QUICK HITS

 

• On Jan. 16, BCFSA confirmed B.C. Realtor, Ismail Jamal Jinnah, lost his license and was fined $10,000 after investigators found he manipulated a “vulnerable” client into selling her home.
• The investigation revealed Jinnah exploited a close personal relationship, pressured the client against her wishes and misled regulators about the nature of their relationship.
• In addition to the fines and license cancellation, Jinnah has been ordered to pay $67,000 in enforcement expenses.

A B.C. Realtor has lost his license and is facing a $10,000 fine after the province’s regulator found he manipulated a client into selling their home.

Ismail Jamal Jinnah behaved in a “predatory” manner when he took advantage of his personal relationship with a client to convince her to sell her home and earn an “above-market” commission, according to a December decision from the BC Financial Services Authority (BCFSA).

Summary of misconduct

The case centred on two real estate transactions in 2015. Jinnah established a “close, personal relationship” with a client who owned a detached home and despite her opposition, repeatedly pressured her to sell it, advising her it was a smart financial move. Jinnah failed to disclose his personal relationship with the client and convinced her to switch properties with another individual.

According to hearing documents, Jinnah’s client “trusted him, relied upon him, and was reasonably left with the impression that Mr. Jinnah was looking out for her best interests. Rather than looking out for her best interest, Mr. Jinnah refused to accept that (she) did not want to sell her house. He pressured and manipulated her to essentially switch properties…”

Hearing Officer Thelma O’Grady says the former Realtor took advantage of his client, “who, because she was in a close relationship with him and trusted him, was vulnerable. This type of behaviour can only be described as predatory.”

The decision also highlighted Jinnah’s financial gains, which totalled $39,000 in commissions. Additionally, he charged above-market fees without sufficient explanation and failed to adequately market the property, instead selling it directly to the second individual involved.

Investigation and regulatory violations

During a subsequent investigation in 2021, Jinnah attempted to mislead the regulator by mischaracterizing his relationship with the client. The decision emphasized the deliberate nature of his deception, “Mr. Jinnah’s statements… were a deliberate attempt… to mislead the investigative process.”

Jinnah was found guilty of breaching multiple sections of the Real Estate Services Rules and the Real Estate Services Act (RESA).

Impact on client 

The misconduct, described by O’Grady as “very serious,” involved Jinnah’s failure to act in the best interests of his client, a breach of conflict-of-interest rules and a deliberate attempt to mislead regulators during the investigation. “Taking advantage of a vulnerable client who is relying on you to act in their best interest is one of the most serious types of misconduct for a real estate licensee,” the decision states.

The decision also noted the emotional and financial harm caused to the client, who suffered anxiety, depression and embarrassment “for letting herself be coerced by Mr. Jinnah.”

“The actions of Jinnah to use a close personal relationship to manipulate a client into selling their home is unacceptable and demonstrates a clear disregard for the established ethical expectations for licensees and the regulatory regime that is designed to protect consumers,” said Jon Vandall, senior vice president of compliance and enforcement at BCFSA. “This behaviour was so predatory and egregious, BCFSA is issuing the maximum penalty available.”

Fines and penalties 

In addition to cancelling Jinnah’s licence and the $10,000 penalty, Jinnah was also ordered to pay more than $67,000 in enforcement expenses.

“Sanctions should be both protective and preventative,” O’Grady wrote. “They should be aimed first and foremost at achieving compliance and secondly at deterring repeat offences… and by others in the industry or by those considering entering the industry.”

Although Jinnah hasn’t practiced real estate since March 2024, BCFSA confirmed his license had been cancelled on Jan. 16. and that the misconduct would be reflected in his professional record.

Implications for the real estate industry

“Public interest is served by setting a penalty that communicates to Mr. Jinnah, the public, and other licensees that it is unacceptable for licensees to take advantage of clients and to mislead the regulator during an investigation,” O’Grady concluded.

Jinnah has the right to appeal the decision within 30 days.

Metro Vancouver’s residential market in 2024 proved to be a mixed bag, falling short of optimistic forecasts set earlier in the year by Greater Vancouver Realtors (GVR). While some gains were seen, they didn’t reach expectations, leaving some market watchers reassessing their expectations for 2025.

