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Professional Standards Manual

Rental Property Management Services

1. Overview

(b) Exemptions from Licensing

(i) Exemption for employees of a property’s owner (Section 2.1 of the Real Estate Services Regulation)

(1) An individual is exempt from the requirement to be licensed under Part 2 of the Act in respect of real estate services if all the following apply:

(a) the real estate services are provided to or on behalf of a principal in relation to those services;

(b) the individual is the employee of the principal referred to in paragraph (a);

(c) the individual is not providing real estate services to or on behalf of any person other than the principal referred to in paragraph (a).

NOTE: ‘‘principal’’, in relation to real estate services, means, as applicable, (a) in the case of trading services, a party to a trade in real estate; (b) in the case of rental property management services, other than trading services in relation to the rental of the real estate, the owner of the rental real estate to or on behalf of whom the services are provided; or (c) in the case of strata management services, the strata corporation to whom or on behalf of whom the services are provided (Section 1 of RESA).

(ii) Exemption for caretakers providing services to different owners (Section 2.13 of the Real Estate Services Regulation)

(1) This section applies to an individual who

(a) is employed as a caretaker or manager by the owners of different residential real estate properties, and

(b) is employed by those owners to provide rental property management services in relation to those properties.

(2) Subject to subsection (3), the individual is exempt from the requirement to be licensed under Part 2 of the Act in respect of the rental property management services referred to in subsection (1) if all the following apply:

(a) the individual is an employee of each of the owners;

(b) the owners have agreed among themselves that the individual may provide the rental property management services;

(c) the individual is not providing rental property management services to or on behalf of any person other than the owners.

(3) On receipt of money collected in relation to any of the rental real estate properties, including all money collected as rent, security deposits or pet damage deposits, the exempt caretaker or manager must promptly deliver the money to the owner of the rental real estate property in relation to which it was paid.

(iii) Exemption for caretakers or managers employed by brokerages (Section 2.14 of the Real Estate Services Regulation)

[06/19/2012 The following section was amended to include the portion from "Keep in Mind" onwards]

 

(1) Subject to subsection (2), an individual who is employed as a caretaker or manager of rental real estate by a brokerage that is licensed to provide rental property management services is exempt from the requirement to be licensed under Part 2 of the Act in respect of any of the following activities in relation to those real estate services:

(a) if the caretaker or manager complies with subsection (2), collecting money in relation to the rental real estate, including money collected as rent, security deposits or pet damage deposits;

(b) showing the rental real estate to prospective tenants;

(c) receiving and presenting applications in respect of the rental of the rental real estate from prospective tenants;

(d) supervising employees or contractors hired or engaged by the brokerage;

(e) communicating between landlords and tenants respecting landlord and tenant matters.

(2) On receipt of money referred to in subsection (1)(a), the exempt caretaker or manager must promptly deliver the money to the brokerage.

(3) Subsection (1) does not apply to a caretaker or manager who negotiates or enters into contracts on behalf of the brokerage or the owner of the rental real estate.

Keep in mind:

Section 2.14(1) of the Real Estate Services Regulation exempts individuals from licensing who are employed as caretakers or managers of rental real estate by a brokerage that is licensed to provide rental property management services.  

Similarly section 2.18(1) of the Real Estate Services Regulation exempts individuals from licensing who are employed as caretakers or managers by a strata corporation or by a brokerage that provides strata management services to or on behalf of a strata corporation. 

There are several key components of these exemption regulations that brokerages employing unlicensed persons who act under it need to understand. First, the relationship between the brokerage and such a person must be one of employer/employee. The individual cannot act as an independent contractor providing services to or on behalf of the brokerage. Whether or not an individual will be considered to be an employee or an independent contractor for the purposes of the exemption depends on the unique circumstances in each case.  In making this determination the Council will consider similar criteria to those used to determine if a worker is an employee or an independent contractor under the Income Tax Act.  Briefly, some of the factors the Council may consider are:

  • The intention of the parties;
  • The level of control the payer has over the worker;
  • Whether the worker provides the tools and equipment;
  • Whether the worker can subcontract the work or hire assistants;
  • The degree of financial risk taken by the worker;
  • The degree of responsibility for investment and management held by the worker;
  • The worker’s opportunity for profit (can the worker increase their proceeds or decrease their expenses to increase profit?); and
  • Any other relevant factors such as written contracts or statutory deductions. 

Brokerages are expected to keep documentation evidencing an employer/employee relationship including any documents that take into consideration the above factors which may include employment contracts, job descriptions, or evidence of statutory deductions such as income tax, employment insurance premiums, Canada Pension Plan contributions etc. 

Brokerages may wish to seek independent legal and/or accounting advice to ensure that their worker will meet the requirement set out in the exemptions.  For further information brokerages should refer to the guide published by the Canada Revenue Agency found at www.cra-arc.gc.ca/E/pub/tg/rc4110/README.html and a guide to the BC Employment Standards Act found at www.labour.gov.bc.ca/esb/esaguide/.

