General Real Estate Issues

REALTOR® Basics for Complying with CASL (Canada’s Anti-Spam Legislation)

Canada’s Anti-Spam Legislation (CASL) takes effect July 1st, 2014. Strict compliance will be overseen and enforced by the CRTC. It will impact all electronic marketing initiatives so it is important we understand what is required to comply.  While the new rules will certainly change the way we conduct our marketing initiatives, they will not impact our productivity once we adapt.  The following is a simplified summary of the new CASL rules for REALTORS®:

What is defined as a CEM? 

  • All Commercial Electronic Messages (aka CEM)
  • Messages that contain info on the purchase or sale of property (open house or listing promos), soliciting buyer/seller services, related ads, offers or promotions.

What marketing initiatives does CASL impact? 

  • Email Messages (individual or e-blast campaigns)
  • Text Messages
  • Messaging via social media (but not open posts/feeds)
  • Installation of computer programs or Apps
  • (CREA is unsure of whether messaging such as Skype or BBMs are affected but is seeking clarification)

What electronic messages are exempt? 

  • Fax Transmissions
  • Live or Voice Messages
  • Messages that relate solely to a transaction (i.e. – sending a copy of an offer to a Client)
  • Communications to a Client or Colleague that involve personal matters
  • Messages within organizations or between Companies that have a business relationship
  • Any notice required to satisfy a legal obligation
  • Fundraising by charities, political parties or candidates

What is required to comply with CASL (Canada’s Anti-Spam Legislation)? 

You will either be dealing with existing relationships prior to the new CASL legislation and those relationships after its implementation July 1st, 2014.

A.  Existing business relationships PRIOR to July 1st, 2014 

  • There is a transitional provision for “implied” consent (defined below) up to July 1st, 2017. This means REALTORS® have 3 years from the implementation of CASL to obtain “express” consent.
  • The newly obtained express consent does not expire, unless the recipient withdraws it.
  • Any electronic messages to obtain express consent are considered a CEM and must comply with CASL rules

B.  New business relationship or AFTER to July 1st, 2014 

STEP 1. Must have either IMPLIED or EXPRESS CONSENT from the recipient before sending a CEM 

IMPLIED Consent applies to: 

Referrals of potential Client/Customer

  • Only applies to the first CEM sent to a recipient as a follow-up to a referral
  • Individual who made the referral must have a family relationship, personal relationship or an existing business relationship with BOTH the REALTOR® AND the person who is receiving the message
  • REALTOR® must disclose in the CEM, the name of the person who made the referral

Existing Business Relationships

  • Either a contractual relationship or a finalized transaction transpired within the past two years prior to the CEM being sent
  • A CEM sent past the 2 years above requires express consent
  • An inquiry was made by the recipient within the past 6 months prior to the CEM being sent
  • A CEM sent past the 6 months above requires express consent

Published Email Addresses

  • The CEM recipient must have their electronic address openly published (on website for example)
  • Must also be in the absence of notice that they do not wish to receive unsolicited messages
  • The content of the CEM must relate to recipient’s business or official capacity (i.e. – You can send a CEM to a property manager or fellow REALTOR® but you CANNOT send one to an individual)

Direct disclosure of email address to REALTOR®

  • The CEM recipient must have provided their electronic address directly to the REALTOR®
  • Must also be in the absence of notice that they do not wish to receive unsolicited messages
  • The content of the CEM must relate to recipient’s business or official capacity (i.e. – You can send a CEM to a property manager or fellow REALTOR® but you CANNOT send one to an individual)

EXPRESS Consent applies to: 

In the absence of implied consent, express consent is needed*.

The following must be provided or applied when seeking it:

  • Purpose for requesting consent
  • REALTOR® full name and contact info as outlined in step 2 below.
  • Can be obtained either electronically, in writing or verbally.
  • Consent mechanism cannot have the “consent” box pre-checked
  • REALTOR® members should keep evidence of all consent obtained

*Remember that sending an electronic message to obtain express consent is considered a CEM and must comply with CASL

STEP 2. All authorized CEMs must always contain the following contact info: 

  • REALTOR® Name
  • Mailing address
  • Either a telephone number, email address or web address

STEP 3. An unsubscribe mechanism 

  • Recipients must be able to unsubscribe at no cost.
  • Unsubscribe requests must be processed “without delay” and no longer than 10 business days later.
  • Cannot have pre-checked boxes
  • Unsubscribe mechanism must use same electronic means to be performed (i.e. – cannot require a phone call to unsubscribe to an email).  SMS messages must offer the option to (a) reply with “stop” or “unsubscribe” or (b) click on a link to a webpage to unsubscribe
  • Unsubscribe mechanism must be active at least 60 days after a CEM is sent

What is the penalty for non-compliance? 

