Tuesday, July 1, 2014

MAC scandal reveals a dark secret of the Condo Industry. Exposes how public is 'at-risk' to Realtor shenanigans!

As noted on Friday, the Real Estate Council of BC (RECBC) has finally taken action on the MAC Marketing scandal. That's where four employees of MAC attempted to manipulate local media with a story about fake asian buyers in Vancouver for Chinese New Year

The end result? Only the project manager on site that day (Nic Jensen) received a suspension. And as far as suspensions go, it was the most meagre of wrist slaps: two weeks and a $1,250 fine (plus remedial training).

This is the penalty for overseeing a complete and total ethical breach of the Realtor Code of Conduct? This is the penalty for orchestrating a lie that was subsequently seen by hundreds of thousands of people? Many pundits and observers at the time correctly identified the whole charade as a blatant attempt at trying to influence market conditions and sell a product under false circumstances? So what of MAC Marketing Solutions? No penalty for them? 

But by far was most intriguing fact was that the three other players in the media charade escaped scott-free.

Was there no accounting for the fictitious 'Chris Lee', Amanda Lee and the unnamed older blonde sales person who showed them around the display suites on TV? Did they not also violate the Realtor Code of Conduct?

When pressed on the issue, the RECBC let slip an astonishing revelation. All other staff on site at the MAC condo pre-sales centre were not licensed realtors. They were "unlicensed staff'" and therefore untouchable by the RECBC.

Huh?  Wait a minute... despite TV footage profiling these staff members actively showing and, in essence, marketing the pre-sales condos, they are 'untouchable' because they are "unlicensed staff"?

How can this be?

We are told this a legal loophole the real estate industry has been dancing through for quite a while now.

It appears that MAC (and other Condo sales companies)  use 'sales associates' to basically show and market the condos to potential customers. Then they trot the primed customer into the sales manager (the only licensed realtor of the bunch) who then completes the paperwork.

Since the 'sales associates' are not licensed realtors, they are not bound by any code of conduct. As proven in the MAC Marketing Asian Buyer Scandal, these 'sales associates' can lie and say anything they want - and they will not be held accountable for their actions.

This is an astonishing revelation.

Compare this to the world of car sales.

A member of the public walks into a car dealership (much like a Condo dealership) and wants to buy a car. Does the auto industry allow the primary sales activity to be handled by unlicensed staff who can say and make any claims they want to make a sale, the only contact with an accountable industry member occurring when the business manager closes the deal with the official paperwork?

Absolutely not.

The auto industry demands all car sales persons be licensed if they are to participate in selling process. This is done specifically to prevent the MAC Marketing type of abuse from ever occurring. When you walk into a car dealership, you have to wait for a licensed sales person to show you an automobile. The car jockey or secretarial staff is not allowed to do this for them.

Not so, apparently, in the Condo sales world.

It has now been revealed by the RECBC that unlicensed staff at a Condo Sales Centre, unbound by any code of conduct, can do and say anything they want in their efforts to sell and promote their product without repercussion. MAC Marketing Solutions was in no way sanctioned or punished for the actions of these unlicensed employees.

Real Estate and financial services guru Garth Turner advises that one senior executive working for a major Toronto-based developer has confided:
“You can work for a builder as a sales representative and sell homes legally in Ontario if you are hired as an employee of the organization. However, most builders prefer to hire a 3rd party sales organization which provides salespeople. Benefits do not have to be paid by the builder who subsequently saves money and liability.”
Clearly regulatory bodies have dropped the ball.

Who is protecting Canadians from a massive potential for abuse here?

The parable of 'Chris' and Amanda Lee proves these 'sales associates' are free to lie and deceive customers at will... and that's wrong.  

The only people who should be allowed to show, market, or otherwise promote condos at a real estate sales centre are licensed Realtors bound by their professional code of conduct, a condition which allows the real estate buying public recourse when misconduct occurs.

Exactly how widespread is this apparently perfectly legal practice in any given Condo Sales Centre? And how do we know this immunity isn't being regularly abused?


Email: village_whisperer@live.ca
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  1. Somehow I get the feeling MAC's plans to have the newsworthiness of this story disappear in the distraction of the four day long Canada Day weekend just evaporated

  2. Great reporting Whisperer.

  3. Someday the markets will sort themselves out...and although the US Fed is close to being done propping up asset prices, we will now have to wait for the ECB to start and finally finish doing the same thing....so it'll be about another 5 years!

    What a _____ing joke!

    1. Bernanke has said in private speaking engagements that he would be surprised if interest rates rise significantly in his lifetime. The EU will be a mess for a very long time.

    2. Some years ago, financial advisor Brian Acker defiantly declared that gold would never see $500 an ounce in his CHILDREN'S lifetime. Put his whole reputation on the line. Very publicly.

      And to this day, he still makes a sizeable paycheque managing his Canadian clients' personal wealth.

      Weird that.

  4. Sincere congratulations on the tenacity you've displayed in helping to keep this story in the public eye.

    But iif you think that this is anything but a minor embarrassment to a criminal cabal that pulls similar deceits as this every singe day with complete impunity, you're dreaming.

    And the fact that the public doesn't bat an eye, let alone get outraged, is all you need to know that this will never, ever improve. In fact, as the market softens, it will surely get worse.

    So nice job, but suckers are born every minute...and the Vancouver chapter would all rather protest pipelines than directing any attention to something far more real, insidious, relevant and ruinous.

  5. hmm... If the sales associates are not governed by a regulatory body, wouldn't that mean they are governed by the laws of the country. Wouldn't they be investigated by police, charged with an offense and go through court system like the rest of us?

    1. So, the RECBC claimed that they cannot discipline these sales associates because they were not members of the organization. However, they were employees of MAC and Cameron McNeill. In spite of their shameful behavior, MAC and Cameron McNeill have decided that no action was warranted. One cannot help but conclude that such unethical and deceitful behavior is at least tolerated if not condoned by MAC and Cameron McNeill.

  6. Whisperer I don't want to take anything away from you; this was excellent work.

    I think regardless of whether this was an innocent staging of the reality of foreign investors, or whether this was an attempt to pump the market or specific property, really the root problem here is that there is a large amount of foreign investment in van RE, where you have condo towers 70% empty. This is obviously great for developers and construction jobs, but it's terrible news for everyone else except childless baby boomers ready to bounce out of the market.

    Talking with a friend who lives close to Grouse in N Van, she stated that the neighborhood demographic has totally changed: lots of empty houses, and lots of kidless couples. There are no longer kids playing in the street; there are no kids because people who live there can't afford them.

    1. Pretty much. I live in the same area and would agree.

    2. There is a dearth of single women in N.van too proud to look 'down' for a mate outside their neighbourhood... years and years of this... That is why there is no kids in N.Van, with the great bulge over age 50.. no breeding now. The smartest and wealthiest and they didn't breed... priced themselves out of raising children

  7. And the R/E industry may wonder why they have no credibility...