The Ontario government has said it is considering a review of preferential sales practices for preconstruction homes as part of its wide-ranging policy changes for the housing market, which will include a review of REBBA.Rebecca Blackwell/The Associated Press
Toronto-area real estate agents facing charges in relation to allegedly accepting money in exchange for preferential access to new homes say they will defend themselves in court.
The Real Estate Council of Ontario (RECO), which regulates realtors in the province, has charged Sean Brackin, Fang (Emmy) Ruan and Jin Wang with violating the Real Estate and Business Brokers Act (REBBA).
In an interview, Mr. Brackin, who is facing two charges, said he did nothing wrong and pointed to the conduct of others during the Greater Toronto Area's red-hot spring real estate market.
Mr. Brackin, who was selling new homes for a developer in Oshawa in April, said the sales team decided to offer early access via VIP tickets e-mailed to 67 prospective buyers randomly selected from a database in an effort to avoid days-long lineups. However, he said some of those who received tickets sold them to other potential buyers for thousands of dollars.
Mr. Brackin said he believes he was charged after a man who bought two VIP tickets from others made a complaint when he failed to get his money back after trying to resell the tickets as the market began to soften.
"It's turned into an absolute nightmare," Mr. Brackin said, adding he plans to sue the complainant for defamation. "We have no control over people doing that and unfortunately in the market that we were in … that stuff happened."
Mr. Brackin's lawyer, Barry Evans, said the facts of the case do not fit the charge laid against his client.
"We had a strange real estate market. Strange things were happening and they've decided that they think this section fits but Mr. Brackin is not guilty," Mr. Evans said.
The three real estate agents were charged under the section of REBBA, the legislation that governs the conduct of Ontario realtors, that bans agents from accepting payments for trading in real estate from anyone other than the brokerages that employ them. Convictions under REBBA carry a maximum penalty of a $50,000 fine and two years in jail for individual agents.
The cases are due in provincial court this week to set trial dates.
In an interview, Ms. Ruan, who is jointly charged with Ms. Wang, said she plans to fight the charge but deferred further questions to her lawyer.
Leo Adler, Ms. Ruan's lawyer, said his client is not guilty. "Whatever anybody else may have done, it was not her and that she will vigorously defend the charge," he said.
When contacted by The Globe and Mail, Ms. Wang said she didn't understand and hung up the phone. Her lawyer, Howard Rubel, declined comment on the case because it is before the court.
RECO said it received a total of five complaints related to new-home presales earlier this year. One complaint is still under investigation and investigators were unable to proceed on another because of a lack of co-operation from the complainant, a RECO spokesman said.
Mr. Brackin, Ms. Ruan and Ms. Wang were charged in July but RECO did not publicize the charges until The Globe asked if it had received complaints about presale practices. The Globe chose not to publish the agents' names until RECO provided documentation outlining the charges. RECO initially said the realtors were charged in relation to condo presales, but Mr. Brackin's case is related to sales of detached houses.
A senior RECO official said some of the complaints were sparked by a recent Globe investigation into the system of exclusionary preconstruction sales that has quietly become standard practice in the GTA's condo market. In addition, an article in the Chinese-language newspaper Sing Tao about so-called entry fees also resulted in complaints.
The Ontario government has said it is considering a review of preferential sales practices for preconstruction homes as part of its wide-ranging policy changes for the housing market, which will include a review of REBBA.