Contents

Council Mandate Message from the Chair Message from the Executive Officer Organization of Council

Performance Review Committees Financial Review Auditors’ Report & Financial Statements

Council Mandate

The Real Estate Council of British Columbia is a regulatory agency established by the provincial government.

Its mandate is to protect the public interest by enforcing the licensing and licensee conduct requirements of the Real Estate Services Act. The Council is responsible for licensing real estate representatives, brokers and brokerages engaged in real estate sales, rental and strata property management. The Council also enforces entry qualifications, investigates complaints against licensees and imposes disciplinary sanctions under the Act.

Within its terms of reference, the Council is responsible for ensuring that the interests of consumers, who use the services of real estate licensees, are adequately protected against wrongful actions by the licensees. A wrongful action may be deliberate or may be the consequence of inadequate exercise of reasonable judgment by a licensee in carrying out the normal duties and responsibilities as a licensee while acting for the parties involved in the transaction.

The Council is also responsible for determining what is appropriate education in real estate matters for individuals seeking to be licensed as real estate practitioners and arranging for licensing courses and examinations as part of the qualification requirement for licensing. Under the authority of the Council, licensing courses are conducted by the University of British Columbia’s Sauder School of Business, Real Estate Division, Vancouver.

The first Council was appointed in 1958. The effectiveness of the Council and recognition of its mature discharging of its responsibilities are evidenced by the fact that for over 54 years, successive governments have not considered altering the Council’s considerable powers but have, instead, broadened its role and delegated additional responsibilities to the Council.

On January 1, 2005, the Real Estate Services Act replaced the former Real Estate Act. The Real Estate Services Act significantly expanded the regulatory authority and disciplinary powers of the Real Estate Council. On January 1, 2006, the licensing requirement for strata managers took effect in the province and requires anyone who provides strata management services to a strata corporation to be licensed under the Real Estate Services Act.

Mission

The Real Estate Council of British Columbia protects the public interest by assuring the competency of real estate licensees in BC and ensuring their compliance with the Real Estate Services Act. The Council is accountable to and advises government on industry issues and encourages public confidence by impartially setting and enforcing standards of conduct, education, competency and licensing for real estate licensees in the province.

Vision

A self-regulated organization that is a leader in industry integrity, innovation and viability.

Characteristics envisioned for the Council in the future include an organization that:

• is nimble and quick to respond to changing industry business models;
• encourages professionalism in the industry to protect consumers;
• is creative in approaches to effective industry discipline; and
• leverages emerging technology for efficiency.

Values

The Council operates with the following principles and values:

Experience and Dedication	Council members are experienced real estate licensees and public appointees, dedicated to protecting the public interest in real estate services and to improving the industry.
Consultative Approach	Council supports a regular consultative approach with industry groups, government and the public.
Impartial, Effective Processes	Council members and staff are impartial in setting and enforcing standards of conduct through effective education, licensing, and compliance processes.
Cost-effective & Responsive Services	Council management and staff work to provide cost-effective, responsive services to consumers and the real estate industry by using current professional business practices and technology.
Open Communications & Trust	Council members and staff work co-operatively to create a working environment where frank and open communications and trust prevail.

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Message from the Executive Officer

Earlier this year, the Council approved a new strategic plan which contains over 20 tasks, projects or strategic initiatives under the goal areas of Governance, Stakeholder Communications, Education & Training, Discipline, and Efficiency & Responsiveness. Many of the immediate tasks have either been completed or are underway while others will require more detailed planning.

Under the goal area of Governance, the Council accepted staff recommendations to reduce the amount of time individual Council Members are required to devote to Council business. The changes include reducing the number of Council meetings from eight to seven and reducing the number of Council committees in favour of striking more advisory groups with representation from both licensees and industry professionals engaged in various practice areas.

Stakeholder Communications initiatives include initiating surveys of licensees and real estate consumers and holding focus groups to provide input on current issues in the real estate industry.

Education & Training initiatives include working with the British Columbia Real Estate Association on improvements to the Applied Practice Course. At the end of June, a revised Broker’s Licensing Course was launched by the UBC Sauder School of Business in cooperation with the Council.

