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Professional Standards Manual

V. Rental Property Management Services

Overview

The Real Estate Services Act (RESA) requires that all individuals or companies who provide rental property management services, unless specifically exempted, obtain licensing.

‘‘rental property management services’’ means any of the following services provided to or on behalf of an owner of rental real estate:

(a) trading services in relation to the rental of the real estate;

(b) collecting rents or security deposits for the use of the real estate;

(c) managing the real estate on behalf of the owner by

(i) making payments to third parties,

(ii) negotiating or entering into contracts,

(iii) supervising employees or contractors hired or engaged by the owner, or

(iv) managing landlord and tenant matters

but does not include an activity excluded by regulation.

(a) Rental Property Management Licence Required

Any person who provides rental management services, subject to the exemptions noted below, is required by section 3 of RESA to be licensed.

Under the former Real Estate Act, licensees held restricted or unrestricted licences. An unrestricted licence permitted the licensee to carry out any activity for which a licence was required. Even if a licence was restricted to sales, the licensee was permitted to carry out a limited amount of rental property management.

Under RESA, it is necessary to be licensed under each specific category in order to carry out the activities related to that category.

Section 2-1 of the Rules provides that the categories of licence are: trading services, rental property management services, strata management services, or any combination of these activities.

As a result of these provisions, a licensee must be licensed in each category for which the licensee intends to provide services. Additionally, in order to provide a particular service, the brokerage to which the licensee is engaged must be able to provide such services. A brokerage may only provide services that are permitted by the licence of the managing broker.

Before providing rental property management services, a licensee must, therefore, be licensed to provide such services. All such services must be provided through the brokerage to which the licensee is engaged. Thus, the brokerage must also be licensed and willing to provide rental property management services.

(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.

(c) Common Licensing Scenarios - Rental

Scenario #1

In managing an apartment complex for its owner, Acme Property Management Corporation (Acme) employs a ‘‘resident caretaker’’ or ‘‘on-site manager’’ who shows apartments to prospective tenants, collects security deposits and rents, arranges needed repairs, and schedules regular maintenance on the property. This resident manager also negotiates and executes leases.

What real estate licences are required?

Since Acme is acting on behalf of a third party for remuneration, it must hold a real estate brokerage licence. This licensing of the corporation does not automatically entitle any of the corporation’s officers, directors, shareholders, or employees to engage in leasing activities.

In addition, Acme’s property management services must be supervised by a managing broker who is licensed to provide rental property management services and all other persons employed by Acme as leasing or rental agents must be licensed as representatives (or associate brokers) to provide rental property management services under RESA.

If, in this scenario, the resident manager was instructed to immediately remit any security deposits and rents to the brokerage for deposit into its trust accounts, and if he or she were not involved in negotiating and executing leases, no licence would be required under the exemption for resident caretakers cited above (Section 2.14 of the Real Estate Services Regulation).

However, since the resident manager does negotiate and execute leases, a representative’s (or associate broker’s) licence is necessary. Failure to have him/her licensed could result in disciplinary action being taken against the brokerage and Acme’s managing broker.

Scenario #2

Joan, who is licensed as a representative to provide trading services, promises to look after a rental unit she recently sold. She hopes that when the owner is ready to sell, he will give her the listing and in gratitude will refer her to his friends.

Is Joan adequately licensed?

Joan is providing rental property management services to another person in the hope of future remuneration, even though her current licence does not allow her to do so. If her conduct were reported to the Council Joan could face disciplinary action. She must stop her unlicensed activity until properly licensed for rental property management with an appropriately licensed brokerage. Once properly licensed, a rental property management service agreement between her brokerage and client would be necessary, and if rent is to be collected by Joan, the trust accounting requirements of the Real Estate Services Act apply.

Scenario #3

John Smith, an unlicensed individual, owns a number of office buildings in Victoria. John wants to manage these buildings using his employees.

What real estate licences are required?

Neither John nor any of his employees are required to be licensed. A real estate licence is not required of an owner — whether a sole proprietorship, a corporation, or an association — when personally selling, leasing, or managing his or her own property; nor is a licence required by employees of the owner when renting, leasing, or managing property owned by their employer, provided that they do not provide real estate services for any other person (Section 2.1 of the Real Estate Services Regulation).

