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Cheated by a Realtor? Should you bother complaining?

The NBREA complaints process is a sham. That's because the current real estate laws are inadequate and not enforced. Clearly, we need improved laws and regulations for realtors.

The NBREA seem incapable of fairly adjudicating customer complaints. I know this from first-hand experience. Having been tricked by a realtor’s false advertising recently, I complained to the NBREA. I proved to them that the realtor’s ad was misleading. Regardless, the NBREA invented an apparently phony excuse, and acquitted him. His manager was a former NBREA president; maybe that’s why.

Resentment against dishonest realtors is widespread. To stop realtor dishonesty, we need better laws, and they need to be enforced. So let’s change how realtors are regulated, like this:

  1. Realtor licenses should be treated like drivers' licenses, with fines, demerit points, and realtor-license suspensions.
  2. Infractions should be adjudicated by a judge in open court, not in secret by the NBREA or the FCNB.
  3. The government should provide free legal representation to all complainants who have proof of wrongdoing.

These changes will promote honesty among realtors, which will benefit everyone, especially their customers. Realtors will benefit too, because they will get more respect if they are more honest.

 

If you perfer a short synopsis of this video, visit this link: https://youtu.be/nmsdAf1QVPU

Note that all personal identities are disguised. My purpose is not to complain about any particular realtor. Rather, my point is that the existing laws do not work and cannot work. I have proven that, for everyone to see. So let's have new, more effective laws to curb dishonesty among realtors!

Video Script

Have you ever been lied to by a realtor? Have you ever been cheated by a realtor? If so, you might feel like you want to complain. But who can you complain to? And will your complaint make any difference?

I'm going to tell you what happened to me when I tried to complain. But first, allow me to explain the basic nature of the problem with realtors, and what can be done to make things better.

One big problem with realtors is that, typically, they are more concerned about their fellow realtors than they are about you, their customer. Here's why:

A realtor will typically maintain her relationship with you as a customer only until she has collected her commission. After that, she’ll assume that you might not buy another home for decades. Even if you are dissatisfied, it won’t matter much, because she might never see you again, and there are thousands of other customers waiting to buy or sell houses. Hence, your realtor will think of her relationship with you as short-term and transactional.

In contrast, she will see her relationship with her fellow realtors as more permanent. That's because in any given geographic area, the number of active realtors is relatively small. They all know each other, and they have to network with each other to sell homes, every day, year after year. If your realtor alienates them, they might boycott her listings. As a result, your realtor’s listings will sell more slowly, her reputation will suffer, and her income will decrease. That's why realtors are careful to maintain cordial relations with their colleagues, even while competing with them.

Since networking is so important to success in real estate, realtors tend to be not just cordial to each other, but loyal to each other as well. This is not necessarily because they like their colleagues, but because they need them, and they might even fear them.

Consequently, if you complain to a real estate association about a particular realtor, they will likely rule in favor of the realtor, especially if that realtor is well-connected. This is inevitable, because realtors can't afford to alienate their colleagues. So they are incapable of fairly adjudicating customer complaints. Moreover, there are no adverse consequences for ruling against a customer. Therefore, realtors cannot be relied on to discipline any fellow realtor who is guilty of misconduct, especially if that realtor has many friends in the business.

Yet the government allows realtors to supervise themselves. This is because, at some point in the past, a number of realtors in various provinces got together and created their own private legislation. In New Brunswick, this legislation is known as the NBREA Act, and it was passed by the provincial legislature. NBREA means New Brunswick Real Estate Association.

The NBREA Act is an actual law, but it's not enforced by any branch of the government. Instead, it is supposedly enforced by the realtors’ own organization, the NBREA. They even have an established procedure for reviewing customer complaints. But in my experience, their process is a sham, because the realtors have an overriding conflict of interest. As mentioned previously, they are largely incapable of disciplining their fellow realtors, especially well-connected realtors, because they don't want to harm their own business network.

Furthermore, if you complain to the NBREA, they will review your complaint in secret. And once they’ve made their decision, you will have no right to appeal. They will say you can appeal to the Board of Directors, but that’s just a charade, as I will explain later. The secrecy of their process makes their complaints committee vulnerable to political manipulation. That’s a serious problem, which I believe I encountered myself recently. More on that later.

