Disciplinary action raises questions about blind bidding in real estate
Quebec real estate brokers Christine Girouard and Jonathan Dauphinais-Fortin have been suspended for using fake bids to inflate home prices during the pandemic, a tactic that has drawn renewed scrutiny to blind bidding in the province.
The business partners received years-long suspensions, 14 years for Girouard and nine for Dauphinais-Fortin, following a disciplinary committee ruling by Quebec’s real estate brokerage authority. Both were found guilty of manipulating bids to pressure buyers into raising their offers.
The disciplinary action followed a 2023 investigation, which revealed a scheme where Girouard asked Dauphinais-Fortin to submit bogus offers to increase home prices. In one instance, a buyer who initially offered $410,000 for a home ended up paying $450,000 after learning of a fake competing bid.
Despite the severity of their actions, the disciplinary committee opted against permanent suspensions, noting that neither broker had previous disciplinary records. However, the committee emphasized that the offenses were "very serious" and deserved strict punishment.
Girouard, who promotes herself as a "coach of successful real estate brokers" on Instagram, is facing further disciplinary hearings for additional alleged offenses.
The use of "blind bidding," where buyers are unaware of competing bids, is standard practice in Quebec but has been criticized for inflating property prices during bidding wars. While there have been calls, including from Quebec’s opposition party Québec Solidaire, to ban the practice, no legal changes have been made.
Federally, the Liberal government pledged to introduce a home buyers' bill of rights to end blind bidding, but no such legislation has been implemented.
Ontario, however, introduced new rules in December 2022, allowing sellers to opt for an open bidding process, which some argue could improve transparency.
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Real estate broker Andrew Harrild believes that while open bidding could reduce the intensity of bidding wars, it wouldn’t entirely eliminate the potential for fraud.
"If somebody wants to be fraudulent, they can be fraudulent and they'll always find a way to get around the rules," Harrild told The Canadian Press. "It might help, but I don't think it would stamp it out completely."
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