Missed sales targets

GVR released its H1 forecast for 2025, including a look at how 2024’s market compared to its forecast. At the start of last year, optimism was high. GVR predicted an 8 per cent increase in sales compared to 2023, with projections reaching 28,250 transactions by year-end. Ultimately the market closed the year with 26,561 sales, a 2 per cent rise over the previous year. The momentum, initially driven by reduced borrowing costs, faltered in the summer, curtailing overall performance.

Price gains under pressure

Similarly, price growth failed to reach expectations. The average residential price was forecasted to rise by 3 per cent in 2024, reaching  $1,320,000. Instead, the actual increase was half that—1.5 per cent, with the year-end average price settling at $1.3-million. Early gains in the year were eroded by growing inventory levels and weaker-than-expected sales.

“Despite numerous cuts to the Bank of Canada’s policy rate and subsequent reductions to borrowing costs throughout 2024, supply continued to outpace demand by year-end, eroding, but not fully erasing, the price gains which began the year,” the report notes.

Looking ahead to 2025

With 2024’s shortfalls as a backdrop, GVR’s forecast for 2025 maintains cautious optimism. Key drivers such as population growth, household formation and lower borrowing costs are expected to support the market. Political and economic uncertainties—including potential U.S. trade policies pose a risk to the housing market

Risks and wildcards

GVR’s modeling suggests that based on “preliminary analysis” proposed U.S. tariffs on Canadian goods, if implemented, could create a drag on sales activity. The impact is expected to be short-lived, and “any negative impacts to home prices are likely to be modest and would most likely arise through the (potential) reduction in sales activity, rather than through any direct impacts arising from the tariffs themselves.”

Canada’s inevitable federal election could also derail GVR’s outlook for the region. “Political turmoil at the Canadian federal level along with the potential for a new Conservative government could yield policies negatively impacting the housing market, though new policies could also positively impact the market as well.”

Outlook for 2025

GVR economists see improved momentum heading into 2025 compared to last year, with lower borrowing costs anticipated to support demand.

“Our price forecasts for 2025 are again similar to those we expected in 2024, however the market now has the benefit of significantly lower borrowing costs to start the year than were available in 2024, which we believe should provide the necessary stimulus to reach our 2025 price forecasts.”

Residential sales are expected to reach 30,250—a 13.9 per cent increase over 2024, while the average home price is projected to grow 4.1 per cent—reaching $1,354,000. 

As with most forecast’s, GVR’s outlook for the year comes with a key caveat: a stronger-than-expected economic recovery could accelerate sales and price growth, while heightened inventory levels or recessionary pressures could dampen performance.

Alan Hu/pacificevergreenrealty.com

The Supreme Court of British Columbia has ordered Alan Hu, a Surrey-based Realtor, to surrender his profits from the sale of a $3.35-million property after breaching his fiduciary duty to a client.

According to a court decision published on Jan. 10, Pei Hua Zhong, a Chinese immigrant of “modest means,” hired Hu to sell his South Surrey, B.C. home and purchase a new property in Surrey in 2017. Zhong signed a contract to buy a property listed for $2.1-million, conditional on securing the down payment by selling his current home.

When his home failed to sell by the subject removal deadline, Zhong decided to pursue bridge financing, planning to use the equity in his existing property to secure the down payment.

While Zhong prepared a second offer of $2.05-million, Hu referred his friend Lingxia Tao, who was vacationing with him in Las Vegas, to another real estate agent to compete for the same property. Zhong was not made aware of the referral. Tao’s offer, submitted with Hu’s assistance, included a clause allowing her to assign the contract to a third party.

In January 2018, the seller accepted Tao’s bid of nearly $2.1-million, cutting Zhong out of the deal. According to court findings, Hu later acquired the property through an assignment from Tao and in 2021, sold the property for $3.35-million— a profit of more than $1.2-million. 