Discipline initiatives include a review of fines and suspensions currently levied by the Council as compared to other Canadian real estate regulators and other BC regulated professions. In addition, the Council will be reviewing the Real Estate Council of Alberta’s approach to Alternative Dispute Resolution. Licensee seminars on the top ten most prominent trading services complaints will be added as a result of the very successful top ten strata complaints seminars that were held throughout the province in 2012.

In the area of Efficiency & Responsiveness, a number of IT projects have been completed, including making the Report from Council newsletter available in a more dynamic online format. In addition, the Council’s internal communications for meetings have moved from paper to a secured web portal and the Council’s July 2012 meeting was the first meeting where electronic devices were utilized rather than paper agendas. Council staff continues to work on a new online licence renewal and payment module which is expected to be in place by the spring of 2013.

All of these initiatives take time and staff resources and an annual planning session has been added to the Council agenda to ensure that these planning initiatives are monitored. Speaking of staff, the Council is well served with many long-serving staff who are committed to the work of the Council and I feel fortunate to work with so many dedicated individuals.

In closing, I would like to thank Chair Bryon Brandle, Vice-Chair Michael Ziegler and the other members of the Council for their support over the last year. In addition, I would also like to thank our advisory groups and committee members for their work and guidance.

Robert O. Fawcett
EXECUTIVE OFFICER

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Organization of Council

The Appointed and Elected Representatives of the Council

Council Members
There are 16 members of the Real Estate Council, including three members appointed by the provincial government. Thirteen members are chosen through an election process open to all real estate licensees in the province. The elected members are comprised of three representatives and nine brokers representing the various provincial counties. One individual is elected as the rental/strata management member. Those elected have traditionally been individuals of broad experience who enjoy the professional respect of their fellow licensees. Members are elected for two-year terms, with half of the Council elected each year, thus ensuring continuity. A Chair and Vice-Chair are elected each year by the members.

Members of Council 2011/12

Bryon Brandle (Chair) County of Yale Managing Broker Member Term ends June 30, 2013	Michael Ziegler (Vice-Chair) County of Victoria Managing Broker Member Term ends June 30, 2013	Barbara Barry West Vancouver Lieutenant Governor-in-Council Appointment Term Ends June 30, 2014	John Nagy Delta Lieutenant Governor-in-Council Appointment Term ends June 30, 2012
Bruce Turner Courtenay Lieutenant Governor-in-Council Appointment Term ends June 30, 2012	J. Garth Cambrey County of Vancouver Rental/Strata Management Member Term ends June 30, 2013	William (Bill) Binnie County of Vancouver Managing Broker Member Term ends June 30, 2012	Patrick O’Donnell County of Vancouver Managing Broker Member Term ends June 30, 2013
William (Bill) Phillips County of Vancouver Managing Broker Member Term ends June 30, 2012	Abdul Ghouri County of Vancouver Representative Member Term ends June 30, 2013	Subhadra Ghose Combined Counties of Victoria, Nanaimo, Yale, Kootenay, Cariboo & Prince Rupert Representative Member Term ends June 30, 2012	Susan McGougan County of Nanaimo Managing Broker Member Term ends June 30, 2012
Marylou Leslie County of Westminster (North and South of the Fraser River) Representative Member Term ends June 30, 2013	Marshall Cowe County of Westminster (North of the Fraser River) Managing Broker Member Term ends June 30, 2012	Gerry Martin County of Westminster (South of the Fraser River) Managing Broker Member Term ends June 30, 2012	Susan Lynch Combined Counties of Kootenay, Cariboo and Prince Rupert Managing Broker Member Term ends June 30, 2013

Staff
The day-to-day management of the Council staff is the responsibility of the Executive Officer. The management team and staff support the delivery of programs and services for consumers and licensees. As of June 30, 2012, the Council staff consisted of 39 full-time employees.

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Performance Review

Continuing the Council’s mandate of protecting the interests of consumers who use the services of Real Estate Licensees

Education
The administration of licensing courses has been delegated to the Real Estate Division at the Sauder School of Business, University of British Columbia, a task which it has been doing for over 54 years. British Columbia is the only jurisdiction in Canada that engages a university to oversee initial licensing education. This arrangement has, no doubt, enabled British Columbia to have some of the highest educational standards in North America.

