An Ottawa entrepreneur who pleaded guilty to fraud charges over fudged car loans in 2009 is back in court — this time as a plaintiff accusing three trade associations of trying to damage the reputation of his latest venture and exile the self-styled disruptor from the real estate industry’s established turf.
Michael Ryan O’Connor, who’d previously run into legal trouble as the owner of a chain of used car dealerships in Ontario and Quebec, is currently the founder and CEO of Unreserved, an online real estate auction platform that allows people to buy and sell homes like an outsized eBay.
In a civil suit filed mid-July, O’Connor’s company alleges the Ottawa Real Estate Board (OREB), Ontario Real Estate Association (OREA) and Canadian Real Estate Association (CREA) made defamatory statements about Unreserved in an attempt to scare consumers away from the outfit’s novel approach to selling homes.
It also alleges the three organizations — which together represent and oversee every registered real estate agent and broker in the nation’s capital and run the exclusive central listing network for properties known as the Multiple Listing Service (MLS) — unfairly lobbied regulators to close a decades-old legal exemption essential to Unreserved’s operations.
OREB, OREA, and CREA have all stated they believe Unreserved’s claim is without merit.
None of the allegations have been proven in court.
Real estate for sale signs are shown in Oakville, Ont., in 2018. Together, CREA, OREA and OREB represent all real estate agents and brokers, operate the Multiple Listing Service (MLS) and maintain an effective monopoly over the real estate industry. (Richard Buchan/Canadian Press)
Meanwhile, CBC has uncovered court documents dating back more than a decade, detailing how the province once revoked O’Connor’s licence as a motor vehicle salesperson, after he pleaded guilty to two counts of fraud related to inflating buyers’ incomes to help them qualify for used car loans they couldn’t afford. The RCMP raided one of O’Connor’s Find-A-Car dealerships and built a case against him after hundreds of customers complained about unmanageable debt in 2007.
“I paid the price. I lost everything,” said O’Connor, who performed community service and served six months’ house arrest as part of his conditional sentence.
O’Connor said he believes he has since rebuilt his credibility — first by pivoting to an online dealer-to-dealer vehicle auction platform, and now a similar model for real estate.
As the new legal battle brews, real estate law experts say the current case reveals several competing interests — consumers’ desire for greater price transparency in an era of sky-high home prices and blind bidding; the billions of dollars of commissions and fees at stake for real estate agents; and the limits of regulation when it comes to protecting consumers and enforcing a code of ethics within the industry.
As a result, observers say the legal fight could be pricey and protracted.
Unreserved, an Ottawa-based tech startup, purports to offer greater transparency to home buyers through transparent bidding, but operates outside the laws and code of ethics that govern traditional brokers. (Alexander Behne/CBC)
Online real estate bidding draws industry ire
Founded in 2021, Unreserved bills itself as a disruptor in the real estate industry.
The tech startup raked in nearly $34 million in venture capital in early 2022, and has purportedly auctioned more than 250 properties in Ottawa and a handful of other cities in Ontario using an unconventional method that has sparked a backlash from the traditional real estate establishment.
On the company’s website, listings ranging from $250,000 condos to million-dollar detached homes are bid on and bought in real-time auctions “with the click of a mouse,” O’Connor explained.
Prospective buyers can register bids in increments as low as $2,500, after submitting a mortgage pre-approval from a bank.
A home listed for auction by Unreserved. The company says it has sold over 250 properties in Ottawa and other cities in Ontario in its first year of operation. (Alexander Behne/CBC)
While traditional realtors are prohibited by law from sharing the contents of competing bids for a home, Unreserved allows participants to see the entire bid history.
The site is able to do this by exploiting an exemption in Ontario’s Real Estate and Business Brokers Act (REBBA) that allows auctioneers to buy and sell real estate outside of typical regulations for brokers.
The broad exemption dates back to the 1950s and was originally intended to be used to auction family farms.
OREA, one of the largest lobby groups in Canada with more than 90,000 members across dozens of real estate boards, called the auctioneers’ exemption “a loophole with frightening implications for unsuspecting consumers trying to buy a home” on its website in June.
