Real eState
Ontario moves to ban use of non-disclosure agreements in real estate transactions – The Globe and Mail
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New language will be added to the Trust in Real Estate Services Act code of ethics regulations in Ontario in April to make it clear that settlements of disputes still allowed, but a client must still be able complain to the Real Estate Council of Ontario.MARK BLINCH/Reuters
Confidentiality clauses, or non-disclosure agreements, are increasingly found in all manner of legal agreements Canadians enter into, but as of April 1, 2023, Ontario real estate professionals will be restricted from using them when settling a dispute with a client.
To advocates pushing for an end to the widespread use of non-disclosure agreements (NDAs) the changes are welcome, but for an industry where reputation is a valuable currency it could raise the stakes for realtors facing complaints or business disputes.
“One of the main reason [any party] wants to settle is they don’t want their dirty laundry in public,” said Gosia Bawolska of Cadence Law. Ms. Bawolska said she can see both sides of the issue. “[As a homebuyer], I wouldn’t want to hire a realtor with six settlements … but if I were the lawyer acting for [a realtor] I would still want to have the ability to use a confidentiality clause.”
That ability will be circumscribed as of as of April in Ontario when new language will be added to the Trust in Real Estate Services Act code of ethics regulations to say registered salespersons and brokers will not “obstruct or attempt to obstruct any person from making a complaint to the registrar.” It goes on to make it crystal clear that settlements are still allowed, but a client must be able complain to the industry regulator – the Real Estate Council of Ontario (RECO) – about it.
“Though real estate agents and brokerages have resolved consumer issues directly for years, just as any other business does, this makes it clear that those resolutions cannot include an obligation to withdraw a complaint, not file a complaint or to not provide evidence to RECO,” said RECO registrar Joseph Richer in a statement. “The new provision follows existing case law and other regulated sectors that have similar provisions. … This will help further strengthen consumer protection and allow consumers to do what’s right and inform the regulator.”
NDAs have been much in the news lately with the revelations around secret Hockey Canada sexual assault settlements. There has been a push in several industries to limit the use of NDAs when it comes to assault or harassment claims.
According to Julie Macfarlane, a professor emerita in the law department at the University of Windsor, NDAs were widely used in the technology sector in the 1980s. While Ms. Macfarlane still sees the value in intellectual property protection, she argues that confidentiality that shields potential bad actors from scrutiny has the effect of making misconduct a trade secret.
“I’ve certainly seen cases where people are told they cannot complain to the regulator, I’ve come across this in healthcare,” said Ms. Macfarlane, who is the founder of the Can’t Buy My Silence campaign aiming to restrict NDA use in Canada and the world.
She has advised several provincial governments on new laws that will restrict NDAs specifically that aim to cover up bullying, harassment and abuse, with Prince Edward Island passing the first legislation while Manitoba and New Brunswick have also tabled bills.
On Feb. 9, The Canadian Bar Association passed a non-binding resolution on NDAs that it said would “discourage their use to silence victims and whistleblowers who report experiences of abuse, discrimination and harassment in Canada.” Ms. Macfarlane said that’s a signal as to where the profession is moving on the subject.
While case law in Canada is very limited on the enforceability of such clauses, in the U.S. courts have begun to strike them down on a number of grounds: “For vagueness, exploitation, clear unequal bargaining, for public policy reasons where public safety is involved,” Ms. Macfarlane said.
For working realtors, threats of lawsuits or complaints to the regulator are not unknown.
“Have we been sued? Yes. Has it gone anywhere? No. Whether they were right or wrong, there have been instances of settlement and NDAs or releases,” said Andre Kutyan, a broker with Harvey Kalles Real Estate Ltd. Over 18 years in the business he’s seen everything from clients trying to back out of deals to agreements of purchase and sale that included chattels – one time it was a central vacuum system – that weren’t there at closing time. When calculating the likely cost of legal fees or insurance deductibles to fight with an upset client in court, a settlement sometimes makes the most business sense.
But will they still make sense if a realtor is settling over conduct that could still be reported to RECO?
“It may rub people the wrong way if they enter into an agreement, put a stop to the issues between them and then one side turns around and reports the other party to RECO,” said Daniel Waldman, a lawyer and real estate litigator with Dickinson Wright. “When they enter into a settlement and/or release, the intention of the agreement is to bring finality to the issue and close it off. That is why they are meant to be kept confidential, as it is supposed to be the final word on the matter, just between the parties who enter into it.”
There are still many industries that allow the use of confidentiality clauses. But Ms. Macfarlane argues Canadians shouldn’t just accept that silence is a condition of settling any claim.
“People sign [NDAs] because they are being told they must sign to get a settlement. That’s actually not true,” she said. “If you think about it rationally, the party that wants the NDA is the same party that doesn’t want to bring this into court, that doesn’t want to be in the public domain in any case. It’s a bluff.”
Western Investor is famous for the breadth of its commercial real estate listings. It is perhaps the only publication in Canada where investors can find a high-rise office tower, a remote waterfront lodge, a golf course, an industrial warehouse or a small-town bowling alley for sale within its pages.
We often have unique listings and there are three this month that stood out.
First is an entire city block for sale in downtown Calgary.
The 2.83-acre site borders the popular East Village, and the land is rezoned for a high-density mixed-use project with a generous floor-ratio-area (FAR) of 20.
Flexible commercial zoning allows for residential rentals, condos or hotel and a variety of commercial uses. Current visions include four high-rise towers, but all options are on the table. It is listed by Goodman Commercial, Vancouver, and NAI Commercial, Calgary, at an asking price of $32.4 million.
Second is a rare listing in B.C.’s Central Okanagan.
