There are 170 buildings (40,000 units) under construction in Toronto (2012) – signs of a bubble are looming according to Toronto Life magazine

Saturday, June 23rd, 2012

Trouble In CondoLand Toronto Life’s Compelling Exposure Of An Industry Gone Array

Charles Hanes

I am frequently called by the media to add input and perspective on articles and/or television shows focusing on the Toronto condo industry.  With over 34 years of day to day, hands-on involvement in this multi-billion dollar industry I have extensive “insider knowledge“, and quite frankly, I know where the bodies are buried!

If you are thinking of buying a Toronto condo to live in or as an investment, you will want to get your hands on this “must read” expose written by Philip Preville.  I must disclose that I am mentioned a few times in the article and I can tell you that a great deal of the research set out in this article was initiated by me during numerous lengthy telephone conversations.

I’ve got to say that I am extremely impressed with both Philip’s writing style, and more so, the unprecedented integrity that he brought to the challenge of peeling back the onion skin and layers on layers of confusing rhetoric to get to the heart of the challenge.

The article is concise and reads as a “believe it or not” novel!  The scary thing is that the examples set out in the article are but scratching the surface of a distasteful exploitation of consumers that has gone on for decades, all of the decades that I’ve been involved in the sales and marketing of residential condos in this city.

Much of the support material underscoring this article can be found in the archives of my blog.  I’ve been quietly exposing many of the issues for decades now!  That’s what brought Philip to me in the first place!

Philip brought a certain naivete to the challenge which was exactly what was needed.  A total outsider perspective and the shock of learning what developers have been getting away with since the real estate Act changed from involving ground, to include the air above the ground, resulting in the term “condominium” back in the early 1970’s.

I started in this business in 1978 as a sales trainer, brought in by the Reichmann Family to turn around their failed efforts to introduce luxury condos to Toronto.  I remember Charles (“Hunter“) Milbourne, one of the top developer sales agencies in the city today, sitting in Harbour Square with his twelve slide show projector sales presentation trying to sell condos at $50,000 (today those very same units sell at over $500,000)!

No-body new what a condo was!  And Torontonians were very hesitant to jump on the band wagon, thus the Reichmann’s were forced to bring in a high powered, high pressure sales professional to try to turn things around, and turn them around I did.  I’ve been selling condos ever since!

For years I represented developers and was frequently called in by developers when they realized they were in trouble!  I was always offended by what I saw developers getting away with, but my job was to sell their units for them and sell them I did!

About twelve years ago I had had enough and I started feeling guilty for slamming people into condo dreams that more frequently turned into night mares!  Florida had just introduced the concept of “Buyer Agency” and Canadian Realtors were terrified of the concept!

So, as usual, I concluded that Buyer’s Agent was what I should be.  In 1989 (prior to the Internet, World Wide Web, Windows Operating System, PC and all the related technology that has evolved since) I had already produced a very sophisticated interactive multimedia CD-ROM in DOS, designed to sell Toronto condos in Hong Kong.  The market in Toronto had crashed and the Communists were taking over Hong Kong so I, in my entrepreneurial vision, put the two isolated components together and came up with digital real estate!

So, a decade or so later, in 2000 I launched representing only Buyer’s of condos.  The site skyrocketed to over 40,000 “Hits” Per Day!  With over 20 years of experience in 2000 I knew all of “the good, the bad and the ugly” (to use Clint Eastwood terminology) condo buildings which is the most significant reason that any astute buyer would choose a Realtor to be their Buyer’s Agent.

And for the past twelve years I’ve knocked myself out representing buyers and enjoying every minute of my seven day a week from morning to night career choice!

The one constant spur under my saddle was the audacity by which developers exploited buyers.  Promising everything under the sun and delivering “minimum standard” is the foundational lie underscoring this industry!  I’ve written countless blogs exposing unethical developers and faced numerous threatened law suits, wasted endless numbers of hours defending myself (I don’t hire lawyers) against frivolous law suits initiated by developers to shut me up.  A simple reading of the archives of my blog can show you many developers that buyers/investors should keep away from!

It’s about time that a journalist actually do what journalists are supposed to do!  I commend Philip Preville for his precedent setting initiative that led him to write this article!  It is a start!  I also commend Rosario Marchese, Toronto MPP (“Minister of Parliament”) for Trinity-Spadina who, earlier this year introduced a private member’s bill at Queen’s Park to amend to Condominium Act, something that I’ve been lobbying for since 2000!

This is the fourth time that Mr. Marchese has tried to amend the Act; each previous attempt was brushed aside by the Liberal Government.

The whole industry has to be revamped!  The Tarion Warranty Program is a sham!  The Condo Act protects only the developers and property managers (who support them and proliferate the shell game that is pre-construction condo sales)!  City inspectors don’t inspect workmanship, rather they show up after the fact when everything is closed up and assume that proper workmanship and materials were used!  The Municipality of Toronto (the City) is as fixated on the cash grab as are all the other players!

The industry is a scam with everyone making out like bandits with the distinct exception of the consumer, whom, it is represented as being the reason all these institutions existence!

Let’s home this Toronto Life article kicks in some common sense into an industry that operates totally out of control and with implied, if not explicit impunity!

I’m volunteering to head up the organization to oversee the horrific challenge of taking this bull by the horns!  I am reassured and cautiously optimistic that Philip’s hard work and journalistic integrity may just have cracked the invisible glass wall that shuts consumers out of the “happy ever after” scenario that historically has benefited only developers in this industry.

Stay tune!

I’m Charles Hanes

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