OREA also commissioned a survey, citing “70 per cent of Ontarians support the regulation of auctioneers who would sell homes in an open bidding process.”
The association declined to grant an interview to CBC, but CEO Tim Hudak said in a statement that auctioneers trading in real estate has “serious negative consequences” for consumers.
“OREA won’t be intimidated from standing up to protect Ontario home buyers and sellers,” the statement read.
Tim Hudak, left, CEO of the Ontario Real Estate Association, appears at a televised news conference in 2018. Hudak wrote that a provincial exemption for real estate auctioneers has ‘frightening implications’ for consumers. (CBC)
The other two groups named in Unreserved’s lawsuit — OREB and CREA — have also warned consumers about using an online auction platform to buy and sell homes.
“We feel it was a collaborative effort on all fronts to pressure the government to get rid of [this exemption],” said O’Connor.
“They’re doing it all in the name of consumer protection … and when you peel the layers back, it’s just false.”
In a video posted on Unreserved’s official social media accounts, O’Connor drives a farm tractor pulling a fertilizer spreader. The video intercuts clips of O’Connor accusing the Ottawa Real Estate Board (OREB) of ‘spreading propaganda’ that has ‘a really bad smell’ about Unreserved’s stance on consumer protection with a video featuring OREB president Penny Torontow. (Instagram/Unreserved)
The civil claim alleges that OREB, OREA, and CREA contacted the Real Estate Council of Ontario (RECO), the province’s real estate regulator, and later the minister of government and consumer services to lobby for Unreserved’s business to be shut down.
OREB and CREA both declined an interview with CBC.
Billions of dollars at stake
Mark Morris, a real estate lawyer and a former instructor at the Ontario Real Estate College who is uninvolved in the case, said a court battle over the auctioneers’ exemption is inevitable because “there’s money in it.”
“If this starts disrupting the tens of billions of dollars that is real estate,” said Morris, “people will try every avenue because the cost of attempting this pales in comparison to the pot of gold at the end of the rainbow.”
Real estate educator Mark Morris says that with billions in profits at stake, the legal fight over the right to buy and sell real estate could be protracted and pricey. (Submitted/Mark Morris)
Morris added that real estate associations are naturally protective of their control on the industry like any other regulated profession, such as law and medicine.
“In fact that’s kind of their job,” he said. “They are representing a bunch of people who derive great benefit through exclusivity.”
Founder charged with fraud
This latest lawsuit is not O’Connor’s first run-in with consumer protection laws.
In the early 2000s, he ran a small chain of used car dealerships registered under the name Find-A-Car Auto Sales & Brokering Inc.
In 2007, the RCMP obtained a search warrant for the Kingston location of Find-A-Car and seized items from the premises.
O’Connor was later charged with 11 counts of fraud over $5,000, forging documents and global fraud over $5,000 following complaints from hundreds of customers who alleged they faced financial ruin after signing car loans with Find-A-Car.
With billions of dollars at stake, the battle over whether or not to allow auction platforms like Unreserved to challenge the traditional real estate establishment will likely be long and costly, according to one real estate law expert. (Graeme Roy/The Canadian Press)
The charges stated that O’Connor’s business had “knowingly [obtained] credit for people who would not qualify nor be able to repay their liability, using false statements in writing to financial institutions.”
In December 2009, O’Connor pleaded guilty to two counts of fraud over $5,000. He received a conditional sentence of two years less a day, the first six months of which were served under house arrest.
Find-A-Car ceased operations and O’Connor testified that he liquidated his inventory to pay down bank loans related to the business.
In 2011, the License Appeal Tribunal of the Ontario Motor Vehicle Industry Council (OMVIC), which regulates all motor vehicle sales in the province, revoked O’Connor’s registration, effectively stripping him of the right to sell cars.
“His past conduct gives reasonable grounds to believe he will not carry on business in accordance with law and with integrity and honesty,” wrote the tribunal in its decision.
O’Connor now says he “took full ownership of everything that happened in that business.”