For the Council’s year ending June 30, 2012, the number of licensees that had taken the Council’s Trading, Rental and Strata licensing courses decreased slightly to 3,860 compared with 4,044 the year prior. The number of individuals that took the Broker’s licensing course also decreased to 169 compared with 196 the year prior. It should be noted that not all individuals who enroll in the licensing courses go on to obtain their real estate licence, as many individuals either do not complete the course, fail the course examination, or withdraw from the course.

Broker’s Licensing Course	79	104	119	115	303	234	160	190	196	169
Trading, Rental Property & Strata Management Services Licensing Courses	2,688	4,345	4,427	5,486	5,024	4,760	2,451	4,590	4,044	3,860

Licensing
Under the authority of the Real Estate Services Act, the Council is responsible for determining what is appropriate education for individuals seeking to be licensed as real estate practitioners, including real estate representatives, associate brokers and managing brokers engaged in real estate sales, rental and strata property management. In addition to establishing licensing guidelines and reviewing licensing courses, on a daily basis the Council considers a multitude of education and experience exemption requests from both licensees and members of the public.

The Council is responsible for all licensing procedures associated with both individuals and brokerages under the Real Estate Services Act. The Council administers a number of processes in connection with the issuance of licences, including the following:

• determining suitability for all licence applicants, including
  • conducting criminal record checks;
  • conducting credit history checks;
• ensuring that each brokerage has a managing broker in place;
• ensuring that brokerages maintain a proper place of business.

The Council issues licences in the following categories: Trading Services, Rental Property Management Services, and Strata Management Services.

The number of individuals licensed in the province increased to a new all time high with 20,986, up from 20,762 last year. Over the past 10 years, the number of managing and associate broker licensees has remained consistent, averaging about 3,200 while at the same time the number of representative licensees has increased dramatically from 9,390 in 2001/02 to 17,942 in 2011/12.

Representatives	9,390	9,985	11,033	12,487	14,042	15,649	17,071	16,178	17,065	17,655	17,942
Managing/ Associate Brokers	3,378	3,375	3,358	3,240	3,367	3,562	3,193	3,164	3,124	3,107	3,044
Total	12,768	13,360	14,391	15,727	17,409	19,211	20,264	19,342	20,189	20,762	20,986

Licensees in the province may be licensed to provide trading and/or rental and/or strata management services. The following chart shows the number of licensees by service category.

Rental	272	304	331	350	395	434	446
Rental & Strata	211	231	255	268	272	270	288
Strata	281	304	318	359	409	442	454
Trading	7,514	9,330	10,654	10,420	11,376	12,214	12,853
Trading & Rental	8,715	8,607	8,240	7,517	7,306	6,971	5,903
Trading, Rental & Strata	405	416	442	405	411	411	420
Trading & Strata	11	19	24	24	21	20	19

 

Continuing Education
The Relicensing Education Program (REP) took effect on January 1, 2007 and requires licensees to complete education courses during the licensees’ two-year licence period as a condition of continued licensing. The Council continues to adapt REP so that licensees can more easily incorporate the culture of continued education into their real estate practice.

Office and Records Inspection Program
The mandate of the Council is to ensure that all licensed brokerages in the province have proper controls in place to protect trust monies at all times. In order to assist with this, the Council has been performing office and records inspections since 1967. The objective of an office and records inspection is to provide constructive feedback to the brokerage by identifying any deficiencies in the office and records as required by the Real Estate Services Act. The legislative authority, which allows the Council to perform an office and records inspection, is found in the Real Estate Services Act. The Act is very broad and allows auditors access to any documents which may relate to the brokerage’s dealings as a licensee.

Office and records inspections are conducted on the following priority basis:

1. as a result of complaints from consumers, licensees or the Superintendent of Real Estate;
2. as a result of exceptions on Accountant’s Reports;
3. as a result of previous spot audit reports showing deficiencies;
4. new brokerages involved in rental property management or strata management, followed by those engaged in trading services;
5. new branch offices that handle trust funds; and
6. as a result of suspensions due to disciplinary orders.

The following chart shows the number of Council office audit and inspections over the past several years. The chart shows priority and follow-up audits, as well as 1st year and procedural inspections.

