KITCHENER — Ontario's real estate association is calling on the province to fix the industry's "broken" disciplinary system in the wake of a high-profile case involving a Cambridge broker.

Tim Hudak, CEO of the Ontario Real Estate Association (OREA), is urging Government and Consumer Services Minister Lisa Thompson to stop what he says are regulatory decisions that undermine "the profession as a whole."

"I hope one of the first things you do is fix the broken real estate disciplinary system in Ontario," Hudak wrote, in an open letter to Thompson.

Hudak's comments come after broker Steve Bailey was recently fined $30,000 for admitting to multiple breaches of the code of ethics that govern the real estate industry.

The Real Estate Council of Ontario, the self-governing body that regulates the industry, decided early on that Bailey's licence would not be impacted — a controversial decision that OREA says highlights flaws in the regulatory system.

"Individuals whom have been found guilty of serious ethical violations and illegal activity should have no place in the real estate profession," said Hudak, the former leader of the Progressive Conservative Party of Ontario.

"It is understandable that when real estate professionals break the rules, violate the trust of Ontario consumers and behave in a manner that reflects badly on the entire profession, Realtors get angry."

Hudak's association argues discipline decisions such as those made in the Bailey case have "devastating effects" on both the profession and consumer confidence.

OREA has been calling for changes to the way discipline is handled in the real estate industry for years. It's asking for three changes to the Real Estate and Business Brokers Act, 2002 (REBBA).

First, it says RECO's Discipline and Appeals Committee should have the power to suspend and revoke licences — something that currently only the province's Licence Appeal Tribunal can do.

In Bailey's case, RECO decided early on not to pursue discipline against the broker through the tribunal, considering him a "first-time" offender despite there being multiple complaints against him.

"It is time to end LAT's weak oversight of the real estate sector," Hudak said. "LAT has had a demonstrably poor track record of punishing those who break the rules, even in circumstances involving criminal behaviour."

Giving RECO's discipline committee the ability to impact a Realtor's licence would be a powerful deterrent to those who want to break the rules, the association says.

"This will be a far more direct and therefore, a more effective way of dealing with those more serious REBBA violations," Hudak wrote.

OREA also wants to eliminate what it sees as financial incentive for bad behaviour. The association argues RECO should be given the ability to order a registrant to repay either all, or a portion of, any financial gain that comes from a breach of the REBBA Code of Ethics.

"Under the current system, determined rule breakers treat existing penalties simply as the cost of doing business and not as a deterrent," Hudak's letter says.

Finally, OREA says the regulator needs to be more proactive in investigating those who are breaking the rules. It argues the existing enforcement model is complaint-driven and limits RECO's ability to investigate proactively.

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"If implemented, these three changes would go a long way to sending a powerful message that the provincial government will not tolerate unethical activity in such a critically important part of Ontario's economy — the real estate sector," Hudak said.

gmercer@therecord.com

Twitter: @MercerRecord