Province proposes tougher rules, bigger fines for real estate fraud

The Ontario government is clamping down on real estate fraud and misleading advertising in a bid to better protect consumers. Government Services Minister Gerry Phillips yesterday announced legislative changes that will increase fines for real estate fraud to a maximum of $ 250,000.

“ Nobody makes a bigger purchase than their house,’’ Phillips said yesterday.

‘‘ So we’re trying our best to make sure that they’re dealing with a fair environment.’’ The changes to the Real Estate and Business Brokers Act will hike maximum fines for violations to $ 50,000 from $ 25,000 for individuals and to $ 250,000 from $ 100,000 for corporations.

Phillips emphasized that there are “ relatively few bad actors” among Ontario’s 40,000 real estate agents. Still, he said there remains room to “ significantly improve protections for consumers.” Under the changes, registered real estate agents in Ontario will have to abide by a code of ethics, which will be approved by the province.

“ The code of ethics is not right now law. This will make it law so that you are required to follow the code of ethics,” Phillips said.

False or misleading advertising will also be targeted. Tom Wright, president and chief executive of the Real Estate Council of Ontario, said misleading advertising is a “ serious issue” that must be tackled.

“ It’s not so much price- related. It may be the description of the home. It may actually relate to some of the services that the person would be saying that they’re going to provide. You may see advertising around commissions,” Wright said. Under the new rules, the council, which regulates the industry, would be empowered to order misleading advertisements withdrawn.

Wright said his organization receives ‘‘ a small number’’ of complaints annually from Ontario consumers irate about advertising. The new measures are expected to be in place by March.