“Twenty years ago I made some mistakes,” he said. “I surrounded myself with some of the wrong people.”
In 2016, O’Connor founded EBlock, an online dealer-to-dealer vehicle auction platform, and has since re-registered to sell cars.
“I was able to get a second chance and … pivot towards tech,” he said.
The business saw rapid growth and its parent company, E Automotive Inc., launched an initial public offering on the Toronto Stock Exchange in 2021 valued at more than $1 billion.
O’Connor said he sold most of his position in the company and has resigned from its board.
He would not share how much he made from EBlock, but called the profits “life changing.”
His latest business venture, Unreserved, applies a similar online auction philosophy to real estate.
WATCH | Lawsuit puts real estate auctions in the spotlight
Lawsuit puts real estate auctions in the spotlight
1 hour ago
Duration 1:41
Ryan O’Connor, founder of real estate auction company Unreserved, has filed a lawsuit against the Ottawa Real Estate Board, the Ontario Real Estate Association and the Canadian Real Estate Association, alleging they made defamatory statements and unfairly lobbied to close the exemption that allows real estate auctions. All three organizations say the claims are without merit.
Consumer protection core issue for industry
At the centre of the legal fight as disruptors like Unreserved attempt to take a share of the real estate market is consumer protection, observed another industry legal expert.
The Real Estate and Business Brokers Act — which auctioneers can bypass — is fundamentally a consumer protection law, explained David Carter, who teaches at York University’s Osgoode Hall Law School.
Operating as a broker comes with licensing, insurance and training requirements.
“The real purpose here is to make sure anyone purporting to help the public buy and sell real estate knows what they’re doing,” said Carter, “and there’s accountability when they don’t.”
Similar to OMVIC’s role in the world of auto sales, the Real Estate Council of Ontario has the power to levy severe penalties on realtors or brokers that violate its code of ethics or break the law. This can include fines of up to $50,000 and jail time up to two years less a day.
Carter adds that the auctioneer loophole is a “very broad, carte-blanche exemption.”
“So if you can fall under that global exemption, you can almost do whatever you want.”
Unreserved bills itself as a disruptor offering home buyers greater transparency, but the fine print on their website makes it clear ‘they don’t want to be tied into any representations’ about the properties they sell, says one real estate law expert. (Alexander Behne/CBC)
‘At your own risk’
The legal section of Unreserved’s website includes numerous disclaimers.
“Your use of the website is at your own risk,” states the site’s terms and conditions.
Unreserved’s purchase agreement states that properties are sold “as-is” and “with all faults.” The buyer is responsible for verifying property boundaries and for retaining their own lawyer if they are not represented by a real estate agent.
Unreserved advertises its homes as being inspected prior to the auction and includes a brief inspection report as part of each listing on its website.
In traditional home sales, buyers often include an inspection clause in their purchase offer and pay for an independent inspection themselves. Unreserved’s terms state that buyers must accept any so-called patent defects which would have been discoverable by the buyer during an inspection of the home.
“They don’t want to be tied into any representations, any warranties … anything that they can get sued on in a transaction,” said Carter.
Unreserved offers a one-year, $100,000 limited warranty for the properties sold on its site.
Unreserved’s office space on Baseline Road in Ottawa. O’Connor said the company has scaled to over 100 employees. The business secured nearly $34 million in venture capital in early 2022 to fund its growth. (Alexander Behne/CBC)
When asked about the consumer protection measures Unreserved has in place, O’Connor said that deposits from winning bidders are stored in the trust account of a co-operating brokerage.
After that, he said, the risk is low because “the lawyers are the ones that do all the work.”
“When that hammer drops, everyone washes our hands and the paperwork’s gone to the lawyers.… The lawyers are the ones that are really protecting the buyer, protecting the seller, making sure the transaction goes smoothly,” O’Connor said.
A townhome listed for sale by Unreserved. Buyers not represented by a realtor must retain their own lawyer to complete a purchase, and the auction site’s terms require they accept the property ‘as-is’ and ‘with all faults’ at the time the winning bid is placed. (Alexander Behne/CBC)
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
