The Board has written to the District of Mission to voice concerns about a proposal to increase the business licence fee for real estate brokerages and their representatives to $1,490 (an increase of over 900%) from $148 per year, starting on January 2019. Thereafter, the fee would be increased by 1.5 per cent each year to keep pace with rising labour, expense and capital costs. The District is the only Fraser Valley municipality that charges both offices and its representatives a business licence fee.
The proposed fee increase came out of a review of the District’s existing business licence fees and costs related to services such as fire inspections, fire/rescue, the RCMP, crime prevention, engineering, development, bylaw enforcement and economic development.
A letter about the District’s proposal was sent to local businesses including local real estate brokerages on March 12, 2018. One of the Mission offices forwarded the letter to Board staff. We responded by writing to District staff and the Mayor and Council.
We said the proposed fee increase could, “have a potentially devastating impact on the seven real estate offices and 78 real estate representatives who are members of the Fraser Valley Real Estate Board and who currently work in the District of Mission.”
As well, we asked the District to consider our comments summarized below:
1. The steep increase may force local real estate offices and their representatives to re-consider the location of their business and client base.
2. If real estate offices and representatives are charged a business licence fee, they would be more appropriately included in category Level 2 – $360/year instead of Level 3 – $1,490/year. Level 2 is for a “professional” defined by the District as “any person engaged in the business of performing or offering to perform the services of a profession that is subject to occupational regulation by an enactment of the Province of British Columbia, including those professions that are subject to a self-regulating college or authority.” Other professionals fitting this description include accountants, barrister and solicitors, chiropractors and land surveyors, etc. We stated that real estate professionals are regulated by the provincial Real Estate Services Act.
(The Level 3 business licence fee is being proposed for banks, hotels, pubs, land developers, adult care/nursing homes, pharmacies, rental properties, restaurants and others.)
3. Businesses have not been provided with sufficient time to review and respond to the business licence fee changes being proposed. The letter that was sent to local businesses was dated March 12 and the deadline to respond to an online survey is only open until March 28 (the original deadline to respond was March 21).
4. Some real estate representatives who work with clients in the District are already engaged with a real estate office in another municipality to avoid having to obtain an individual business license from the District. And, any attempt by a municipality to require that a real estate representative obtain a business licence from a municipality in which their real estate office is not located would be in breach of the Real Estate Services Act of BC.
5. Information is needed on how the fee increase was calculated and how businesses would benefit from the proposed fee increase. Along with the Mission Regional Chamber of Commerce, we have the following questions: Where is the justification for classifying businesses in the proposed levels? What additional costs or services would businesses receive at each level?
6. The use of the term “Realtor” is used incorrectly by the District of Mission and the District’s reference to the Real Estate Act is incorrect as this provincial legislation was repealed by the Real Estate Services Act in 2004.
Thanks to the brokerages and Realtors who brought the Mission business licence review to the attention of Board staff. We will continue to monitor developments and inform members.
More information:
Update:
The BC Real Estate Association (BCREA) has also written to the District of Mission regarding the municipality’s proposed business licence fee increase.
BCREA says they “support the entire position of FVREB… and agrees that the District’s business licence review process raises serious concerns about the classification of Realtors in the proposed framework.”
Further, BCREA said there is ample evidence that Realtors should be considered “professionals” and therefore should be included in the Level 2 category for the business licence fee if it is applicable to Realtors. Realtors are regulated by the Real Estate Services Act co-administered by the Office of the Superintendent of Real Estate and Real Estate Council of BC. In addition, Realtors adhere to a national code of ethics – another hallmark of professionals.