Following a series of high-profile media stories highlighting the negative side of contract assignments, the Real Estate Council of British Columbia (RECBC) issued an memo to all real estate agents reminding them of their duty to identify and report any misconduct by other agents where they see it occurring.
The April 5 memo happened to be sent out on the same day that FINTRAC, the federal body responsible for tracking sources of financing in an effort to reduce money laundering, said it had issued a fine against a Canadian bank for the first time.
The pointed reminder of agents' duties comes from the RECBC’s newly appointed professional standards advisor, who is responsible for steering the self-regulation of the province’s real estate industry.
The memo says, “As a licensee, you know that it is your duty to always act in the best interests of your clients. You also have a responsibility to act in the public interest – and that means reporting the misconduct of other licensees whenever you become aware of it.
“Licensees are uniquely positioned to identify potential misconduct and prevent harm to consumers by sharing their concerns with their managing brokers and ensuring matters are brought to the attention of the Council.”
It goes on to outline a series of new and established tools for agents to file reports of misconduct, including an online FAQ and step-by-step guide for licensees.
The “Duty to Report FAQ” covers questions such as:
- What are my obligations to report misconduct?
- What kinds of conduct should I report?
- What should I do if I’m not sure if another licensee’s actions are misconduct?
- Can I make an anonymous report?
The memo concludes, “As a real estate licensee in British Columbia you are privileged to be a member of a self-regulating profession. This means that government and the public have placed their trust in you to act professionally and uphold high standards of conduct at all times.
“Where appropriate, the Council can take immediate steps to protect the public by issuing orders in urgent circumstances, suspending licences, and freezing brokerage trust accounts. That can start with a single person recognizing misconduct and taking action.”
Maureen Coleman, the newly appointed professional standards advisor at the RECBC, discussed with REW.ca the motivation behind the memo. She said, “We are always looking for ways to improve the self-regulation of the real estate industry. Many licensees already do report misconduct to the council. It seemed an appropriate time to remind licensees of their duties in light of the recent new measures we have implemented to improve self-regulation. That includes the decision to create the role of professional standards advisor, which was made back in fall 2015, before the recent headlines.
“Despite the negative headlines, we are happy that the role of the council has been raised and people are reminded that there is a place that they can go to report problems.
Coleman added, “We also want licensees to understand that we know they are doing a good job, and just want to remind them that we are here.”
The memo follows a series of well-publicized articles on so-called “shadow flipping,” which led the BC government to impose strict new rules on contract assignments, and also resulted in the Real Estate Board of Greater Vancouver (REBGV) increasing the maximum fine for agent misconduct. The province's new contract assignment rules were recently criticized by the REBGV as reactionary and short-termist in a letter to Premier Christy Clark.
Also on April 5, federal anti-money laundering agency the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced it had fined an unnamed Canadian bank $1.1 million for failing to report a suspicious transaction and a number of money transfers.
The CBC reported that it is the first time Ottawa-based FINTRAC has ever penalized a bank, and the move is being billed as a warning to thousands of other businesses.
All real estate transactions in BC are subject to scrutiny by FINTRAC, as buyers are obliged to complete a form and prove the source of their funds.
In the video below, real estate agent Alan Stewart looks at the steps agents can take to protect the industry's reputation and its ability to self-regulate.