Priority Inspections and Follow-up	96	70	122	133	158	110
1st Year and Procedural Inspections	99	80	106	75	121	122
Totals	195	150	228	208	279	232

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Complaints
Where a complaint has been received from a consumer or a licensee, the Council may conduct an investigation to determine whether a licensee has committed professional misconduct or conduct unbecoming a licensee within the meaning of the Real Estate Services Act. The Council may also conduct an investigation on its own initiative. This could include, for example, where the Council becomes aware of a court decision or news report that suggests professional misconduct or conduct unbecoming on the part of a licensee.

The basic purpose of the investigation is to determine whether a licensee has committed:

• professional misconduct by conduct that:
  • contravenes the Real Estate Services Act, Regulation, Bylaws or the Rules
  • contravenes a licence restriction or licence condition
  • demonstrates incompetence in performing any activity for which a licence is required
  • misappropriates or wrongfully converts money or other property entrusted to or received by the licensee in relation to the provision of real estate services
  • fails to comply with an order of the Council, a Discipline Committee, or the Superintendent of Real Estate
• conduct unbecoming a licensee if the licensee engaged in conduct that:
  • is contrary to the best interests of the public
  • undermines public confidence in the real estate industry
  • brings the real estate industry into disrepute.

The Council appoints a Complaints Committee that has the responsibility for reviewing those complaints that have not been summarily resolved, together with the responses received from the licensee and the results of the Council’s investigation. The Complaints Committee, assisted by the Council staff, has the right to further investigate the facts and circumstances of the complaint and the response received from the licensee. This investigation may include an inspection of the books, documents and records of the licensee. If the Complaints Committee is satisfied that there is no indication of professional misconduct or conduct unbecoming a licensee, the Committee will dismiss the complaint and close the file, and the Complainant and the licensee are so informed. If it appears that a licensee may have committed professional misconduct or conduct unbecoming a licensee, then the recommendation of the Complaints Committee will depend upon the apparent seriousness of the contravention. The Complaints Committee may recommend:

• a letter of warning
• a formal disciplinary hearing

The number of complaints received at the Council office for the year ending June 30, 2012 increased to 503, up slightly from 493 last year. This is the second year in a row that the number of complaints has remained around the 500 mark and may be indicative that the number of complaints is on a leveling trend. As noted last year, many factors, including the supervision of managing brokers and the industry’s Professional Development Program, may have helped to reduce the overall number of consumer complaints.

Complaints Received

461

543

563

574

562

493

503

 

Disciplinary and Hearing Processes
The Council has the authority, pursuant to sections 40 and 42 of the Real Estate Services Act, to hold formal disciplinary hearings. At the conclusion of the hearing, the Discipline Committee will retire to reach a decision. A written decision of the Discipline Committee is usually communicated within 30 days to the licensee and the complainant.

In some circumstances, the facts in a matter may be fairly straight forward and, as a result, there may be no argument regarding what happened. Also, a licensee may wish to admit to some or all of the Council’s allegations. If the licensee and the Council staff agree, an agreed statement of facts may be submitted to the Discipline Committee. This could eliminate the necessity of calling witnesses and, while the hearing would still proceed, it could be reduced in scope and less costly for all parties involved.

In the event that a licensee wishes to admit the allegations and consents to a Discipline Committee making a specified order under section 43 of the Real Estate Services Act, the licensee may make a proposal under section 41 to settle the matter by way of a Consent Order. This process avoids the necessity of a formal hearing and can save considerable time and expense for the licensee. A proposal includes an agreed statement of facts, appropriate admissions and a request as to outcome on terms acceptable to the Council legal staff. Once a draft proposal has been settled by the licensee and the Council’s legal staff, it will then be reviewed by a Discipline Committee called a Consent Order Review Committee. This committee may accept, reject or counter the proposal.

The Council entered into 97 Consent Orders for the year ending June 30, 2012, down from 113 last year. While below last year’s level, the number of Consent Orders handed out in 2011/12 is consistent with the longer term trend over the past several years. The Council held one formal discipline hearing last year, down from four the year prior. The Council also held five qualification hearings—a form of hearing to determine the suitability of individuals for licensing under the Real Estate Services Act.

