Over the past 15 years, British Columbia Real Estate has seen a large increase in housing prices. Such radical changes have raised concerns regarding housing affordability, availability, investment, the dangers of an unsustainable market and the current self regulation of the real estate industry.
Many separate entities share concerns surrounding the current conditions, in turn, depicting the need for review and proposed change. The Real Estate Council of British Columbia commissioned an independent assessment to examine specific concerns. The assessment focused on key problematic areas that could contain regulatory weaknesses. Examples of such areas include transparency and ethics, compliance and consequences, governance and structure, and licensee and public education. The Special Advisory Group has come back to the Real Estate Council and the British Columbia Government with a report which includes 28 recommendations.
Examples of the some of the recommendations made to regulate the Real Estate Industry are:
Transparency and Ethics
Both pre-licensing education and mandatory continuing education be strengthened with improved content about ethics and a licensee’s duties to consumers.
The Real Estate Council implement requirements for licensees to clearly disclose the nature and limitations of the services being provided to the parties and a positive obligation to inform an unrepresented party of the opportunity and benefits of seeking their own professional services and advice of an independent licensee. Thus not terminating dual agency but mitigating the potential negative effects associated with it.
Compliance and Consequences
Government increase maximum disciplinary penalties available to the Real Estate Council to $250,000 for individual licensee misconduct and $500,000 for brokerage misconduct, and increase administrative penalties to a maximum of $50,000.
The Real Estate Council implement confidential reporting channels (for example, reporting hotlines or whistle-blower programs) for industry and the public, to facilitate reporting of licensee misconduct.
Governance and Structure
Government alter the Act to increase non-industry participation in Council’s disciplinary committees.
All “For sale by owner” activity, conducted at high volumes or for business purposes, be subject to licensing under the Act.
The Real Estate Council impose a requirement on licensees and brokerages that all contract assignments during a closing period, in which a licensee participates as agent or acquires an interest, must be received, reviewed, and filed by the licensee’s managing broker.
Licensee and Public Education
Licensees be subject to a competency based assessment that fully tests their understanding of, and ability to apply, the content of the update.
Council consider retaining professional communication advisors or additional staff with experience in consumer education and literacy, to assist with developing and implementing a comprehensive plan to increase consumer education and awareness and to restore public confidence.
The report now lies in the Government of British Columbia and the Real Estate Council of British Columbia possession. Reviewing, execution and implementation of the proposed recommendations will take time as well as cooperation from all governing bodies that are involved in the current industry. Support has already arisen as noted by Premier Christy Clark announcing that the government will be ending the industry’s self regulation. As noted in the report, there is suggestion that the report will have no effect the present market inflation.
I support the recommendations provided by the independent assessment body and believe the proposed changes to the industry are a step in the right direction for real estate in BC. If you have any questions regarding the recommendations, report or the real estate industry, please contact Denise Brown– Your Whistler Real Estate Expert!