Time for some follows.
RECO is the housing cop in Ontario. It functions as a regulator of the industry, but without the cut-off-your-glands judiciary clout of the agency that oversees the financial advisory business. Still, RECO can fine agents, suspend licenses and make life reasonably miserable for those who break the rules. The trouble is, unlike the financial and bank cops, RECO doesn’t have a platoon of investigators, inspectors and auditors who make registrants live in fear of breaching the smallest rule.
Hence, the Wild West that now exists in our biggest province, with imitations across the country. In BC, for example, land of yellow helicopters ferrying fake Chinese agents, and condo showrooms with fake Chinese buyers, the Real Estate Council of British Columbia’s turned from watchdog into lapdog, or maybe more like a pet guppy in a plastic bag in your mom’s guest bathroom toilet tank. Egregious malfeasance on the part of professional housing marketers has escaped scot-free.
Well, back to Nancy Taza and her condo-thumping fictional math. Former career realtor and housing consultant Ross Kay says not only is the 31-year-old realtress in contravention of RECO guidelines with the email message posted here yesterday, but also with content posted on her web site and wild-‘n-crazy Facebook page. (Note: after this post was published Ms. Taza’s FB page, replete with its bikini pictures, was taken offline.)
“While RECO can’t touch TREB or it’s non-registrant staff,” says Kay, “Taza is a different story. This has been brought to RECO’s attention.”
Indeed. A developer, builder or marketing maven can promise you a 160% return in three years on a two-bedroom condo that isn’t built yet, but it’s a different story entirely when a licensed agent/broker makes the same broad statements. As pointed out here yesterday, there are an astonishing number of people who actually believe it all. Especially when it comes from the lips of a Mercedes-driving, penthouse-dwelling, party-going Amazon.
And here’s another follow for you – the sad saga of Meerai Cho, the go-to lawyer for Toronto’s real estate-buying Korean crowd who mistakenly gave $12 million in condo deposits to a developer who promptly flew to Seoul. The cops figure she’ll eventually face 300 charges, while she’s already been thrown out of the legal profession, and declared bankruptcy. But the victims find themselves in a limbo – covered only marginally for lost deposits by the new home warranty people, and unable to sue a dink who fled the country.
So will they be able to go after Cho’s malpractice insurance policy – blanket coverage all lawyers must carry?
Not so fast.
One of the blog dogs is an insider, and provides this: “All the stories seem to be leaving out that as a practicing lawyer she’d have malpractice insurance coverage,” he says. “What it would hinge on though, among a million other things, is whether it was a genuine error (which is covered) or fraud (which is isn’t covered by the policy).
“It all depends entirely on what kinds of claims end up in our claims department, but my two cents is that those buyers would be a lot better off if she genuinely just screwed up.”
The Cho saga resumes on October 2, with her next court appearance. Unfortunately for the victims – at least one of whom plopped down $700,000 – the combined local cop/RCMP investigation could take well into 2015, and no insurance payouts are expected until the whole mess has been unpeeled.
There are lessons here, as I’ve pointed out. Despite the fact 70% of Canadians are heavily invested in this one asset, and have placed $1.1 trillion in financing on it, real estate remains basically unregulated. Agents can promise future returns on property that doesn’t exist. Real estate boards can secretly alter published numbers, without consequences. Consumers can be denied access to basic information, like days on market or sales histories. Developers can delay for years handing over product they’ve already sold. And 200 families can lose their life savings and look forward to diddly.
Meanwhile people worry about losing money on a bank stock. It might be different, of course, if there were a tank top involved.