Hearings Held	16	14	10	5	6	4	1
Consent Orders	42	59	87	96	96	113	97
Qualification Hearings	3	15	9	4	10	13	5

 

Sanctions
The Real Estate Services Act allows the Discipline Committee to impose a range of disciplinary sanctions if it determines that a licensee has committed professional misconduct or conduct unbecoming a licensee. If there is such a finding, section 43(2) of the Real Estate Services Act requires the Discipline Committee to, by order, do one or more of the following:

• reprimand the licensee;
• suspend the licensee’s licence for a period of time and/or until specified conditions are met;
• suspend the licence in urgent circumstances
• cancel the licensee’s licence;
• impose restrictions or conditions on the licensee’s licence, or vary any applicable restrictions or conditions;
• require the licensee to:
  • cease or carry out any specified activity related to the licensee’s real estate business;
  • enroll in and complete a course of study or training;
  • pay a disciplinary penalty in an amount of not more than $20,000 in the case of a brokerage or former brokerage, or not more than $10,000 in any other case.

The Council may also recover enforcement expenses in accordance with section 44 of the Real Estate Services Act.

The overall number of discipline decisions handed down by the Council in 2011/12 was relatively consistent with the year prior. The number of licence suspensions remained consistent at 43 compared with 47 the year prior, while the number of discipline penalties increased slightly to 24 compared with 21 over the same period. The number of licence reprimands increased to 76 compared with 57 the year prior. There were also four withdrawals from the industry, up slightly from three the year prior. Withdrawals from the industry occur in situations where a licensee requests that the Council discontinue disciplinary proceedings against them as the licensee has decided to agree to a lifetime ban from real estate practice in British Columbia.

Licences Reprimanded	32	40	47	64	60	57	76
Licences Suspended	34	31	55	39	40	47	43
Licences Suspended in the Public Interest	2	2	0	0	2	2	2
Licences Cancelled	3	5	2	4	0	0	0
Discipline Penalties	0	12	15	27	22	21	24
Withdrawals from industry	5	3	1	1	8	3	4

 

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Committees & Advisory Groups

Council Meetings and Decision Processes

Council members serve on a number of standing committees and advisory groups. Various issues that arise at Council meetings, as well as matters brought forward by staff, are discussed at committee/advisory group meetings. Staff provides research assistance, as well as makes recommendations where appropriate. Once a particular issue has been researched and a solution agreed upon, the matter is then brought forth to the Council as a whole. The Council will then discuss the issue and either ratify the recommendation, send it back to the committee/advisory group for further investigation or reject it. The Council generally meets eight times per year.

 