  • The CRTC can impose fines to individuals ranging from $200 up to $1 million per violation
  • The CRTC can disconnect your email address and/or website which may take weeks to reconnect
  • From July 1st, 2017, recipients of a CEM will have the right to sue the sender

Summary

Put in its simplest form, we have 3 years to obtain express consent from active databases that existed prior to July 1st, 2014.  After this date, we need to: (1) obtain express or implied consent (2) ensure CEMs have appropriate contact info and lastly, (3) they must contain a compliant unsubscribe mechanism.

Once you have taken the time to understand the changes, you will notice they may be a bit of an inconvenience, but certainly not the end to effective electronic marketing campaigns.  It is certainly a “game changer” but we need to adapt, be creative and focus more on permission-based marketing. There are strategies and powerful ways to not only remain relevant, but also make the changes work to your advantage!  Stay tuned for upcoming seminars and in the meantime, happy anti-spamming!

Note:  This blog is not to be copied or distributed without written permission by its Author.  The above is not intended to serve as legal advice and Readers are solely responsible for ensuring their electronic messaging is compliant.

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CMHC, General Real Estate Issues, Industry News, Real Estate Market Updates, Uncategorized

CMHC Announces Premium Hikes

The CMHC announced in their February 28th press release that it is increasing its premiums for those who require mortgage insurance on loans with less than 20% downpayment.  This takes effect May 1st, 2014 and does not apply to existing policy holders.  They added that premiums increased on average 15% across the board, which translates into $5.00 per month. If you actually review the numbers, for example on a $450,000 loan at 95% LTV (Loan to Value), the premium increases by $1800 (0r $8.98/month). For the same loan amount on an 85% LTV, the premium increases only $225 (or $1.12/month).  CMHC is downplaying the premium increase while everyone tries to assess how this will impact our real estate market.

In essence, it is yet another one of Finance Minister Jim Flaherty’s initiatives to prevent (what he perceives to be) the housing “bubble” from bursting and keeps tightening mortgage rules.   I strongly disagree with him on this for a multitude of reasons.  Flaherty is not “in the trenches” like we are and does not interpret the statistics as we can.  Do I think the CMHC premium increases will SIGNIFICANTLY affect the real estate market?  Not “significantly” but I strongly suspect there will be a handful first time buyers in the 95% LTV range who, although can easily afford the extra $5.00 or $8.98 per month, will no longer QUALIFY for CMHC financing.  That is a problem, which I might add was brought on unnecessarily.  Did I mention the CMHC expects to generate $175million in additional revenues from this premium increase?

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General Real Estate Issues

Top 10 REALTOR® Encounters of a Bizarre Kind!

Whether one is new to the world of real estate or an industry veteran, all can agree that there is never a dull moment in this business and we never know what each day will bring.  I recently invited my REALTOR® friends to share on my Facebook timeline some of their strangest encounters during property showings.  The responses included everything from the mildly embarrassing to the truly bizarre.  It was difficult to choose but I compiled a list of the 10 most intriguing encounters shared with me:

  • A lady was awoken in one of the bedrooms as the REALTOR® opened the door during his showing.  She hurls a shoe at the REALTOR® who skillfully managed to duck just in time.  Who knew good reflexes would be a pre-requisite in this business!
  • One REALTOR® found a hidden room in a basement with mirrored walls, a queen bed and a glass shower.  That is fifty shades of creepiness!
  • Just when we think it cannot get any creepier…how about viewing a home that had a mirrored ceiling with a swing over the bed in one of the bedrooms, as well as a Tarzan rope outside with an adult treehouse, complete with more mirrors and a double bed?  I am sure the neighbours nearby would have some interesting tales to tell.  This home makes the one with the stripper pole look very tame in comparison!
  • One REALTOR® visited a home where he saw a selection of dildos on one nightstand and a debit machine on the other nightstand…as much as we try to not judge others, this one definitely makes you go hmmmmm!
  • How about a Seller trying to show off their “gourmet kitchen”?  This poor REALTOR® was practically dry heaving as he recounted a visit to a home where all kitchen surfaces, including the floor, were covered with raw pigs feet while batches of them were boiling on on the stove top; on all four burners by the way.
  • Sometimes, this can even be a very “poopy” business!  Imagine being greeted at the door by a large man in his tighty whities holding a mini poodle and instructing the REALTOR®:  “Do not go in bathroom.  I Just Poop”.  How do you even respond to that?  The same REALTOR® had children poop in a closet during her open house.  Who knew “scoop the poop” would be in a REALTOR’S® job description!
  • How about visiting a home with no beds in the bedrooms upstairs?  Normally, that would not be alarming to most of us…until you walked into the dining room and were greeted by two open coffins.  This is when you do not walk to the nearest exit, but you RUN!
  • One REALTOR® walked into a showing and was greeted by 8 buck naked children running around between the ages of 2 and 7  years old.  This is just wrong on sooooo many levels.
  • A REALTOR® proceeded to show the basement of a home but when she opened the door, there was a cage with a live monkey peering back at them.  Thankfully, cages are chattels and not fixtures!  (Poor monkey).
  • One REALTOR® ended up covered with about 1000 fleas climbing up his legs after a home showing.  The same REALTOR®  was at a house that was full of caged and un-caged ferrets, rabbits and other animals, accompanied by their feces everywhere.  On another occasion he encountered the remains of a marijuana grow-op that the owner didn’t even know about.  Shall we ask him to elaborate about the haunted house or the one with the tomb stones in the basement?  Nope, this poor guy seems to have been traumatized enough!

It was interesting to hear about the strange encounters by so many in our business and I thank those who took the time to share.  I can only imagine how many untold stories remain.

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Industry News, Realtor Tips

Cruising Down the “Real Estate Highway” is all About Cars and Class!

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Many real estate professionals would agree that this is a constantly evolving business and at times, it certainly feels as fast-paced as speeding down a major highway.  Our industry has grown to over 37,000 members in the G.T.A. alone which has led to intensified competition and new business models.  Specifically, we now have discounted listing services or mere postings and buyer cash-back offerings, in addition to full-service REALTORS®.   Regardless of the business model, we can also agree that not all REALTORS® are created equal.

By the same token, not all consumers are created equal either so it is crucial we understand their needs, preferences and how they make their decisions.  Some may drive a Hyundai and shop at a discount outlet.  At the opposite end of the spectrum, you have those who opt for a BMW and Holt Renfrew.  We then have those who are satisfied somewhere in between and perhaps aspire to drive that BMW someday.  Ultimately, it is important to remember that Consumers not only consider AFFORDABILITY, but also what they VALUE and then determine where their money is best spent.

As an individual REALTOR®, you have the freedom to position your services and fees to cater to your chosen target market.  You also have the freedom to choose what brand or brokerage to affiliate yourself with to more effectively contend with a highly competitive environment.  It is a well known fact that branding is crucial in any business so that being said, would you equate yourself to a Hyundai or a BMW?  Essentially, both vehicles have distinct target markets; one being economical or price-point driven, the other “fuelled” by innovative German engineering and prestige.  Whether economy or luxury class, each vehicle faces competition with each other and within their individual markets or class.  Since Hyundai’s are economically priced, does this mean that BMW must slash their prices in order to compete or perhaps give up on car manufacturing altogether?  Of course not, and it is likely becoming quite evident what I am alluding to.

Real estate is not exempt from having different classes of REALTORS® and competition within each class.  However, many who have positioned their services as “BMW’s”, have unnecessarily become frustrated at competing with the “Hyundai’s”, forgetting they are in a different class altogether.  Those who positioned themselves as “Hyundai’s” are not spared from the competition or frustration and are furthermore limited by restrictive profit margins.  Then there is that small handful who try to portray themselves as a “BMW” at “Hyundai” pricing and at times even slandering their competition in the process.  Sigh.  Thankfully, most Consumers are savvy and a good REALTOR® will take the time to educate them on the important differences.  The bottom line is that new business models and intensified competition simply pose a few new challenges we need to address and adjust for.  Since marketing is the “engine” that keeps any business going strong, therein hide the solutions!

So where do you start?  Do you consider your services comparable to a Hyundai or a BMW?  Does this come across clearly in your marketing?  You have got to love a good challenge so our Brokerage’s response to these  obstacles was “bring it”!   We have spent months revamping many marketing pieces in our online office to reflect how our Team chooses to position their services.  The most significant of these was the introduction of an exclusive electronic listing presentation template with video that our Realtors can customize to incorporate their individual value proposition.  In essence, you need to ensure all your marketing materials distinguish you from the competition and focus on more structure and effectiveness.  While many REALTORS® underestimate the need for a value proposition, it is crucial to emphasize its importance and that it be properly integrated it into all marketing materials.  Do you know what your value proposition is and is it compelling enough to attract potential Clients?   In the end, the ultimate goal of your marketing initiatives is to (a) demonstrate your commitment to service excellence (b) ensure you have the most innovative tools that will make you stand out and (c) properly EDUCATE Consumers to make better informed decisions when choosing a REALTOR®.  The question then remains, will your Clients choose to cruise down that “real estate highway” in a Hyundai or a BMW?

