. In this case, the real estate council has not shown the public it is protecting their interests.