2038 174 St., Surrey B.C., Image source: homesbyalan.ca 2017

In her decision, Judge Amy Francis wrote that Hu “intentionally undermined Mr. Zhong’s bid to purchase the 2038 (174 Street) Property so that he could take an interest in the 2038 Property for himself,” describing his actions as a “marked departure from ordinary standards of decent behaviour,” and “deceptive and underhanded.”

Hu’s failure to act in client’s best interests

She emphasized that a Realtor’s core responsibility is to act loyally and transparently in the client’s best interests. Hu violated this duty when he shared Zhong’s bid with Tao, facilitated her competing offer and ultimately acquired the property through a contract assignment.

Justice Francis found that Tao relied on Hu for instructions and she was not held legally liable.

While litigation regarding the profit split from the sale between Hu and Tao is ongoing, the court has ordered Hu to disgorge all “ill-gotten gains” from the sale​.

Insurance and regulatory implications

In February 2022, Hu submitted statements to the Real Estate Errors and Omissions Insurance Corporation, though intentional misconduct like fraud typically falls outside the scope of coverage. The B.C. Financial Services Authority, which oversees real estate agents in the province, is reviewing the judgment and considering regulatory action.

In addition to surrendering profits, Mr. Hu must also repay the $19,000 referral feed he took for the original purchase of the Surrey property. 

Sunshine Coast, B.C. (Canva)

QUICK HITS

 

• Two B.C. Realtors were fined over $200,000 for failing to disclose key restrictions in a 2017 waterfront property sale on the Sunshine Coast.
• Acting as dual agents, they marketed the cabin as “legal non-conforming” without informing buyers of its seasonal-use limitations on Crown foreshore land.
• The B.C. Financial Services Authority found their actions misleading, ordering penalties and remedial education for violating disclosure and client care standards.

Two Realtors in B.C. are facing more than $200,000 in fines for failing to disclose information to clients related to a 2017 oceanfront property sale on the Sunshine Coast. 

According to a consent order by the B.C. Financial Services Authority (BCFSA), Joel Patrick O’Reilly and Denise Anne Brynelsen with Royal LePage Sussex in Sechelt acted as dual agents, representing both the buyers and sellers in the sale. 

Property in question

The waterfront property included an 800-square-foot cabin and a dock, both built on Crown foreshore land in Pender Harbour, B.C. Foreshore land, the area between high and low tide, is subject to strict provincial regulations. 

According to the consent order, the cabin had initially been built as a shed in the 1960s. Over time, the previous owners remodelled it into a residence, without obtaining permits. In 2010, the sellers signed a tenure agreement with the provincial government, acknowledging that the cabin was only allowed to be used as a seasonal residence. The government had also communicated that the foreshore tenure was temporary and subject to renewal or revocation.

The sellers did not share this information with the agents at the time of listing.

Professional misconduct

O’Reilly and Brynelsen eventually learned of these restrictions, not through the sellers, but through an inquiry on behalf of a prospective buyer. A foreshore tenure consultant confirmed the cabin was “not legalized” and classified as a “non-conforming use,” and “that structures on Crown foreshore are generally not approved.” 

Despite being made aware of the cabin’s non-conforming status through a government email in 2017, O’Reilly dismissed these concerns, writing in an email to the sellers he thought there was “zero chance of a government agency removing the cabin.”

The agents marketed the cabin as “legal non-conforming” without disclosing the provincial restrictions or the seasonal limitation. On MLS, the property was described as “freehold nonstrata” and highlighted the cabin as a “completely renovated beach cottage.” 

According to the consent order, the buyers, who eventually purchased the cabin for $900,000, asked about foreshore tenure and the possibility of rebuilding. The agents assured them that the tenure transfer would be straightforward and that the cabin’s legal non-conforming status allowed rebuilding within its existing footprint.

After the sale

After the sale, the provincial government refused to transfer the foreshore tenure to the new owners until the cabin was removed. The buyers filed a complaint with BCFSA in 2019, ultimately building a new home on the property in 2023.

In the consent order, O’Reilly and Brynelsen admitted to advertising the property with “false and/or misleading representations” and failing to disclose “material information” regarding the cabin’s use. They also admitted to providing inaccurate information to the buyers and neglecting to conduct necessary verifications about the property’s restrictions.

