It's election time, and that
provides the opportunity for the political parties to take a stand for
consumer protection in the real estate field in Ontario. Sadly, real
estate consumers have suffered under the current government and it's now
time for the three major parties to declare how they would remedy the
problems if elected.
Here are some areas which have been neglected under the Mike Harris and
Ernie Eves governments, which require urgent attention:
Timeshare ownership: Under Ontario law, there is virtually no
regulation of the sale of timeshare interests (also known as interval
ownerships). This multi-million-dollar industry is often characterized
by high-pressure sales tactics. A 10-day cooling-off period was enacted
by the Consumer Protection Act 2002, but has not been proclaimed into
law. That law would also protect consumers from getting zapped by
artificially low price quotes in future performance contracts such as
furniture moving or home renovations.
Regulation of paralegals: In the face of a
badly-flawed report by retired Supreme Court Justice Peter Cory three
years ago, the Ontario government has yet to take action to regulate the
activities of paralegals. Consumers who hire paralegals currently do not
have the protection of trust fund reporting requirements, mandatory
errors and omissions insurance, guaranteed minimum education standards,
or a compensation fund for misappropriations.
Nuisance protection: The people who now live along the Toronto
waterfront have no protection from the horrendous noise of the Island
Airport, the Molson Indy, raucous party boats, and the Canadian
International Air Show. It's about to get a lot worse if a fixed link
bridge opens the door to jets on our waterfront. If the government
won t protect the downtowners from the racket with legislation, maybe
it s time for them to band together and sue.
Real estate fraud: I have written many columns about ordinary
citizens who have had ownership of their homes stolen from them by
forged title documents. These people have had to spend thousands of
dollars on legal fees and then wait a year or two for government
bureaucracy to crank out a cheque and restore their ownership. There's
virtually nothing that homeowners can do to prevent this. Now, one
innocent family is facing eviction from their home because a fraudster
stole their title and defaulted on a mortgage the real owners knew
This critical issue cries out for government action. The lengthy
process to rectify title fraud should not take more than 30 or 60 days.
In addition, a province-wide police task force should be set up to catch
criminals behind title scams.
The Real Estate and Business Brokers Act. This new legislation
was passed to bring the industry into the 21st century, but
it has never been proclaimed into law. Why is the government taking so
long to draft the regulations that will implement the new regime?
inspectors: A number of municipalities have been, or currently are,
the targets of lawsuits where homes which did not meet building codes
were approved for occupancy. A province-wide crackdown on municipal
building inspectors is in order.
Ontario New Home Warranty Program: I could fill volumes with the
problems in the ONHWP regime, but at the heart is the fact that ONHWP
should not be controlled by the building industry but by a broad-based
board with a statutory mandate to run it in the public interest.
The $100,000 cap on damages is ridiculously inadequate. The prohibition
on homeowners rights to sue their builders should be repealed.
Pre-sales: Builders who back out of agreements when they sell "on
spec" before a building permit is available or a plan of subdivision is
registered should be subject to financial penalties. Consideration
should be given to prohibiting presales before municipal approvals.
Disclosure in the sales office: Buyers of new homes and
condominiums should receive disclosure of all extra costs, potential
delays, the actual size of the home, the fact that they cannot obtain
floor plans or rely on verbal statements made in the sales office, and
that the builder can force them to accept a unit different from the one
they thought they bought.
Honesty in new home agreements: Builders should be required by
law to deliver the home or condominium unit they promised. Buyers should
not be required to sue when the builder delivers a unit substantially
different from the one promised in the sales office. The use of an
industry-wide standard agreement form should be mandatory.
Property tax inequity: Toronto tenants in multi-unit buildings
are exposed to property taxes four times that of single-family units of
the same value. These taxes are, of course, reflected in the rents. Is
it fair for a one-bedroom apartment assessed at $80,000 to pay the same
property tax as a condominium assessed at more than $320,000? Provincial
remedial action is required.
And my No. 1 pet peeve: Unlicensed builder sales staff. Roughly
one-quarter of all new homes and condominiums in the Greater Toronto
Area are sold by staff who have no requirement to be trained, educated,
insured or regulated. A total of 50,000 to 55,000 homes are sold in the
GTA annually. With one in four homes sold by unlicensed staff, roughly
13,000 consumers are buying $4 billion in homes annually from untrained
The fact that buyers of new homes do not receive the same statutory
protection as resale buyers is scandalous.
There s lots of room for improvement in consumer protection in the
real estate sector. Who will be first to step up to the plate - Ernie?