Canada's Condominium Magazine
The Real Estate Council of Ontario recently questioned the use of cryptocurrency in real estate transactions. The concern stems from a growing trend of transactions made using bitcoin and other cryptocurrencies rather than cash, and the council is debating whether or not to allow such transactions to take place.
Senior adviser of external communications Daniel Roukema discussed the council’s position on the matter and the decision that lies ahead. “RECO is currently reviewing the use of cryptocurrencies, such as bitcoin, in real estate transactions. The decision to accept cryptocurrencies would be based solely on the law, our code of ethics, and assurances that consumers will be safeguarded and no harm can come to people involved in buying and selling real estate in Ontario.”
Roukema stated that the issue lies in an inability to hold cryptocurrency in trusts, unlike bank funds that are typically used in real estate purchases. British Columbia’s council has already banned such purchases as a safety precaution.
According to RECO registrar Joseph Richer, the council does recognize the validity of new forms of currency and the merits behind their use, though they warn users to remain vigilant and back out if anything does not seem right. While they can prohibit brokerages from accepting cryptocurrency in transactions, it does not impose such restrictions on individual sales and purchases. Furthermore, these transactions are outside of their jurisdiction, meaning that they cannot intervene if anything goes wrong.
“RECO does not regulate buyers and sellers, and if a transaction were to occur between two parties without the involvement of a brokerage, it would be outside of RECO’s purview to determine the legality or feasibility of that transaction,” said Roukema in a statement. “RECO cautions buyers and sellers to take steps to protect themselves in real estate transactions and to seek legal advice when considering the use of cryptocurrency in a real estate transaction.”
Despite safety concerns, a growing number of people have jumped on board, hoping to secure a deal through the use of cryptocurrencies. Condominiums and other properties around Ontario have begun to accept bitcoin for up to the full purchase price. Local businessman Derryn Shrosbree recently listed his two-bedroom condo in Mississauga, Ontario for sale with the purchase price of 35 Bitcoin, a valuation of approximately $450,000.
While the decision to solely accept bitcoin for the unit has drastically limited the number of potential buyers, Shrosbree states that the decision serves as a sort of experiment designed as well as a way for bitcoin users to invest in a stable asset. “It’s fairly difficult to get rid of blocks of bitcoin quickly, so real estate is a natural fit for that. If people want to get rid of 30 or 40 coins at a time, it’s kind of a good way to do it through property.”
Shrosbree has the help of real estate agent Brett Starke to sell the condo. The agent was all too happy to aid in the sale. Starke sees the move as a potential to open up the real estate market to even more people. While it does limit the current pool of buyers, it does allow cryptocurrency users to purchase real estate. This is especially beneficial for foreign buyers, as cryptocurrency is universal. “For example, if I live in a country where I can’t get my money out of the country, but I can get it into bitcoin, then it gives me the opportunity to enter the Toronto real estate market.”
Although people have come forward, ready and willing to accept these cryptocurrencies for purchases, none of the properties thus far have sold. Many have been taken off the market, and others are hanging by a thread. If Shrosbree’s condo sells, it will be the first in Canada to do so.