The February 2011 Report from Council contained an article which addressed the Consent Agreement between the Competition Bureau and the Canadian Real Estate Association (CREA), including how the Council Rules relate to that agreement. The 2011 article focused on the requirements of the Council Rules for BC licensees who are providing ‘mere posting’ services. Highlighted was the importance of licensees ensuring that consumers understand.
- the nature of the representation, if any, that the licensee is providing,
- the scope of services that will be provided, and
- any other relevant terms or conditions related to the service.
The article also advised that the Office of the Superintendent of Real Estate (the ‘Superintendent’), which has jurisdiction over questions related to unlicensed activity, was reviewing the issue of people who are not licensed in British Columbia, but who are licensed in another jurisdiction, providing ‘mere posting’ services related to real estate located in British Columbia.
For certainty, the Competition Bureau/CREA Consent Agreement defines a ‘mere posting’ as “a listing on a Member board’s MLS® System in respect of which the Member has chosen or agreed not to provide services to the Seller other than submitting the listing for posting on a Member Board’s MLS® System.”
There is an exemption in section 2.10 of the Regulations under RESA for “A person who is providing trading services only by providing information (including)… the publication of information contained in an advertisement of specific real estate”.
The Superintendent has advised that in order to determine whether this exemption applies, or whether licensing in BC is required, it is important that it is clear whether a listing is a ‘mere posting’ or whether other real estate services are being offered or provided. This is important because the provision of other real estate services in addition to a ‘mere posting’ service would require licensing in BC. This determination would need to be made on a case by case basis; typically this would include a review of the service agreement as well as any evidence of actual services being provided.
Questions regarding unlicensed activity should be directed to the Office of the Superintendent at 604-660-3450. Licensees with questions regarding the Competition Bureau/CREA Consent Agreement should direct those questions to their local real estate board. Questions regarding the Council Rules should be directed to the Council office at 604-683-9664, toll-free 1-877-683-9664, or email email@example.com.
Last month, licensees received an email from the Council highlighting the Council’s 2011/12 Annual Report. The Annual Report contains information about the role and operations of the Council, as well as statistical information about complaints and discipline taken by the Council over the past year. If you haven’t done so already, I encourage you to visit the Council’s website at www.recbc.ca/about/ar.html and take a look at the latest Annual Report.
Over the past several months, the Council has noticed an increase in the number of complaints from managing brokers relating to licensees not providing copies of transaction records to the brokerage in a timely manner. I remind licensees that the obligation to provide these records to a brokerage ‘promptly’ means they must be provided without delay. Managing brokers play an important role in maintaining active charge of a real estate office and, in order to effectively accomplish this, licensees must provide managing brokers with copies of all transaction records.
For those licensees involved in providing strata management services, the article on page five provides a reminder of the requirement to disclose remuneration and benefits received in relation to strata management services. The Council has developed disclosure forms for strata management services that are available on the Council’s website at www.recbc.ca. Licensees may use these forms, or any form of the licensees choosing so long as it satisfies the disclosure requirements set out in section 5-11 and 5-12 of the Council Rules.
Finally, the Council continues to see significant numbers of consumer complaints made against real estate licensees. The discipline section of this newsletter contains the resulting sanctions, including in one case a $5000 disciplinary penalty, made against licensees for failure to exercise due care and skill in the performance of duties. I urge all licensees to ensure that they are competent to render services to the public prior to doing so. If you do not possess the knowledge in a particular practice area (ie. commercial, farm, rural, sale of stratas, etc.), you should refer the business to another licensee with expertise in that area. Consumer interest must always come first when providing real estate services.
On behalf of Council members and staff, I wish you a busy, productive and enjoyable fall.
Receive the Council Newsletter by Email
In the past eight months, over 6,400 licensees have opted to receive the Report from Council newsletter by email. Licensees wishing to receive the Report from Council newsletter by email instead of hard copy can email the Council office at firstname.lastname@example.org. Please include your full legal name in your email, as well as the preferred email address that you would like the Council to use.
Email Address changed? Licensees are required to update the Council if their email address changes. Email address changes can be sent to email@example.com.
The Council, at its September 2012 meeting, approved changes to its Rules and Bylaws as shown below. The changes to the Council Rules relate to time frames allowed in relation to the writing of licensing examinations. These changes are intended to increase examination security. The change to the Bylaws relates to the annual financial reporting procedures required of brokerages.
