In a press release issued on June 30, the Fraser Valley Real Estate Board outlined its position on this week’s two historic real estate industry announcements – the IAG Report recommending regulation improvements and the government’s subsequent decision to end industry self-regulation in BC.
On June 28, the Independent Advisory Group, appointed by Council in February to review BC’s real estate industry, released its final report. The 28 recommendations focus on Council’s mandate to put consumer protection first and do more to deter licensee misconduct and unethical behaviour.
In response to that report, on June 29, Premier Christy Clark announced that the government accepts the recommendations, yet in addition, will remove the industry’s ability to self-regulate. This means a new and enhanced role for the Superintendent of Real Estate, who will take over the Council’s authority in determining regulations and rules.
As the Board’s statement explains, although we’re disappointed in the government’s decision to end self-regulation, we strongly support moving forward with the IAG report recommendations and look forward to working with the new Superintendent of Real Estate once that role is filled.
What does the report contain? The IAG recommends REALTORS® and brokers face significantly higher penalties for misconduct, stricter rules and greater accountability.
Here’s a rundown of key implications for REALTORS®:
a) Breaches in RESA or Council Rules > fines up to $250,000 for individuals; administrative penalty fines up to $50,000 (Brokerages could face fines up to $500,000)
b) The ability for Council to ‘take back’ proceeds of misconduct and return the monies to victims
c) In addition to your REALTOR® Code of Ethics, a new Code of Ethics & Professional Conduct under the jurisdiction of Council – as part of re-licensing, you will be required to affirm this
d) Mandatory continuing education and testing to ensure comprehension of your ethics duties
e) The ability of Council to confirm your compliance with other rules and laws pertaining to real estate i.e. FINTRAC
f) Dual agency will no longer be permitted; to ‘double-end’ a transaction, you will be obligated to inform any unrepresented party of the benefits of independent counsel
g) Clear and full disclosure of all financial and non-financial compensation and/or benefits gained in a transaction will be required
h) A new “Working with a Realtor” style brochure to be written by Council from the viewpoint of how a consumer should protect themselves in a real estate transaction
i) New guidance and education for you on how you should review this brochure with clients to ensure its fully understood
j) New requirement to disclose of any changes to your REALTOR®/client relationship that happen while working together
k) New duty to disclose / report misconduct of fellow members
l) If you’re personally benefiting from a real estate transaction, you will be required to disclose this in writing to your Managing Broker
m) You will be prohibited from acquiring a direct or indirect interest in your own listing
n) New legislative changes re: contract assignments will also apply to FSBOs
o) You must track and be able to prove all offers in a multiple offer situation (and in the long-term, the Report recommends Council implement a real-time multiple offer registry)
p) New suitability requirements for new licensees (as well as for brokerage ownership)
q) An increase in the detection and deterrence of aggressive marketing and sales practices that target vulnerable members of the public
In addition to other implications for REALTORS® and the profession as a whole, there are also numerous recommendations pertaining specifically to Managing Brokers and brokerages requiring greater accountability, record-keeping and reporting.
The full 60-page report and Council’s announcement of that report is available on their site at http://www.recbc.ca/.