The self-regulation of the real estate industry will scrapped, with the industry governed by a new BC superintendent of real estate who will oversee a radically overhauled Real Estate Council of BC, Premier Christy Clark announced June 29.
The announcement was in response to recommendations issued June 28 by the Independent Advisory Group (IAG), which was appointed to look into real estate misconduct and the handling of such matters by the RECBC.
Clark’s radical changes go even further than the strong recommendations set out by the IAG, which suggested dramatically increasing misconduct fines for agents and brokerages.
In addition to implementing these much stricter fines, the province will establish a new superintendent of real estate who will “take over the council’s regulation- and rule-making authority.”
The RECBC will continue to exist, but it will be restructured to ensure most of its members come from outside the industry. Currently, 14 of the council’s 17 members are from within the real estate or property management industries.
“After reading the report, our conclusion is that the privilege of self-regulation in the real estate industry must end,” said Clark in a statement.
“This report examines shady practices and challenges plaguing the real estate market, particularly in the Lower Mainland, putting consumers at risk and tarnishing the reputations of honest professionals in the sector. We will act to protect British Columbians when they are making one of their most important family investments – purchasing a home.”
The BC government announced that it fully accepts the recommendations of the IAG and will:
- Establish a dedicated superintendent of real estate, who will take over the council’s regulation- and rule-making authority to carry out the changes required to restore public confidence.
- Reconstitute the Real Estate Council with a majority of public-interest, non-industry members.
- Implement the recommended penalties, as well as increased fines for unlicensed activity and other offences.
- Allow for commissions from licensees engaging in misconduct to be taken back to the council.
- Make the managing broker responsible for ensuring the owner of the brokerage does not engage in the business of the brokerage if the owner is not a licensee.
- No longer permit licensees to offer dual agency representation.
Clark told a media conference June 29 that the provincial government will start overhauling the system in the forthcoming weeks.
Finance minister Michael de Jong said, “Government is assessing the best and fastest way to enhance transparency and consumer protection in the real estate industry.
“We are working on legislation that will expand the powers of the superintendent of real estate to address these issues, ensure appropriate public representation on the board, and implement higher disciplinary and administrative penalties.”
The Real Estate Council of BC issued this statement Wednesday afternoon:
"Today the BC Government announced their intention to end self-regulation in the real estate industry and to establish a dedicated Superintendent of Real Estate.
"The Council is ready, willing, and able to work with Government to implement the steps announced today.
"Yesterday the Real Estate Council of BC released its Independent Advisory Group’s Final Report. This report details 28 far-reaching recommendations to enhance consumer protection, all of which the Council fully supports."
On July 30, British Columbia Real Estate Association president Deanna Horn said in a statement,“The vast majority of the 20,000 REALTORS® in BC do the right thing and we welcome a dedicated Superintendent of Real Estate to improve consumer protection in real estate transactions.
“Our livelihoods depend on our reputations and I know that almost every REALTOR® in the province will be happy to see stronger penalties and enforcement for rule-breakers."