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Greeting and administrative duties? But free to lie their asses off to the public in order to make the sale?Critics are calling on the B.C. government to do a better job of protecting real estate buyers in light of the results of an investigation into MAC Marketing Solutions and an incident last year in which staff made “false” statements to media.
The investigation revealed that it's legal for marketing companies and developers to have unlicensed staff at presentation centres. It also made clear that industry regulator Real Estate Council of British Columbia (RECBC) has no authority over those unlicensed staff if they work for the developer.
RECBC fined former MAC manager Nicolas Jensen $1,250 in late June and suspended him between July 9 and July 22 for his role in a scheme to dupe media in February 2013.
Jensen directed two unlicensed MAC staffers to pose as sisters who were waiting for wealthy Chinese parents to visit and buy them a condominium at Cressey Development Group's Maddox development as part of Chinese New Year celebrations, RECBC deputy executive director Larry Buttress told Business in Vancouver.
Jensen lost his job at MAC 12 days after the incident, and that loss of employment was a mitigating factor in what some, including Toronto real estate blogger Garth Turner, dismissed as an RECBC slap on the wrist.
The RECBC had no jurisdiction to take action against the unlicensed women, who posed as sisters, because the organization is limited to punishing licensed realtors and marketing companies.
The RECBC could have fined MAC, as the marketer, but its investigators chose not to levy any additional fines because Buttress said it deemed that Jensen alone directed the ruse.
Had the women worked for the developer, Cressey, instead of the marketer, MAC, RECBC could have meted out no punishment because it has no authority over developers or their staff.
“Everyone along the promotion chain should be accountable ultimately to the public,” said West End Neighbours director and Vancouver real estate observer Randy Helten. “If the RECBC is not doing that then some changes are needed [to B.C.'s Real Estate Services Act].”
Vancouver Cedar Party mayoral candidate Glen Chernen, who is a former licensed real estate broker, agreed.
“You're dealing with buyers who are making possibly the largest investment of their lives, a massive investment, and you would hope that the person dealing with them would have a certification,” he said.
“We don't know what's being said between the salespeople and the buyers in negotiations. A lot of things might be said that shouldn't be.”
Regardless, B.C.'s Real Estate Services Act and its regulations have a host of exemptions that allow non-licensed salespeople to sell real estate.
Developers support the status quo.
Cressey had unlicensed salespeople involved with projects about 15 years ago but now has no sales people, executive vice-president Hani Lammam told BIV.
Instead the company contracts all its marketing to third parties, such as MAC.
“I don't see a case for requiring all real estate transactions to involve realtors,” Lammam said. “I can go buy a home directly from an owner. I can go make a deal. I don't have to have a licensed agent involved in it.”
He added that if buyers want their own representation, they are free to bring along their own realtor.
“I don't think it's fair for the consumer to add the cost of representation when it's not necessary,” Lammam said. “Realtors are not inexpensive. So requiring everyone at presentation centres to be licensed would be an added cost.”
There are approximately 21,000 licensed realtors in B.C. It's unclear how many unlicensed sales staff are working for marketing companies and developers.
MAC owner Cameron McNeil told BIV that all of his sales employees are licensed and that the women who posed as sisters were not in sales roles but, instead, had “greeting and administrative duties.”
“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.”
On February 14, 2013, Council received an email from a CBC News reporter, K.W.,regarding concerns about an interview on February 9, 2013, that had been conducted by a reporter from CBC and CTV with purported buyers from China, with respect to the marketing of a project and the impact that Chinese New Year may have on sales activity. The report had aired on CBC and CTV on February 9.
The background was that on February 9, 2013, arrangements were made by the general sales manager of MAC Marketing Solutions Inc. ("the brokerage") for reporters from CBC and CTV to attend a sales presentation centre which was marketing pre-sales on behalf of the brokerage.
When the sales manager was unable to attend the media event, she arranged for a licensee, Nicolas Jensen to attend the sales centre on behalf of the brokerage and to be interviewed by the reporters.
When Mr. Jensen attended the centre, he observed that four hostesses were sitting at the front desk. Prior to his interviews, he asked two of the four brokerage employees to take off their name tags, change their clothes as much as they were able and to act as pedestrian traffic behind the site model in the centre while the interview was being conducted.
When he made these arrangements, he did not ask them to provide statements to the press nor did he intend for that to take place.
After Mr. Jensen's interview with CTV, he was asked by that reporter if she could interview a potential buyer on camera. Mr. Jensen approached a couple who were present in the sales centre and asked them if they would speak to the media. They refused.
Mr. Jensen then spoke to the two brokerage employees and told them that the reporter wanted camera shoots and for them to continue being traffic. The media believed the employees were prospective buyers and were being made available to be interviewed. As Mr. Jensen prepared for his next interview with CBC, he observed that the reporter from CTV was interviewing the two employees and one of the employees in particular was answering questions and posing as an international buyer.
Observing that, Mr. Jensen left the centre and called the MAC Marketing VP of Sales (who managed the two employees) to tell her what had happened and for her to call him back as soon as possible.
Mr. Jensen then returned to the centre and completed his interview with CBC. All of the licensees and employees present at the time of the interview in question state that the events happened very quickly. The information provided to the media by the two employees was not rehearsed or coached.
On February 14, 2013, after the story had aired on CBC and CTV, some bloggers recognized the two women, or at least one of them, and after researching social media and other sources, it was discovered that the women were actually employees of the brokerage.
The managing broker of the brokerage issued an apology on February 17, 2013 for the media having been misled.
Due to the controversy and publicity of the situation, Mr. Jensen resigned from MAC Marketing on February 18, 2013.
Mr. Jensen has no prior discipline history with the Council
"I have always been proud of the high level of professionalism of the BC Development industry. MAC aims to uphold those standards and we pursue the highest of professional excellence and business ethics. This incident was a difficult learning experience and because of it, MAC integrated a combination of revised training and corporate governance measures so everyone on our staff clearly understands and adheres to our high standards. It is our commitment that this kind of incident does not happen again. When anyone is new to MAC and joins the company, business ethics and standards are reviewed as part of the initial company familiarization. MAC has taken this incident very seriously and our goal is to be the premium provider of services in our service area. Professional excellence has moved to the forefront of our core values and business practices."
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