Anyway, by failing to discipline their own members adequately, realtors have harmed the reputation of their own profession. For example, when one realtor cheats without suffering any consequences, other realtors inevitably notice. They conclude that they too must cheat, in order to remain competitive. The resulting low ethical standards explain why distrust for realtors is so widespread among the general public.

Hence, if you complain to the NBREA, don’t expect justice. But there is one avenue of recourse. That is, you can complain to the government, if they don’t tell you to complain to the NBREA first. Anyway, in New Brunswick, the relevant government department is known as the Financial and Consumer Services Commission, or FCNB. They administer an entirely different law called the Real Estate Agents Act.

I don’t know whether the FCNB’s complaints process is fair. But it certainly is mysterious, because they don’t explain their complaints process clearly on their website. Also, if you submit a complaint, they will not provide any timeline for resolving it. Nor will they provide a tracking number. And in many cases, they won’t even tell you the final result of their investigation. So it's not clear who they are accountable to.

Again, any court that operates in secret can be vulnerable to political manipulation. Secret courts do not inspire confidence in the justice system.

In all, the whole system seems set up to discourage and frustrate complaints, rather than to keep realtors honest. So, what can be done? To start, the NBREA Act should be repealed altogether. Realtors seem incapable of regulating themselves, and they certainly have not earned the right to regulate themselves. Instead, what they really need is close supervision by the government.

Specifically, we should treat a realtor’s license the way we treat a driver's license. For example, if you break a traffic law, you can be punished with fines, demerit points, and the loss of your driver's license.

Likewise, unethical business practices by a realtor should lead to similar consequences for her, including

  • Fines
  • Demerit points
  • The loss of her license to sell real estate.
In addition, she should be required to compensate the customer for any financial loss that the realtor caused.

So, any time a customer complains and provides reasonable evidence of misconduct or negligence, the government should prosecute the realtor in a court of law. Furthermore, the government should provide a lawyer, free of charge, to argue on behalf of the customer. After all, promoting honesty among realtors is in the public interest.

As well, a person who files a complaint should be entitled to attend all of the court hearings, to testify in court, and receive a copy of all the court transcripts. Otherwise, keeping the proceedings secret would only make the process seem unfair and unaccountable. Above all, the reasons for the court’s decision should be explained in full detail, in plain English or French, to both the customer and the realtor.

This approach may seem severe, but it would help to protect the public from realtor misconduct, and it would increase everyone’s confidence in the real estate profession. Selling real estate should be a dignified profession where honesty prevails, but to achieve that, new laws and government regulations will be needed.

Here's what happened to me:

With all that in mind, I'd now like to tell you about my own experience with the NBREA’s complaints process. The dishonesty I encountered was astonishing. Moreover, the most egregious dishonesty was perpetrated by people in positions of trust and power.

To understand this better, look at this diagram of my relationship to the various people in this story. The names are changed, because there is no point in telling you who is who. After all, the kind of sordid behavior I’m going to describe to you can occur anywhere. Weak laws encourage bad behavior. So remember, anything that happened to me could happen to you too. Here's how it all started:

In 2021, while browsing realtor.ca, which is a real estate website, I came across an interesting piece of land for sale. The seller was represented by a listing agent, who I will call Lester. Lester the listing agent. Lester’s advertisement for the lot claimed that it had deeded water access. Specifically, it had “beach rights deeded just down the road”. This made the land seem especially valuable, because beach access is a feature that many home buyers want to have.

To understand this, you’ll need to know what a deed is, so here’s a short explanation: A deed is a legal document that describes what you will actually own, when you buy a piece of real estate. In some cases, a deed might include certain legal rights that were granted to a previous owner, permanently. For example, when a subdivision is created, the developer might register a written legal guarantee that anyone who buys one of the lots will have a permanent right to use a nearby private beach.

That is essentially the meaning of the words “beach rights deeded just down the road”. And this is what the realtor’s advertisement promised.

However, after I had agreed to buy the lot, and after I had paid a substantial deposit, my lawyer told me that the advertised “deeded beach rights” did not actually exist. In other words, Lester had advertised the lot falsely. So I had been tricked into paying more for the lot than it was actually worth.

Wanting to complain about this, I contacted the NBREA. They informed me that they could consider my complaint, but even if they found Lester guilty, they would not be able to compensate me financially.

Regardless, I proceeded with my complaint anyway, because if people don’t complain about dishonesty, it will only get worse.