Committee/Advisory Group Name	Authority	Responsibilities
Communications Committee	The purpose of the Committee is to effect the implementation of the Council’s Communications Plan in order that the Council can communicate efficiently and effectively with stakeholder.	to effect the implementation of the Council’s Communications Plan; to effect the updating of the Council’s printed materials; to effect the updating of the Council’s website www.recbc.ca; to research and report on any miscellaneous topics referred by the Council.
Complaints Committee	The purpose of the Committee is to review complaint files referred to it by the Council staff. The Committee will decide whether the complaint file should be referred to a hearing, a letter of warning issued, or dismissed.	may determine the number of times it must meet during the Council year and will report the disposition of complaint files to the Council; to review all complaint files referred to it; to ensure that complaints against licensees that may involve criminal conduct are forwarded to the Office of the Superintendent of Real Estate; to order hearings where a licensee commits professional misconduct or conduct unbecoming a licensee, pursuant to section 35 of the Real Estate Services Act; or may not be suitable for licensing, pursuant to section 10 of the Real Estate Services Act; to issue letters of warning for minor or technical contraventions of the Real Estate Services Act in which there has been no harm to consumers; to dismiss complaints where there is no evidence of a contravention of the Real Estate Services Act and to provide sufficient reasons to the complainant; where appropriate, may also direct the Council staff to issue a letter of dismissal with advisement to a licensee with suggestions for improved business practices; when requested by staff, to review charges on their assigned files for which hearings have been ordered; to research and report on any miscellaneous topics referred by the Council.
Consent Order Review Committee	The purpose of the Committee is to review proposed Consent Orders submitted on behalf of licensees.	to review proposed Consent Orders and either accept, vary or reject penalty recommendations; to ensure that Consent Orders result in fair and appropriate decisions; to provide written reasons to licensees or their legal counsel in instances where they are rejecting a Consent Order proposal and the reasons for the counter proposal.
Education and Licensing Committee	The purpose of the Committee is to consider and report on education exemptions and licensing requests.	to consider and report on education and licensing requests referred from staff; to liaise with the Education Advisory Group to ensure that the Council is well informed with respect to pre and post licensing educational issues; to research and report on any amendments to legislation affecting education and licensing; to research and report on any miscellaneous topics referred by the Council.
Governance and Management Committee	The purpose of the Committee is to identify education and training for Council and Committee members that will enhance leadership development within the organization, to attract qualified candidates to run for the elected positions on the Council and to assist the Council in meeting its fiduciary responsibilities.	to identify and recommend education and training for Council and Committee members that enhance leadership development within the Council; to attract qualified candidates to run for elected positions on the Council; to review the annual budget prepared by staff and recommend its acceptance to the Council; to review monthly financial statements; to review staff recommendations re capital expenditures and technology requirements; to recommend the appointment of the Council’s external auditor; to review the audited financial statements with the Executive Officer and the auditors at the conclusion of the audit; to review the auditor’s Management Letter and ensure that any recommendations are dealt with in an expeditious manner; to recommend to the Council the acceptance of the auditor’s report and the financial statements; to provide a sounding board for the Chair, Vice-Chair and Executive Officer; and to review any matters which fall outside the terms of reference/charges to other committees.
Hearing Committees	The purpose of the Committee is to hear matters referred to it by the Complaints Committee or Council staff.	pursuant to section 83 of the Real Estate Services Act, to conduct: disciplinary hearings under Division 2 [Disciplinary Proceedings] of Part 4; compensation hearings under Part 5 [Payments from Special Compensation Fund]; any other hearings required or authorized to be conducted; to render fair and appropriate decisions in a timely manner.
Industry Review Committee	The purpose of the Committee is to research and report on miscellaneous topics and legislation affecting real estate.	to research and report on any miscellaneous topics referred by the Council; to research and report on any amendments to legislation affecting real estate; to solicit from Committee members information with respect to any emerging trends related to real estate practices for research, discussion and possible recommendation to the Council; to review common areas of practice that give rise to complaints and identify topics related to those areas of practice for development of articles for publication in upcoming Reports from Council newsletter and the Professional Standards Manual/Brokerage Standards Manual.
Property Management Committee	The purpose of the Committee is to liaise, research, and report on topics involving property management.	to liaise with the Rental Property Management and Strata Management Advisory Groups to ensure the Council is well informed with respect to property management issues; to make recommendations with respect to the Rental Property Management and Strata Management Licensing Courses and the Rental Property Management and Strata Management Supplemental Courses; to research and report on any amendments to legislation affecting rental property and strata management; to research and report on any miscellaneous topics referred by the Council.
Real Estate Services Act Committee	The purpose of the Committee is to review any legislation, including rules, bylaws, and regulations.	to review any draft legislation for comment at the request of the Strategic and Corporate Policy Division, Ministry of Finance; when appropriate, to make recommendations for consideration by the Council on any legislation.
Education Advisory Group	The purpose of the Education Advisory Group is to provide the Council with access to expertise in real estate education.	provides the Council with input for the purposes of improving the licensing courses, and the Commercial/Residential Trading Services Applied Real Estate Course; functions as a conduit for information in continuing with the Relicensing Education Program; attends to such other duties as assigned by the Council; serves as a vehicle by which industry organizations are able to bring concerns or recommendations to the attention of the Council.
Rental Property Management Advisory Group	The purpose of the Rental Property Management Advisory Group is to provide the Council with access to expertise in the varied functions of rental property management.	to access expert knowledge in the field of rental property management; to seek input on issues consistent with its mandate; serves as a vehicle by which rental property management industry organizations are able to bring industry concerns or recommendations to the attention of the Council.
Strata Management Advisory Group	The purpose of the Strata Management Advisory Group is to provide the Council with access to expertise in relation to the management of strata corporations.	to access expert knowledge in the field of strata management; to seek input on issues consistent with its mandate; serves as a vehicle by which strata management industry organizations are able to bring industry concerns or recommendations to the attention of the Council.

 

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