The Rule and Bylaw changes come into effect January 1, 2013. Licensees with questions can contact the Council at 604-683-9664, toll-free 1-877-683-9664 or email firstname.lastname@example.org.
|This change requires an individual who fails a licensing examination more than once to retake and successfully complete the applicable licensing course before being eligible to again write the examination. The purpose is twofold: firstly, to ensure applicants are sufficiently familiar with the course materials, and secondly, to increase exam security by lowering the risk of individuals re-writing the exam on several occasions over a short period of time in order to memorize exam questions.|
Educational requirements for new licensees
|This change limits the amount of time an individual may have to write the licensing examination to a maximum of 2 years from the completion of all course assignments. The purpose of this is again to increase candidate knowledge of course material and to increase exam security.|
4–9 Annual accountant’s report
|The annual accountant’s report required to be submitted to the Council by each brokerage includes a certification which must be completed by a managing broker and a director, officer, partner, or sole proprietor of the brokerage. Subsection 4–9(7) details matters which must be certified. The additions include verification that pertinent correspondence between the brokerage and the council has been provided to the reporting accountant.|
Strata management licensees must disclose remuneration and benefits received in relation to their services.
Disclosure of Remuneration
Section 5-11 of the Council Rules requires that a licensee disclose all remuneration received or anticipated to be received from anyone other than the licensee’s client, which is paid as a result of providing the real estate services to or on behalf of a client. Such disclosure must be in writing and be separate from a service agreement or any other agreement under which real estate services are provided.
Licensees engaged in strata management are required to disclose to the strata corporation any remuneration that the licensee receives or anticipates receiving, which is paid by someone other than the strata corporation and which is paid as a result of providing strata management services to or on behalf of that strata corporation. Section 5-11 of the Council Rules provides that if a licensee receives or anticipates receiving, directly or indirectly, remuneration as a result of recommending persons to the strata corporation who provide real estate-related products or services or recommending the strata corporation to such persons, the licensee must make written disclosure of the remuneration to the strata corporation.
Remuneration is defined in the Real Estate Services Act to be any form of remuneration, including any commission, fee, gain, or reward, whether the remuneration is received or is to be received directly or indirectly.
Licensees who recommend particular suppliers, and service and trades people to a strata corporation, and who receive any form of benefit, must disclose the benefit to the strata corporation. The benefit may take the form of a referral fee, or it may be loyalty points, air miles, or it may even be a discount on work done for the licensee personally. In each case, the licensee must promptly disclose in writing to the strata corporation and the licensee’s related brokerage the source of the remuneration, the amount of the remuneration or, if the amount is unknown, the likely amount of the remuneration or the method of calculation of the remuneration, and all other relevant facts relating to the remuneration. All such remuneration must flow through the brokerage.
The brokerage is also a licensee; therefore, where the brokerage is receiving the remuneration and not an individual within the brokerage, the managing broker must ensure that the brokerage has provided sufficient disclosure to its clients to meet the requirements of sections 5-11 and/or 5-12 of the Council Rules.
The Council has developed disclosure forms for strata management services that are available on the Council’s website at www.recbc.ca. Licensees may use these disclosure forms or any form of the licensees choosing so long as it satisfies the disclosure requirements outlined above.
Benefits in Relation to Strata Management Services
Section 5-12 of the Council Rules requires that, if a licensee, who provides strata management services, receives or anticipates receiving a benefit as a result of expenditures made by or on behalf of the strata corporation to whom the services are provided, the nature and extent of the benefit must be disclosed in writing to both the strata corporation and the licensee’s brokerage before the benefit is accepted. A brokerage is a licensee and is subject to the same disclosure requirements as individual licensees. Disclosure is also required if an associate of the licensee is to receive the benefit.
A licensee may obtain a benefit by retaining companies in which the licensee or an associate of the licensee has an interest to provide services to or carry out work for the strata corporation. If, for example, the licensee retained a company owned by their spouse to provide landscaping services, section 5-12 of the Council Rules would apply and require that the benefit be disclosed to the strata corporation. In such circumstances, an associate of the licensee is obtaining a benefit as a result of an expenditure made on behalf of the strata corporation.
Section 5-7 of the Council Rules defines the meaning of ‘‘associate’’ for both individual licensees and brokerages. Strata managers should pay particular attention to the definition in order to ensure that the required disclosures are made.
Licensees must also ensure that, if they intend to direct business to any service provider on the understanding that the licensee will receive a benefit for doing so, this is first disclosed to and agreed to by the strata corporation on whose behalf the services will be provided.
Since the August 2012 Report from Council newsletter, the following actions have been taken as a result of disciplinary hearings and Consent Orders conducted by the Council.
- Nirlaip (Paul) Singh Bal
- Roslyn Anita Millard
- Behzad (Burt) Behzadi
- Ahmet (Matt) Murat Kadioglu
- Allan (Al) Wayne Miller
- Brendan Tait Whitney
- Marjorie Ann Ashdown
- Koyne Dean Loiselle, Vantage West Realty Inc.
- Patrick Shiu-Ming Leung
- Brian Edward Rogers
- Charles (Chuck) Edward Gardiner
- Alan John Nixon, DominionGrand Realty Corp.
- Nadine Mary Westgate