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General Real Estate Issues, Industry News

Landlords vs. Abusive Tenants

Not too long ago, a major newspaper in Toronto published a story about a lady named Nina Willis who was nicknamed “the tenant from hell”.  She was evicted from 6 homes since 2005, in each case living rent-free.  During her last eviction, it took the landlord almost a year to have her evicted and she was in debt for well over a year’s worth of rent.  Once she finally departed, the home was filthy, in need of expensive repairs and to add insult to injury, Ms. Willis left behind a pile of excrement.  This is every Landlord’s worst nightmare.

In Ontario, the Residential Tenancies Act (RTA) is intended to protect BOTH landlord and tenant rights, however there is an imbalance to the detriment of landlords.  All too often they contend with non-payment of rent and/or damage to their property.  While the RTA outlines a landlord’s right to evict in these circumstances, enforcement is another matter.  Tenants are seen as the weaker party and as a result,  judges are not overly eager to grant an eviction and when they do, it is a long process.  As mentioned, in Ms. Willis’ case, it took the landlord about a year to get an eviction order.  During this time, landlords may incur legal fees, lost rent revenue, re-renting costs, legal enforcement fees and collection fees.  While the legislation is in place to safeguard against unfair evictions,  some dishonest tenants are using various loop-holes to intentionally manipulate the system and avoid eviction so they can live rent-free at the landlord’s expense.

Firstly, there is a provision in the RTA which allows the Landlord and Tenant Board to void a Landlord’s application for eviction as soon as a tenant issues a cheque as payment.  If the cheque is not honoured, the landlord must reapply to evict, during which time the tenant continues to live rent-free.  In cases where an eviction order is granted, this too can be voided once a tenant issues a cheque and files a motion with the Board accompanied by an affadavit stating they paid the outstanding rent.  The Board accepts the tenant’s word without consideration that the cheque may not clear.  In other instances, a judge may not grant an eviction order that he/she feels will create hardship for the tenants.  For example, if it is winter and the tenants have children, the judge may not grant an eviction order.  The landlord must continue to fulfill his/her obligations even though the tenant’s rental debt accumulates.

The other issue landlords face is damage to their property which sometimes arises out of carelessness, indifference or an attempt to retaliate against the landlord.  In most States throughout the U.S., landlords are permitted to collect security deposits to minimize the likelihood of damages and losses.  These deposits are refundable provided the premises only show “normal wear and tear” and remain undamaged.  In Ontario however, the RTA does not allow a landlord to collect a security deposit.  Also, a tenant can trash a property then move on undetected to the next landlord because our privacy legislation allows for repeatedly abusive tenants, such as Ms. Willis, to remain hidden.  Keep in mind there are many more challenges landlords face with the RTA and the Board, but this blog only covers a few of the main issues that impact the RE/MAX Condos Plus team’s daily interactions with our landlord clients.

Landlords are exposed to financial losses due to flaws in the RTA and lack of proper enforcement.  In some cases it may be intentional manipulation on the part of unscrupulous tenants to live rent-free.  In other situations, the tenants may be in a difficult financial position and unable to pay.  However, we need to understand that many landlords apply rent revenues to mortgage payments, property taxes and other expenses.  Will the bank forgive the landlord’s mortgage payment when a tenant defaults on their rent?  Most definitely not.  The landlord may risk losing their rental property if they cannot meet their financial commitments.   Why should a landlord have to incur losses and property damage because a tenant does not want to pay rent and knows how to manipulate the system?  Also, is it fair that a landlord carry the financial burden for those who cannot afford to pay their rent when our tax dollars fund government-run social services that serve that purpose?  What about the Landlord who contends with a tenant who mismanages their money or opts to live beyond their financial means and chooses to pay for extravagance rather than rent?  These are all major injustices and what many do not realize is that this is directly impacting “entry-level” tenants, making it extremely difficult to find a home to rent or it drastically limits their options.  Applicants who are students, new to the country or do not have an established credit history are considered high-risk and typically disqualified quickly by fearful landlords.  The reality is, Realtors and their landlord clients are forced to implement a much more rigorous tenant screening process which may unjustly disqualify some worthy applicants along with the unworthy ones.