The property is the 11.3-acre Vibrant Wine vineyard estates in east Kelowna. The property includes a luxury 9,000-square-foot Italian-style villa. The eight-acre vineyard was named the No.1 winery on Trip Advisor and its product was ranked the Best White Wine in the World in 2013. A proven venture that can be expanded, the entire property and equipment is co-listed by HM Commercial and Jane Hoffman Realty, Kelowna, at $13.5 million.
Third of the unique listings is a productive gold mine.
With a private residence and a two-title acreage in the Cariboo, the property covers 3.2 acres near the original Gold Rush town of Likely, B.C.
The land includes an updated three-bedroom house, but the attraction is the operating gold mine. A two person operation on a five-year renewable permit that covers a 100-acre bench, only nine acres have been worked so far, but there has been a consistent average return of 1 ounce of gold per 100 yards mined, with the highest return of 8 ounces in under 100 yards. Note: the price of gold now is around US$1,980 per ounce. The entire operation, including all the mining machinery, is listed by 3A Group, Re/Max Nyda Realty in Agassiz, B.C., at $1.45 million.
Real estate experts paint a cautiously optimistic outlook after a year of downward market trends across the country.
Trends in Simcoe County show an increase in viewings and buyers re-entering the market after key interest rate hikes from the Bank of Canada warded off many last year.
Lance Chilton, the broker of record at Re/Max Hallmark Chilton Realty, calls the local market “more or less balanced.”
“Inventory conditions are the same as they once were in 2018,” he noted.” From 2020 to 2022, prices rose to about 43 per cent, which was rather rapid.”
Chilton said key interest rate hikes eventually bottomed out the local market by about September – that’s when home prices that peaked at around $1 million dropped to about $730,000.
“Since then, it’s recovered by about five per cent,” Chilton said. “In fact, we actually saw showings increase for the first time in about six months.”
The Barrie and District Association of Realtors (BDAR) confirms that showings have picked up again, with people getting that “spring fever.”
However, the one key issue that remains is low inventory.
“We saw prices dip because of interest rates and people pulling out of the market, but we never saw that supply come back online,” said Luc Woolsey, BDAR president, adding the situation creates multi-offer bids.
“So there’s still a lot of people having to come in firm, waiving conditions and inspections because they’re having to compete.”
Real eState
‘Million Dollar Listing’ star warns CA mansion tax will deliver ‘hardest hit’ to market since 2007 – Fox Business
‘Million Dollar Listing’ star and agent Josh Altman discusses the impact of California’s housing policy and homeless crisis on the state’s real estate market.
Though it’s home to some of the most luxurious and expensive real estate listings in America, California is readying to pass a housing bill that one “Million Dollar Listing” agent warned could create the “hardest hit” to the market since the 2007-08 crash.
“In about ten days or so, there’s a measure called the ULA measure that’s going to go into effect, which is going to be probably the hardest hit to the real estate market that we’ve seen since 2007,” broker and television personality Josh Altman said on “Varney & Co.” Monday.
Altman’s comments come in response to the recently-passed “United to House L.A.” (ULA) measure in California, which adopts a so-called “mansion tax” on property sales or transfers over a certain value to pay for affordable housing.
Properties sold above $5 million but below $10 million are subject to a 4% sales or transfer tax, while properties that sold for more than $10 million will face a 5.5% tax, according to the city clerk’s voter information pamphlet.
At least 92% of taxpayers’ money would “fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program,” the pamphlet also clarified.
California’s “United to House L.A.” measure will create “the hardest hit to the real estate market” since 2007, “Million Dollar Listing” star Josh Altman said on “Varney & Co.” Monday. (Getty Images)
“The way that this ULA measure was passed is just mind-boggling to me,” Altman added, “and I think it’s one of the most ridiculous bills that I have ever seen in my entire 20-year career.”
The Los Angeles city administrative officer estimated the proposed tax could generate $600 million to $1.1 billion in revenue each year. However, he noted it would “fluctuate” based on how many property transactions with values within the scope of the tax actually occur.
While those who support the measure argue it could help solve L.A.’s housing affordability and homeless crisis, others like Altman caution the tax policy would lead to higher home prices and bureaucracy.
Managing partner of 8VC Joe Lonsdale joined ‘Fox & Friends’ to discuss how the tax would affect America’s most wealthy and why the state is a ‘total mess.’
“Think about these people that bought houses three years ago for $5 million and they want to sell now,” Altman hypothesized. “The market’s down, rates are up, that happens. But now they got to cut a check for $200,000 out of their own pocket because there’s no profit on that. So it’s really going to rock the real estate market that we’re in here in Los Angeles.”
California’s real estate market, the “Million Dollar Listing” star further argued, is on “a race to the bottom” over the next 10 days as buyers try to close deals before the mansion tax is enacted.
Josh Altman of “Million Dollar Listing” warns California’s “mansion tax” will “trickle down” to working and middle-class households. (Getty Images)
“I’m seeing deals get done that should never have gotten done,” the L.A. agent said. “I’ve even done as much as, on a $28 million listing that I have, we have offered a $1,000,000 bonus for anybody who buys and closes before April 1.”
The “main issue” with the ULA measure remains its “trickle down” effect — not on mansion or luxury homeowners, but on working and middle-class California families.
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Josh Altman spoke to FOX Business about the luxury real estate market and the impact of the new “mansion tax” in Los Angeles.
“People who voted who said, ‘Oh, I don’t have a $5 million house,’ which by the way, is not a mansion in L.A., we’re talking about a four-bedroom, 4,000 square-foot house in L.A. is $5 million, so this isn’t a mansion tax,” Altman said.
“This isn’t a $30, $40, $50 million house tax – these are regular people that work bill to bill, that have to pay their mortgage just like everybody else, and now they’re being penalized here.”
FOX Business’ Aislinn Murphy contributed to this report.
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