As a result, the agents were found to have violated the Real Estate Services Act’s requirements for accuracy, honesty and client care in advertising, disclosure and due diligence. 

They each agreed to pay a $100,000 penalty and $2,500 in enforcement costs to BCFSA, and are required to complete a real estate trading services remedial education course.

“The licensees’ failure to disclose information was harmful to their clients”

“It is imperative that licensees disclose all pertinent information to their clients about a property or transaction,” said Jonathan Vandall, BCFSA’s senior vice president of compliance and enforcement in a press release. 

“In this case, the licensees’ failure to disclose information was harmful to their clients. The penalties handed down are reflective of the severity of their misconduct and serve as a reminder to all real estate licensees about the importance of disclosing crucial information to clients.”

The federal court has given the green light for a class-action lawsuit alleging price-fixing and anti-competitive practices in the GTA’s real estate industry to proceed. 

The lawsuit, first filed in April 2021 on behalf of Toronto resident Mark Sunderland, names seven of Canada’s largest brokerages, along with the Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB). It accuses them of engaging in activities that artificially inflated realtor commissions.

The court documents allege that the defendant brokerages entered into an illegal agreement that artificially inflated buyer brokerage commissions. According to Sunderland, he was forced to pay the standard commission to the buyer’s agent and their brokerage when selling his home. The case further contends that CREA and TRREB played a role in facilitating this arrangement.

Federal court’s decision

On Sept. 25, Chief Justice Paul Crampton allowed the class-action lawsuit to proceed despite the defendants’ attempts to have the claim struck down due to a perceived lack of merit. The lawsuit seeks to represent individuals who have sold residential real estate through TRREB’s MLS since Mar. 11, 2010.

“Housing in the GTA has become unaffordable. Part of the reason is the real estate industry itself, whose rules impose additional costs on real estate sellers,” says Garth Myers, partner at Kalloghlian Myers LLP, the law firm responsible for filing the lawsuit. “This industry needs to change to align with Canada’s laws. Sellers should not be burdened with paying for buyers’ realty services. If this case succeeds, it will have industry-wide ramifications, potentially decreasing the cost of housing for everyone.”

Setting a precedent

When asked about the broader implications of the case, Myers shared, “If Chief Justice Crampton’s decision is upheld, industry associations in different sectors may have to reassess their rules imposed on their members to ensure they don’t constitute illegal controls over the price of goods. This case differs from the traditional ‘smokey room conspiracy’ and may lead to other industry associations reviewing their practices in light of Canada’s price-fixing rules.”

Potential compensation

Myers mentions that they have been contacted by many sellers in Toronto who believe they were impacted by this alleged behavior. In terms of potential compensation, Myers shares, “The amount of residential real estate sold in the GTA over the last 13 or so years is staggering. Based on our research and the experts we’ve consulted, the overwhelming payment to buyer brokerages is about 2.5 per cent of the sale price. If that amount were substantially reduced, the overcharge for buyer brokerages would have been significant.”

Both TRREB and CREA declined to comment, with a spokesperson for CREA telling Real Estate Magazine in an email, “As this matter is still before the courts, we continue to believe the claims against TRREB, CREA, and other defendants are without merit, and we will continue to defend our members in this case.”

The official numbers, widely quoted and relied upon for policy planning, are underestimating the NPR population by nearly one million individuals. This revelation, brought to light by CIBC Capital Markets’ Managing Director and Deputy Chief Economist, Benjamin Tal, sheds new light on another factor impacting the country’s housing supply and affordability.

The implications

Tal notes forecasting population growth is a challenging yet essential endeavour as it impacts resource allocation and housing planning across provinces and municipalities. 

“What if 10 years ago, we had known that Canada’s population would reach 40.2 million in 2023? We probably would have been better prepared, and the size of the housing shortage would have been smaller. But we didn’t know,” Tal points out. 

Canada’s population projection for 2023 was off by a staggering 1.1 million, primarily due to an unexpected surge in NPRs and stronger-than-expected immigration, which, as Tal explains, translates to a housing demand miscalculation equivalent to over two years of building capacity. However, the economist’s analysis suggests that the actual gap might be even more significant.