Essentially, an abused landlord cannot easily pursue their rights under the very legislation that is in place to protect them.  Instead, the ultimate impact of our flawed system indirectly imposes a hardship on “entry-level” tenants while it allows dishonest ones to blatantly make a mockery of it and continue to do so without consequences.  This not only reflects badly on the Residential Tenancies Act, but also the civil justice system in Ontario.  Changes to this flawed system are LONG overdue!

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Industry News, Real Estate Market Updates

Competition Bureau’s Case Dismissed! Who Really Wins?

At the end of May 2011, the Competition Bureau of Canada announced it was pursuing the Toronto Real Estate Board (TREB) alleging it was anti-competitive because it restricted the ability of Realtors to introduce so-called “innovative” online brokerage services to the detriment of consumers.  This came shortly after a prior case in which TREB paid a settlement and conceded to “For Sale By Owner” FSBO’s on the MLS.  This time, the Bureau ultimately sought to have a full inventory of sold listing data available online to the public through MLS as well.  It does not take long to figure out what the ultimate motives are.  Interestingly enough, the lawsuit was brought under the Competition Act’s abuse of dominance section, which allows for  non-criminal sanctions in cases where a dominant firm  practices anti-competitive acts that are deemed to “prevent or lessen competition”.

We are an industry of almost 38,000 Realtors competing in the Greater Toronto Area alone.  Each Realtor has the freedom to choose which Brokerage to work with, what services they wish to offer and what those services are worth.  How does that “prevent or lessen competition”?  How is TREB even remotely anti-competitive?  Consequently, the sold data the Bureau was seeking public access to directly from MLS is actually available online via Teranet (managed by the Ontario Government).  On April 15th, 2013, the Tribunal dismissed the Competition Bureau’s claim with costs being awarded to TREB.  This is a bittersweet victory for TREB and its Realtors as we realize these costs will ultimately be paid by our taxpayer pockets!  In the meantime, we all await to see if the Competition Bureau will appeal the ruling.

Realtors have put many years and a considerable investment into developing and maintaining the MLS database.  We continue to pay thousands of dollars each year to upkeep it and  I personally volunteer on the Professional Standards Review Panel to help maintain its integrity and professional standards.  It is considered our intellectual property and TREB’s members should have the right to determine its use.  Instead, certain companies are trying to access it to introduce so-called “innovative” services.  What they are truly seeking to do is take the MLS (the very database Realtors created and continuously upkeep), then sell access to consumers and encourage them to buy and/or sell their home without a Realtor.  In the process, this company of course earns a handsome fee for doing so.   The April 15th ruling has deflated part of that scheme for the time being.

Coincidentally, there is another emerging category of third party companies that are seeking access to MLS.  Their intention is solely to market these listings online to generate client leads which they can “sell” back to the same Realtors who created and continuously upkeep the very MLS database that attracted those Client leads.  How is this insanity even legal?  Worst of all, the same individual that instigated all previous lawsuits is the common denominator in all this predatory behaviour against TREB.

It is important I emphasize that Realtors are certainly not opposed to consumers buying and selling on their own or competing business models within our industry.  The core issue is that if an individual or company wants to profit from consumers who prefer to sell privately, they should use their own funds to set up their own database and infrastructure.  Instead, they are trying to capitalize off the established success of the MLS by attempting to legalize their endeavours through the Competition Bureau and slandering Realtors in the process.

On a final note, the Competition Bureau noted in their  lawsuit against TREB that in the real estate industry , “The top five agencies earned more than 70 per cent of the commissions in recent years, with two alone – Re/Max and Royal LePage – responsible for more than 40 per cent of it.” While they deem this to be anti-competitive and portray us as greedy, they must remember that CONSUMERS HAVE FREEDOM OF CHOICE AND THEY ARE THE ONES WHO DECIDED TO GIVE THAT 40% OF THEIR BUSINESS TO THOSE REPUTED BROKERAGES THEY FELT BEST SERVICED THEIR NEEDS – PERIOD! WE DID NOT FORCE ANYONE! I have the privilege of managing a RE/MAX  Brokerage with nearly 150 high-caliber and dedicated Realtors. Our industry is almost 38,000 strong. We will continue to defend our rights and the value we bring to each Client!  In the end, the Consumers ultimately decide who wins!
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