Photo: David Stanley/Flickr
Recommendations made this week in a report commissioned by the Real Estate Council of BC (RECBC) may not be able to cool BC’s hot housing market, but could eventually help create a fairer environment for those buying and selling homes.
The document has been in the works since February, when the RECBC asked BC’s Superintendent of Real Estate to create and lead the Independent Advisory Group (IAG) responsible for the report. While the move was prompted by concerns about “shadow flipping” — the process of raising a property’s price by reselling it multiple times before a deal has closed — the IAG ultimately chose to take a wider approach, and focused on determining “whether the current regulatory regime adequately protects consumers and the wider public interest from real estate licensee misconduct.”
After identifying regulatory gaps and weaknesses, the IAG came up with 28 recommendations across four areas: transparency and ethics, compliance and consequences, governance and structure and public and licensee education.
The recommendations that are getting the most attention fall under the second category. Notably, the IAG is calling for the BC government to dramatically increase the maximum misconduct fines available to the RECBC — the group has suggested that fines for individual licensees rise to $250,000, with fines for brokerages increasing to $500,000. Currently misconduct fines are set at just $10,000 and $20,000, respectively.
On a similar note, the IAG wants to see both individual licensees and brokerages lose any proceeds gained from misconduct. It sees the combination of high fines and low potential for profit serving as a “strong deterrent” from engaging in inappropriate behaviour, such as deceptive dealing or making false or misleading statements.
Other IAG suggestions include reviewing licensing education and testing requirements with the aim of raising entry standards, as well as banning dual agency, which occurs when a licensee acts on behalf of both a buyer and a seller. It would also like to see the RECBC board become more balanced — currently 13 of its 17 members are part of the real estate industry.
The IAG concludes its report by emphasizing that its recommendations are aimed at improving conduct and practises in BC’s real estate industry, and stating that their implementation will require cooperation from the BC government and RECBC.
RECBC Chair Marylou Leslie said when the report was released that her organization would review the IAG’s recommendations and work toward their implementation with the BC government. However, BC Premier Christy Clark has taken another approach — in a press conference the day after the report came out, she said that the RECBC will lose the right to regulate the real estate industry, with an independent regulator being appointed in its stead.
“The point of regulation is to protect people, to protect consumers. Self regulation is a privilege,” said Clark.