Services provided under this exemption must be limited to those identified above. Advising the landlord on what constitutes appropriate or ‘‘market’’ rent, negotiating the terms of a lease and signing rental agreements are not permitted. Brokerages and their managing brokers are responsible for ensuring that the services offered by unlicensed caretakers/managers do not go beyond what is permitted in the Regulation and may be subject to discipline proceedings for failing to do so.

(iv) Exemption for BCHMC and related non-profit organizations (Section 2.15 of the Real Estate Services Regulation)

1. In this section:

‘‘British Columbia Housing Management Commission’’ means the British Columbia Housing Management Commission continued under the Ministry of Lands, Parks and Housing Act;

‘‘non-profit organization’’ means an organization constituted exclusively for charitable or benevolent purposes with no part of its income being payable to or other wise available for the personal benefit of any of its members or shareholders.

(2) An individual is exempt from the requirement to be licensed under Part 2 of the Act in respect of rental property management services if the individual is providing the services in relation to rental real estate that is

(a) administered by the British Columbia Housing Management Commission, and

(b) rented to tenants based on the tenant’s income.

(3) A non-profit organization is exempt from the requirement to be licensed under Part 2 of the Act in respect of rental property management services if the non-profit organization

(a) has entered into an agreement with the British Columbia Housing Management Commission, and

(b) is providing the rental property management services in relation to rental real estate referred to in subsection (2).

(v) Exemption in relation to assignment of rents (Section 2.16 of the Real Estate Services Regulation)

2.16. A savings institution, or a mortgage broker registered under the Mortgage Brokers Act, is exempt from the requirement to be licensed under Part 2 of the Act in respect of rental property management services if the savings institution or mortgage broker is acting on behalf of a person who has granted an assignment of rents to the savings institution or mortgage broker.

Licensee Exemptions (Section 2(2) of RESA)

(2) … subject to the Rules, this Act applies to every licensee who provides real estate services, even if the licensee

(a) provides real estate services on the licensee’s own behalf,

(b) provides real estate services to or on behalf of another but not for or in expectation of remuneration, or

(c) would other wise be exempted by this Act or the regulations from the requirement to be licensed in relation to the provision of those real estate services. (Section 2(2) of RESA)

Insofar as rental property management is concerned, this section of RESA means licensees can rely only on the two following exemptions which pertain to the licensee’s own or family property. Aside from these exemptions, a person licensed to provide only trading or strata management services must generally become licensed to provide rental property management services.

(vi) Exemption for licensees managing their own property (Section 9-1 of the Council Rules)

(1) This section applies to a managing broker, associate broker or representative who provides rental property management services on their own behalf in relation to their own real estate.

(2) The Act and these rules do not apply to the licensee in relation to the rental property management services so long as the licensee does all of the following:

(a) provides these services in their own name and not in the name of their related brokerage;

(b) does not, in any real estate advertising with respect to the rental real estate, indicate the name, address or telephone number of their related brokerage or of any place where the licensee is engaged in their capacity as licensee;

(c) discloses to each potential tenant of the rental real estate, promptly but in any event before the person enters into a tenancy agreement, that

(i) even though they are licensed under the Real Estate Services Act, they are not acting as a licensee in this case, and

(ii) the licensee is not regulated under the Real Estate Services Act in relation to the rental real estate;

(d) discloses in writing to the managing broker of the related brokerage that the licensee will be providing rental property management services on their own behalf in relation to their own real estate.

(vii) Exemption for licensees managing family property (Section 9-2 of the Council Rules)

(1) This section applies to a managing broker, associate broker or representative who provides rental property management services that

(a) are provided

(i) to or on behalf of their spouse, family partner, son, daughter, or parent, in relation to rental real estate owned by that other person,

(ii) to or on behalf of a partnership in relation to real estate owned by the partnership, if the only partners of the partnership are two or more of any of the following:

(A) the licensee;

(B) a spouse or family partner of the licensee;

(C) a son, daughter or parent of the licensee; or

(iii) to or on behalf of a corporation of which the only shareholders are one or more of the individuals referred to in subparagraph (ii), and

(b) are not provided for or in expectation of remuneration.

(2) The Act and these rules do not apply to the licensee in relation to the rental property management services so long as the licensee does all of the following:

(a) complies with the requirements of section 9-1(2)(a), (b) and (c) [management of rental real estate owned by licensee] of these rules;

(b) before providing the services, discloses in writing the matters referred to in section 9-1(2)(c) of these Rules to

(i) the spouse, family partner, son, daughter or parent to or on behalf of whom the licensee is providing the services, or

(ii) in the case of services provided to or on behalf of a partnership or corporation, each spouse, family partner, son, daughter or parent who is a partner or shareholder;

(c) provides to the managing broker of the related brokerage, as applicable,

(i) in the case of services to which paragraph (b) applies, a copy of the written disclosure under that paragraph, or

(ii) in the case of services provided to or on behalf of a corporation of which the only share- holder is the licensee, written disclosure that the licensee will be providing rental property management services to or on behalf of that corporation.