Scenario #4

Joe Pipe, a plumber working for a mechanical services company, has a 40% interest in a real estate investment company called Three Brothers Investment Co. Joe’s two brothers each own a 30% interest in the company, which has recently purchased an apartment complex. The brothers have decided that Joe should perform the rental property management services required for this investment.

Is a licence required?

No. By having a substantial interest in the real estate being managed, Joe is acting as a principal (owner) and, as such, is not subject to the requirements of the Real Estate Services Act.

Scenario #5

The ABC Group, a limited partnership, owns several shopping malls. Rather than employ an independent property management firm, ABC purchases a minority interest (10%) in Hill View Management, a separate corporation that will manage its properties, as well as those of other clients.

What real estate licences are required?

Since the affiliated management corporation, Hill View Management, is a separate legal entity acting as a leasing agent for ABC (see the next scenario) and other property owners, it must obtain licensing.

Hill View Management must hold a real estate brokerage licence, its rental property management services must be overseen by a managing broker licensed to provide rental property management services, and anyone providing those services on behalf of its clients must be licensed as representatives (or associate brokers) under the Real Estate Services Act.

Scenario #6

Canada First Realty Ltd., which owns numerous commercial and residential rental properties, forms a separate, wholly-owned subsidiary called BZ Property Management Inc., for the sole purpose of managing its real estate.

What real estate licences are required?

Assuming BZ Property Management Inc. is a legal entity separate from the owner of the property having no substantial interest in the property, either directly (as part owner) or indirectly (through share ownership in Canada First Realty), it is acting on behalf of another person in providing real estate services. Therefore, BZ Property Management Inc. must meet all the requirements of the Real Estate Services Act. It must be licensed as a brokerage, employ a licensed managing broker, and have only licensed representatives engaged in rental property management.

If Canada First Realty Ltd. wishes to avoid a situation in which licensing is mandatory, it should have its own employees manage its real estate assets (Section 2.1(1) of the Real Estate Services Regulation).

Scenario #7

Ray, the managing broker at XYZ Property Management Ltd., a brokerage licensed to provide rental property management services, is asked to submit a proposal for the management of Berkshire Mews, a privately held cooperative. Ray is not being asked to manage individual rental units, but to provide management to the complex on behalf of the cooperative itself, in a manner akin to strata management.

Can XYZ manage the Berkshire Mews?

Yes. However, Ray must take care to discover by what title the Berkshire Mews Cooperative corporation holds its underlying corporate interest in the Mews.

If the cooperative has a headlease and grants subleases under that headlease to its shareholders, then XYZ will be providing rental property management services. The property, in this instance, is ‘‘rental real estate’’ because the cooperative interests are considered real estate and are intended to be rented or leased. NOTE: A ‘‘cooperative interest’’ is considered ‘real estate’ and means an interest that includes both: (a) a right (i) of ownership, directly or indirectly, of one or more shares in the cooperative association, or (ii) to be a partner or member, directly or indirectly, in the cooperative association, and (b) as a result of the right described in paragraph (a), a right to use or occupy a part of the land in which a cooperative association has an interest (Section 1 of the Real Estate Development Marketing Act).

Since XYZ is licensed to provide rental property management, Ray can submit a management proposal.

If the cooperative’s interest in the Berkshire Mews is freehold, it may offer direct leases to its members, rather than subleases under a headlease. In this case, once again the property is ‘‘rental real estate’’ because it is real estate that is leased.

Since XYZ is licensed to provide rental property management, Ray can submit a management proposal.

If the cooperative’s corporate interest in the Berkshire Mews is freehold and the occupancy rights granted to its members arise under a shareholder’s agreement that does not involve a lease, then the management services being proposed will not be considered real estate services at all. Although a cooperative interest is considered real estate, where no lease is involved, the services rendered in managing a cooperative do not fall under the definition of ‘‘real estate services’’ contained in RESA, which includes only:

(a) rental property management services,

(b) strata management services, or

(c) trading services (Section 1 of RESA).