Unfortunately, most lies are told verbally, so crimes of this sort are very hard to prove. But in my case, I was fortunate to have documentary evidence. Specifically, I had a screenshot of Lester’s misleading advertisement, in which he falsely claimed that the lot had beach access. And I had a screenshot of a letter from my lawyer, stating that no such beach-access rights existed. I submitted both screenshots to the NBREA complaints committee, along with a written complaint.

Responding by email a few weeks later, Lester did not deny that he had advertised falsely. So he tacitly admitted that he had committed a crime.

Now let’s contrast that with the lofty ideals published on the NBREA website.

On their website, the NBREA publicly promises that they are:

“committed to protecting the interests of New Brunswick’s real estate buyers and sellers by … Enforcing strict adherence to standards of professional ethics as specified in the … REALTOR® Code of Ethics”.

https://www.nbrea.ca/about-nbrea/

What is the realtor code of ethics? It's a set of rules established by the Canadian Real Estate Association that includes the following:

  • A REALTOR® has an obligation to discover facts pertaining to a property which a prudent REALTOR® would discover in order to avoid error or misrepresentation.
  • Claims or offerings in Advertising must be accurate, clear and understandable.
  • Any claims or offerings in advertising must also comply with all applicable laws, including the Competition Act.

https://www.nbrea.ca/realtors-code-of-ethics/

https://www.crea.ca/wp-content/uploads/2016/03/The-REALTOR-Code.pdf

Note that the Competition Act is a federal law that prohibits misleading advertising, under penalty of some significant fines.

It stipulates that even if no one believes the false advertising, it is still a crime. That is, to prove wrongdoing, “it is not necessary to demonstrate that any person was deceived or misled”. In other words, Lester’s false advertising was a crime, even if I was not harmed by it.

Source: https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/h_00784.html

Now, what about Lester’s manager, Melinda? Well, real estate managers have specific responsibilities, which are listed on the NBREA website. In brief:

  • · A manager is required to supervise and control the activities of the realtors for whom she is responsible.
  • · She must take remedial action when a violation by a realtor is discovered.

Did Lester’s manager, Melinda, do any of that? Apparently not.

Melinda did not even once acknowledge the legitimacy of my complaint about Lester’s false advertising, even though I had emailed the evidence to her.

She also broke the Realtor Code of Conduct in some other ways, as I explained in detail to the NBREA complaints committee.

Yet on Melinda’s profile webpage, the very first attribute she claims to possess is "great integrity".

So I asked the Complaints Committee to investigate exactly how Melinda had demonstrated her integrity after I told her about Lester’s false advertising. But the Committee never responded to my request. I wonder why.

Anyway, I looked up Melinda on the internet, and discovered that she was a former president of the NBREA. When I realized that, I wondered if her high status would influence the committee's decision.

After all, they might not want to rule against Lester, given that his manager, Melinda, was so well-connected.

So, when I eventually received the committee’s decision letter, I was not very surprised to learn that they had rejected my complaint.

They rejected it despite the clear evidence that Lester had advertised falsely.

They rejected it despite the fact that false advertising is a crime, and forbidden by the NBREA Code of Conduct.

And they rejected it despite the NBREA’s public assurances of their own absolute integrity.

So, why did the Complaints committee reject my complaint? Their excuse was that my complaint supposedly “does not relate to professional misconduct or incompetence”.

Think about that. I proved that Lester advertised falsely, and thereby broke the law and the NBREA Code of Conduct. Was that professional misconduct or incompetence? Of course! Is this what I complained about? Absolutely! So why did the committee pretend that my complaint did not relate to professional misconduct or incompetence, when it obviously did relate to that?

Perhaps the committee wanted to protect Lester, but they did not want to explicitly claim that he was innocent, because obviously, he was guilty. Instead, they criticized my complaint itself, by saying that it was irrelevant. Moreover, their explanation for their decision was so short and illogical that no reasonable person could make sense of it. Essentially, it was nonsense. Apparently, they wanted to confuse the issue, to preclude any further debate.

In any case, by refusing to provide a meaningful reason for their decision, they violated the spirit of the NBREA Act. That law required them to disclose to me the reason for their decision.

Clearly, the spirit of the law requires meaningful disclosure. After all, it would be pointless for the law to require meaningless disclosure. Yet that’s all the Committee provided.

