Cambridge broker Steve Bailey didn’t get special treatment, Real Estate Council of Ontario says
Steve Bailey, a Cambridge broker and former RECO board member, was fined $30,000 after admitting to multiple ethical breaches of the laws governing the real estate sector.
The Real Estate Council of Ontario is defending its record on policing the real estate industry — and says it’s getting tougher on real estate professionals who cross the line.
That’s from Joseph Richer, RECO’s registrar, who oversees and enforces the rules governing real estate professionals in Ontario. He’s responding to criticism some have levelled at the regulator after its handling of the Steve Bailey case.
Bailey, a Cambridge broker and former RECO board member, was fined $30,000 after admitting to multiple ethical breaches of the laws governing the real estate sector. The regulator decided 14 months ago that it would pursue a discipline hearing against him — but would not consider any discipline that would impact his licence.
Bailey was treated as a first-time offender, even though he was investigated for two different complaints involving separate real estate transactions, Richer said. His clean record impacted RECO’s decisions around how to handle the case.
The regulator eventually settled with Bailey, allowing him to avoid a public discipline hearing.
“I believe this is a positive outcome, and I think it’s highly unlikely that he ever behaves this way again,” Richer said.
“We considered all the factors … The reality is Mr. Bailey was very co-operative during the investigation, and in the end agreed to the facts and the penalty.”
Richer called $30,000 a significant penalty, including $25,000 applied under the old maximum allowed per infraction. The law was recently changed to allow penalties of up to $50,000 per infraction, but RECO said Bailey’s case wasn’t eligible.
Bailey must also live with the damage to his reputation, Richer said, since an agreed statement of facts detailing his ethical breaches will be attached to his name on the regulator’s website for five years.
“The fine in this case, I think it’s substantial. But the public perception of Mr. Bailey in this case, that is also very damaging,” he said.
The regulator says its record enforcing the Real Estate and Business Brokers Act, 2002 is strong. RECO opened 195 investigations into complaints against real estate professionals in 2018 — up six per cent from 2017.
Last year, RECO investigations led to 25 prosecutions in Provincial Offences Court, with 23 convictions. That represented $127,000 in fines, and $23,500 in court-ordered restitution.
Another 130 cases were sent to RECO’s Discipline Committee to be handled internally — up from 87 in 2017 and 51 in 2016. Those cases resulted in a total of $579,750 in fines last year.
“I think that speaks for itself. We pursue a lot of disciplinary action,” Richer said.
At the same time, he said RECO is pursuing other changes to the legislation that governs the real estate industry. That includes doubling the amount of time that violations are included on a registrant’s record.
Richer said the regulator is also talking to the province about changing a rule that says registrants’ names are kept confidential in a discipline decision until the appeal period is over. That scenario caused Bailey to be identified as “Representative A” in the decision released last week.
“It’s one of those things we want to talk to the government about to say, ‘This law doesn’t make a lot of sense.’ The person’s name should be included. In every other court, it’s public immediately,” he said.
Concerned about public perception of bias as it investigated a former board member, RECO hired an external law firm to prosecute Bailey’s case instead of using its own litigation department. Richer insisted Bailey did not receive any special treatment.
“I’d say he was treated in the same manner as anyone else,” he said.
The regulator’s objective is for “progressive discipline” designed to curb behaviour and educate, he explained. If a real estate professional continues to break the laws that govern their industry, the discipline gets more severe.
“If they demonstrate recidivist behaviour where they keep acting badly, then we’ll escalate,” he said. “There wasn’t a pattern of behaviour, and I believe there’s a strong deterrent to reoffending … If he reoffends, we’ll consider that past conduct.”
His lawyer, Lorne Honickman, told a RECO panel in April that the regulator acted in bad faith in pursuing complaints against the broker — and accused the council of an “abuse of process” against Bailey, a former RECO board member.