Two Quebec real estate brokers suspended for using fake bids to drive up prices

MONTREAL — Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.

Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.

Girouard is a well-known broker who previously appeared on a Quebec reality show that follows top real-estate agents in the province. She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.

The two brokers were suspended in May 2023 after La Presse published an article about their practices, including a case in which a buyer ended up paying $40,000 more than his initial offer because of a fake bid.

In February 2022, the buyer offered $410,000 on a house listed at $399,700 that Girouard was working to sell, according to the brokerage authority’s disciplinary committee. Girouard then asked Dauphinais-Fortin to come up with a second bid. Dauphinais-Fortin then convinced his then-girlfriend to sign an offer for $370,000, while assuring her that the bid would never be accepted.

After learning that a second offer had been made, the buyer increased his bid to $450,000.

In June 2022, Girouard and Dauphinais-Fortin attempted a similar scheme a second time, involving a bogus offer signed by one of Dauphinais-Fortin’s friends. That sale eventually fell through.

Girouard was also found guilty of other offences, including lying to potential buyers in October 2021 about having received a higher offer. She is facing a second disciplinary hearing this fall for other alleged offences.

In two separate decisions, members of the disciplinary committee explained that they decided not to suspend Girouard and Dauphinais-Fortin permanently, in part because they had no previous disciplinary files. Still, the committee found their offences were “very serious” and warranted heavy sanctions.

On Instagram, Girouard lists herself as a “coach of successful real estate brokers.”

Blind bidding, in which prospective homebuyers bid on a property without knowing details of other bids, is standard practice across the country. In Quebec, real estate agents are legally prohibited from disclosing details of competing offers.

Critics claim blind bidding contributes to driving up prices during bidding wars, and the province’s left-leaning opposition party, Québec Solidaire, has pushed for it to be banned, without success.

Federally, the Liberal government promised during the 2021 election campaign to table a home buyers’ bill of rights that would include a national plan to end blind bidding, but the measure hasn’t materialized.

Last December, Ontario adopted new rules that give sellers the option to use an open bidding process. Andrew Harrild, a real estate broker with Property.ca, said the measure could help increase transparency for buyers — if sellers are inclined to share information about competing bids.

“In a strong seller’s market, an open process would keep bidding wars from getting out of hand,” he said. “I think that it’s certainly a step in the right direction.”

He said it can be “very murky and uncomfortable” for buyers to be competing with almost no information about other bids.

But Harrild said open bidding wouldn’t entirely prevent fraud, because brokers could still submit fake bids that would encourage buyers to increase their offers.

“If somebody wants to be fraudulent, they can be fraudulent and they’ll always find a way to get around the rules,” he said. “It might help, but I don’t think it would stamp it out completely.”

This report by The Canadian Press was first published Sept. 11, 2024.

Maura Forrest, The Canadian Press