The absurdity of the situation might lead you to ask, who were the members of the complaints committee? Well, the committee was composed of three people, including two realtors, and one senior government lawyer. That lawyer normally works for the FCNB, which is part of the finance department of the provincial government.

It seems unlikely that the two realtors would overrule the senior government lawyer. Therefore, the government lawyer must have agreed with the decision to reject my complaint. So, why would a senior government lawyer ignore clear-cut evidence of a realtor’s wrongdoing, and imply that no crime had been committed? By doing this, she risked her reputation and her career. So why was my complaint important enough for her to take such a risk? Had she been told to acquit Lester, to somehow protect an important political donor? Or to protect a politician from scandal? I don’t have any actual evidence of that, but the absurdity of the committee’s decision certainly invites speculation.

Furthermore, being a senior government lawyer, she must have approved the actual wording of the decision. So why did she allow it to be written in such a meaningless and nonsensical way? Did she intend to make it impossible for anyone to understand?

In any case, one way or another, the senior government lawyer participated in a decision not to convict Lester, despite the clear evidence of his false advertising. She thereby sent a message to all realtors that false advertising is acceptable. In effect, this senior government lawyer promoted dishonesty among realtors. Was that in the public interest? Absolutely not.


On April 30, I wrote to the NBREA registrar to ask the Complaints Committee to explain their decision. After all, they had stated that my complaint "does not relate to professional misconduct or incompetence". But that was a lie. In fact, I had provided evidence of false advertising, and that was the topic of my complaint. How was false advertising not professional misconduct? I asked them.

25 days later, I received a reply, not from the complaints committee, but from the NBREA’s lawyer, who I will refer to as Norbert. Unfortunately, Norbert did not meaningfully explain the committee's reasons for their decision. He merely wrote that,

“The Complaints Committee … determined that no professional misconduct had occurred. This determination was conveyed in the Committee’s decision.”

But that was false. The committee had not written that “no professional misconduct had occurred”. Instead, what they had actually written was that my complaint was not even about professional misconduct.

In other words, Norbert subtly rephrased what the committee had written, apparently to make it seem more reasonable. But was that honest?

Remember, the committee included a senior government lawyer. Surely she knew how to write her own sentences, and didn't need Norbert to rewrite them for her.

Furthermore, Norbert explicitly refused to ask the Committee to explain more clearly the reason for their decision. His excuse was that "Under the Act, the Committee does not have the power to reconsider its decision." But I did not ask the Committee to reconsider their decision. Instead, I asked the Committee to explain their decision.

In other words, Norbert answered a question that I didn’t even ask, to avoid answering the question that I really did ask. Was this sincere? It doesn’t seem so. Was this in the public interest? Absolutely not.

Let's think about this for a minute. According to their website, the NBREA exists for two main reasons, one of which is to protect the public interest.

https://www.nbrea.ca/about-nbrea

So here I am, a member of the public. I have given the NBREA some irrefutable documentary evidence that one of their realtors had advertised falsely. That is a crime. And for reporting that, what do I get?

I get a complaints committee that denies the crime, and explains their decision only with a short phrase that is meaningless and nonsensical.

When I ask for clarification, I am referred to the NBREA’s lawyer, Norbert, who does nothing but evade and obfuscate.

In other words, so far in my story, the NBREA seems to have done everything in their power, not to protect the public interest, but to protect the guilty realtor, and perhaps his well-connected manager too.

Remember also that one of the three members of the complaints committee was a senior government lawyer, employed in the FCNB. The mandate of the FCNB is “to provide regulatory services that protect the public interest”, among other things. Yet the senior FCNB government lawyer apparently did the opposite. But why?

At this point, I had already asked the board of directors to review the treatment of my complaint. However, the registrar had cautioned me that the Board would only consider whether the correct procedures had been followed, and nothing else. That is, the registrar would provide a list of all the procedural steps that had been taken, and if his list was complete, then the Board would approve it.

In other words, the board would function merely as a rubber stamp, automatically approving the complaints committee's decision, without properly investigating it.

Feeling very dissatisfied with this, I wrote a letter to the Board, and I asked the registrar to give it to them. He refused, and so did the lawyer! But by then, it was just two days until the Board meeting.

I wanted to ask the Board to reject the complaints committee’s decision, but I wondered if the Board might hide behind the excuse that my concern was not a procedural issue, so they could simply ignore it.