“Things happen. Government policies and priorities change. But two measurement issues related to the counting of NPRs suggest that the size of the miss might be closer to 2.5 million — a full million larger than the reported miss.”

The census conundrum

Tal delves into the heart of the issue, uncovering a significant gap in the NPR counts reported by Statistics Canada. The 2021 census indicates roughly 925,000 NPRs, while quarterly estimates point to around 1.17 million. 

Statistics Canada has previously acknowledged this discrepancy, Tal explains, as the 2011 census undercounted NPRs by more than 40 per cent. “Back then, the absolute number of NPRs was relatively small, so the undercounting did not have profound implications on population growth and housing market demand planning, unlike today’s situation.”

Although the gap has decreased to around 20 per cent, the absolute increase in NPR numbers in recent years has widened the divide once again, potentially reaching a shortfall of approximately 250,000 in 2021.

Tal explains two key factors contributing to this phenomenon: the inherent hesitance of students from certain countries to engage with government authorities hinders accurate reporting, and, secondly, the census’s methodology inadvertently excludes temporary foreign workers and student visa holders who struggle to navigate census instructions.

The unseen “overstayers”

Another crucial aspect emerges as NPRs’ “temporary” status becomes more permanent than expected. Statistics Canada’s exit assumption — that temporary residents (TR) would leave within 30 days of visa expiry — is proven inaccurate. A staggering 60 per cent of international students express a desire for permanent residency, leading to an increased number of overstayers. This trend is compounded by changes in work visas and growing employment opportunities, driving many NPRs to extend their stay while waiting for an invitation through the Express Entry Program.

Tal points out that there is no known administrative action by Immigration, Refugees and Citizenship Canada to remove these expired visa holders from Canada, nor a known mechanism to withdraw their employment or tax slip issuances by the CRA.

During the height of the pandemic, 2020 and much of 2021, expired TR visa holders were stranded due to travel restrictions, defying the anticipated exit timeline. In subsequent years, a significant proportion remained in Canada despite the reopening of international borders. 

The hidden million

When tallying the undercounted NPRs and overstayers, the discrepancy reaches close to one million individuals. Though, as Tal notes, there are no official statistics available. 

This revelation has significant implications for Canada’s housing affordability crisis, painting a graver picture than initially perceived. As policymakers and planners rely on these official numbers for decision-making, the shortage of available housing resources becomes even more pronounced.

A call to action

The economist writes, “The practical implication of that undercounting is that the housing affordability crisis Canada is facing is actually worse than perceived and calls for even more urgent and aggressive policy action, including ways to better link the increase in the number of NPRs to the ability to house them.”

Tal’s findings emphasize the urgency of reevaluating policy responses to address the hidden housing demand driven by NPRs. With the upcoming federal government’s fall fiscal update, he’s calling on bureaucrats to tackle this issue head-on and unveil a comprehensive strategy that aligns housing supply with the growing number of NPRs.

An estimated 31 million people registered for tickets to Taylor Swift’s Eras Tour in Toronto. Among the fortunate few to snag tickets was realtor Justin Bregman. However, instead of reselling them to turn a profit or locking them away until the November 2024 show, he saw an opportunity in the staggering demand for Swift’s world tour.

So, he decided to give the tickets away. 

Capitalizing on the demand for Taylor Swift tickets

The realtor’s goal was twofold: to expand his professional reach and create an unforgettable experience for someone who would appreciate the concert (admittedly, he is not the “biggest” Swiftie). 

Bregman’s plan to grow his social media presence succeeded beyond his expectations. Working with his assistant, he organized a contest that garnered remarkable attention. Nearly 19,000 participants entered the contest, contributing to a staggering total of around 150,000 entries. The contest closed Aug. 21, and Bregman is happy to report that the mother of a young teenager walked away with the tickets.

