There’s some upheaval going on in the entertainment business these days. Agents and managers representing actors and musicians are blurring the lines between acting as agents for their clients and owning the shows in which they appear. As owners of the shows, they control what they pay and even who appears in those shows.
To many people, including me, that compromises what they are supposed to be doing; acting in the best interests of their clients. If they keep their clients’ pay low to help the show make money or tell their clients that they have to take a cut to help the show, then they are taking advantage of their talent instead of representing their best interests. Most people, including me, think that while it might be legal, it is wrong.
Years ago the Canadian government rolled out the Railway Act of Canada, which stated that a railway could not own what they transported. That prevented any conflict of interest. For example, if they owned a furniture company they could give cheap transportation and priority to their furniture rather than a competitor’s furniture.
Today, telecom companies own many of the products they sell, such as sports teams and other entertainment shows. That is clearly not right. Rogers, for example, owns the Blue Jays. They give them priority on channel positions and promotion over many other sports because they own the team, Bell owns television shows and blatantly promotes them and places them in prime time slots over independent shows produced by competitors because they own the shows. This may not be a violation of the law but it is a clear violation of fair practice and it should be against the law. Cable companies and telecom companies in Canada have many shameful positions on what is right for their subscribers. They are wrong.
Some organizations do have integrity selling that deserves greater acknowledgement. Car companies, for example. You cannot buy a car directly from major auto makers. It is illegal to do so in America and although it is not illegal in Canada, General Motors and Ford and Chrysler simply don’t do it because they respect the franchise system of sales dealers they have across the country. So it is not the law in our country, it is just the right thing to do. I congratulate them for this.
Which brings us to the debate of a real estate agent selling property that they own or a real estate salesperson buying property for themselves. It is currently perfectly legal for a licensed sales rep to represent themselves to buy a house and sell it if they want, with full disclosure.
I suggest that the industry give this situation a long hard look. It seems to me that a person who is active in the real estate business has every right to look at and buy a house, the same as anyone else in this country. What might be given full and thoughtful consideration is whether that person should be represented by another professional real estate rep.
We live in a day and age of suspicion. From cable company operations to government regulations we worry every day about the honesty of those around us and those in charge of our lives. Questions of integrity are present on every corner. It does seem that showing professionalism may be the greatest challenge that the real estate business has today. It is not illegal for a sales rep to do their own transaction; it is just how it appears.
The gesture of real estate agents hiring other agents to handle the transaction would go a long way to assuring the public that people in the real estate business today believe in the importance of conducting affairs with the highest integrity and professional standards.
It is my understanding that if a real estate agent buys and then down the road, sells their principal residence, they do not pay taxes on any money they made. However, if they make money as commission of that sale, they must pay taxes on that income. So why not hire a licensed sales rep to handle the transaction and keep it completely transparent to the public? It seems if there was a protocol like that it would help this industry a good deal. And right now, this business could use a gesture of integrity.
Heino Molls has been the Publisher of REM, Real Estate Magazine (formerly Real Estate Marketing), since 1989. Previous to REM, he worked as an executive at the Toronto Real Estate Board (TREB), and at the Toronto Star. Contact Heino by email or call 416-425-3504 x2.