So I looked at their complaints manual, and found a procedural issue to complain about.

I hoped that this procedural complaint would compel the Board to consider the other more important issue as well. Specifically, I wanted them to reject the complaints committee's decision, because the Committee had not explained their decision adequately. They had thereby violated the spirit of the NBREA Act.

This issue was crucial because if they actually accepted the complaints committee’s meaningless, nonsensical explanation, then the Board would expose their own corruption and their utter lack of interest in serving the public.

Since the NBREA’s registrar and lawyer had already refused to forward my letter to the Board, my only alternative was to email each Board member directly. This I raced to do, the evening before the Board meeting. After that, for several weeks, I heard nothing.

Finally, almost 11 months after I initially submitted my complaint, I received the Board’s verdict.

Upon reading it, I was disappointed to see that they had not agreed with me. However, they had actually considered my last-minute email. And they had commented specifically on the complaints committee’s meaningless, nonsensical reason for excusing the dishonest realtor.

Of course, they sided with the complaints committee. But in doing so, they made themselves complicit, and equally guilty. This was proof that even the NBREA’s Board of Directors is fundamentally incapable of regulating themselves and disciplining their fellow realtors.

Here is the Board’s tortured reasoning, written in dense legalese, presumably by their lawyer:

“It is the position of the Board of Directors that the sufficiency of reasons provided by a decision maker, must reflect the severity of the powers granted to such a duly constituted body. In these instances, the Complaints Committee has a lesser standard of the sufficiency of their reasons than that of the Discipline Committee where their powers are vastly different thus the thoroughness of their reasons reflect the same.”

Translated into plain English, this means that if a committee does not have “severe” power, then they don’t need to explain their decisions in a meaningful way. For example, the complaints committee does not have severe power, because they don't have the power to actually punish realtors. Since their power is not very severe, they are permitted to explain their decisions in a way that is meaningless and nonsensical.

In contrast, the discipline committee does have severe power, because they do have the power to punish realtors. Hence, this committee would be required to explain their decision meaningfully.

Of course, this is irrelevant nonsense. In fact, the NBREA Act itself does not distinguish between committees that have severe power and committees that do not. What the Act actually does require is that the complaints committee must tell the complainant (me) the reason why they made their decision. Moreover, the spirit of the Act requires the committee's explanation to be meaningful. This is also consistent with the purpose of the Act, which includes protecting the public. By failing to behave according to the purpose of the law, and the spirit of the law, the Board of Directors violated the NBREA Act.

They also thereby demonstrated that they are incapable of regulating themselves.

So, when a member of the public has a complaint about a realtor, why are they deceived into believing that they should complain to a committee of other realtors? This is cruel. It’s a huge waste of time. And it is absolutely not fair.

The NBREA’s complaints process is a sham. It does not at all live up to the lofty promises that the NBREA makes on its website, such as the following:

As REALTORS®, we are committed to:

  • · Absolute honesty and integrity in business dealings …
  • · Personal accountability through compliance with CREA’s Standards of Business Practice.

https://www.nbrea.ca/realtors-code-of-ethics/

So, what is CREA? CREA is the Canadian Real Estate Association. It’s the umbrella organization that all of the provincial real estate associations belong to. So, what does CREA have to say about honesty and integrity among realtors? Their website says:

"For too long, enforcement of the REALTOR® Code has been inconsistent, contributing to reputation trauma and undesirable media attention questioning the ethics of all REALTORS®."

https://www.creacafe.ca/revamping-the-enforcement-process-for-the-realtor-code-will-strengthen-our-reputation/

That's what the CREA website says. So evidently, I am not alone in complaining about professional misconduct among realtors. Apparently, misconduct is rampant.

The only solution to this problem is full government supervision. Realtor’s licenses should be regulated in much the same way as driver’s licenses are regulated, with fines, demerit points, and license suspensions. Moreover, realtors who break the law need to be prosecuted in a way that is transparent, accountable, and fair to customers.

Action on this is long overdue. It’s time for the government to act. Let’s end the corruption in the real estate industry, once and for all, for everyone’s sake.

Who was involved?

Notes:

  • NBREA means New Brunswick Real Estate Association.
  • CREA is the Canadian Real Estate Association.
  • FCNB is the Financial and Consumer Services Commission of New Brunswick.

 

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