It can be hard enough to find a good home in Toronto with a level playing field. It can be even harder in the condo market, where prices are astronomical and the deck can be stacked against buyers thanks to preferential sales practices on the part of insider real-estate agents.
Intervention could be on the way though. The Ontario government said Tuesday that it will consider reviewing these preferential sales practices as they pertain to transactions of pre-construction condos.
"We committed in Ontario's Fair Housing Plan to working with real estate professionals and consumers to review the rules and see where we can make further improvements to enhance consumer protection," read a statement from the Ministry of Government and Consumer Services.
That broad review process has already begun, as legislators have put out a call for feedback of the Real Estate and Business Brokers Act. It is a process that has drawn support from the Real Estate Council of Ontario (RECO).
"[A review] may provide an opportunity to change the rules as they relate to pre-sale condos. As the regulatory body tasked with enforcing REBBA, we support any move to modernize and strengthen consumer protection," said RECO registrar Joseph Richer.
The way that preferential sales practices typically occur on the pre-construction condo market is that insider real estate agents will unfairly gain access to multiple units in recently built properties, even though other agents who have done just as much to promote the buildings to their clients are unable to secure even a single unit for sale. They may even advertise that their units are guaranteed, which is a dubious tactic, regulation-wise. Some developers go to the length of outsourcing condo presales to specialized real estate sales and marketing firms who already have established networks of serious buyers that they can immediately engage in talks.
Without some sort of systemic change, it's reasonable to think that this sort of behaviour will continue as per usual. The ball is now in the Ontario government's court to address it.