 

 

 

 

 

 

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A post shared by Justin Bregman & Associates (@justinbregmanrealestate)

A history of success 

Bregman is no stranger to success, leading Justin Bregman and Associates (that includes a team of 10 agents), he ranks among TRREB’s top performers. Despite a year marked by economic uncertainty and rising interest rates, Bregman’s team has already completed 73 transactions in 2023. Last year, they completed 113. 

Converting new followers into leads

The contest’s impact extends beyond the thrill of securing the coveted concert tickets. Even after the dust has settled, Bregman says his Instagram followers have increased by 300 per cent. 

When asked how he plans to convert some of these new followers to leads, he notes that he’s already seen over 7,000 new subscribers to his newsletter (five contest entries were given to those who signed up). He isn’t worried about confusing Instagram’s algorithm or signing a new client tomorrow; Bregman is playing the long game, “It’s a marathon, not a sprint,” he reminds us.

His primary objective is to build relationships and make “meaningful connections” by introducing himself and sharing insights into how his team does business.

Nurturing relationships and building a strong pipeline 

“It’s about building a career. You never know when business is going to come,” the realtor explains. “You have to build a strong pipeline so that you have constant leads working for you. You can’t rely on one deal to make your year.”

In Bregman’s perspective, having multiple ongoing deals lessens the impact of one unsuccessful deal; the abundance of opportunities outweighs the disappointment. His approach is to establish a solid foundation of connections.

Reflecting on his beginnings, “My first year in the business, I did 75 leases and no sales.” In the years that followed, he estimates the vast majority of those lease clients transitioned into buyers, who eventually became sellers of their first properties and buyers of subsequent ones. 

“I look at every client as a lifetime relationship, and you won’t only do business with them… they’re also hopefully going to refer you their siblings, parents, kids, friends, cousins, et cetera.” 

Innovative marketing strategies

In terms of future plans, Bregman shared, “I don’t know if there has been a hotter topic (than Taylor Swift) that would garner this demand ever again.” While replicating the exact success of this campaign might prove challenging, Bregman remains committed to innovative approaches that bridge the gap between his real estate prowess and engaging marketing strategies. 

A prime example is an upcoming event, where Bregman plans to host an afternoon ice cream truck extravaganza in sought-after Toronto neighbourhoods, offering sweet treats while showcasing his listings and establishing connections with potential clients.

Bregman adds, “It goes back to our marketing strategies to get the ultimate results and the benefit as well to be able to meet so many more people.”

Keller Williams is revealing significant changes are coming to its profit share program for former agents who left to work for a competitor. 

On Aug. 16, during a company event in Texas, the franchisor’s International Associate Leadership Council (IALC) voted to revise its profit share distribution policy. As a result of this change, all vested agents actively competing with KW brokerages will experience a reduction in their profit share allocation from 100 per cent to 5.0 per cent.

The company defines “actively competing” as when an agent or associate leaves a Keller Williams brokerage and joins a competitor. Vested agents that don’t actively compete with KW will not be affected.

In a letter to company leaders, Marc King, president of KW, says the changes were made to align “more closely with our core principles and fostering continuous growth” within the company. 

Provisions for returning agents

The revised policy’s effective implementation date is “on or before” Jul. 1, 2024; it includes a provision allowing agents to restore their profit share to 100 per cent if they rejoin KW within six months of the effective reduction date. 

“This change to Profit Share highlights our commitment to supporting those who continue to grow and journey with us,” King writes in his letter.  

Background and context

In 2020, KW introduced changes to its profit share program, altering agents’ vesting timelines. Agents joining after Apr. 1, 2020, required seven years to vest, and if they leave for a competitor, they lose profit share entitlements. These changes were not retroactive, thus not affecting those who joined before Apr. 1, 2020. The recent IALC decision predominantly affects agents vested before April 2020.

The profit share system, a cornerstone of KW’s framework, traces its origins back to 1986 when Gary Keller and the first Associate Leadership Council introduced it. 

Under this framework, individual Keller Williams market center owners allocate approximately 50 per cent of their office’s monthly profits to associates who have played a role in the business’s growth.

According to a KW spokesperson, the company has dispensed more than $1.58 billion USD in profit share since the program’s launch.

As of Jul. 31, 2023, KW has nearly 4,800 agents across Canada.