In this case, Ray, or anyone else for that matter, can offer to manage Berkshire Mews. If Ray decides to do so, he must make sure that any money held on behalf of the Mews is not placed in accounts set up as a requirement of RESA, but is held apart from all real estate trust funds.

Ray would also be wise to disclose to the cooperative’s board that:

(i) even though licensed under the Real Estate Services Act, XYZ is not acting as a licensee in this case, and consequently;

(ii) XYZ is not regulated under the Real Estate Services Act in relation to the management of Berkshire Mews; and

(iii) any money held on behalf of the Berkshire Mews will not be protected by the Real Estate Compensation Fund Corporation nor will Ray be indemnified by the Real Estate Errors and Omissions Insurance Corporation.

Scenario #8

Fred provides property management services for several owners of vacation rental properties located in the Okanagan Valley. Fred provides a central booking service for people who wish to stay in self-contained units when they vacation during the summer months. He takes initial deposits and collects the balance of the fees on the first day the property is to be occupied. Fred also arranges for housekeeping services while the units are occupied, takes care of minor repairs, and in the case of the detached homes in his rental portfolio, he also arranges for the yard maintenance. He sends the owners the remaining funds each month, along with accounting statements.

Some of these properties are made available for fixed term occupation during the off-season. Fred finds tenants and negotiates fixed term leases for these properties. He collects and holds the security and pet damage deposits for these properties, collects the rents, pays the expenses on behalf of the owners, and sends the owners the remaining funds each month, along with accounting statements.

In return for these services, Fred receives a percentage of the rental income from which he must pay for all housekeeping services during the vacation season. Regular maintenance is invoiced to the owners separately. During the off-season, Fred receives a percentage of the fixed term lease payments.

Does Fred need to be licensed under RESA?

The management of the short term vacation rentals does not require licensing under RESA; however, activities related to the provision of travel services to the public, when those travel services are supplied by another person, require licensing under the Business Practices and Consumer Protection Act. Because travel services include accommodation that is for the use or benefit of a traveler, tourist, or sightseer, Fred appears to be providing travel services in relation to his vacation rental portfolio. Fred should contact Consumer Protection B.C. (www.consumerprotectionbc.ca), the organization responsible for administration of the Business Practices and Consumer Protection Act, to determine whether he is required to be licensed under that legislation.

Management of the fixed term lease portfolio during the off-season does require licensing under RESA. The services Fred provides to the owners of these properties constitute rental property management services provided on behalf of the owner/landlord. These rental property management services, like all real estate services, must be provided in the name of and on behalf of a licensed brokerage. All monies received in relation to these services must be treated as trust funds under RESA.

Another important component of RESA is that the money Fred receives and holds in relation to the short term vacation rentals must not be commingled with the money he receives in relation to the fixed term leases. This is true even where the money is received in relation to the same real estate, e.g. short term vacation rental during the summer and fixed term lease during the off-season. Separate accounts must be established for funds received in relation to these two different types of service.

As a real estate licensee, Fred should ensure his clients understand which of his services are regulated under RESA, which are subject to the Business Practices and Consumer Protection Act, and that any funds he collects on behalf of the clients will be held by his brokerage in segregated accounts.

Scenario #9

Mary has leased a home and now intends to sub-lease that home to John. Does Mary have to be licensed under RESA to do so?

No. Section 1 of RESA defines the term “owner” in relation to rental real estate to include “a person entitled to possession of the real estate who exercises a right to sub-rent or sub-lease the real estate to another.” Section 3 of RESA states that:

“A person must not provide real estate services to or on behalf of another, for or in expectation of remuneration, unless the person is

  1. licensed … to provide those real estate services, or
  2. exempted from the requirement to be licensed … in relation to the provision of those real estate services”

Mary is an “owner” as defined in section 1 and may, therefore, act on her own behalf in all aspects of this sub-lease without having to be licensed.

(d) Short-Term Rental Licensing Requirement

In July 2004, Consumer Protection BC commenced operations in British Columbia. Consumer Protection BC operates under contract to the provincial government and, amongst other groups, it is responsible for licensing travel agents and property inspectors. The definition of ‘‘travel agent’’ includes someone who sells or otherwise provides travel services, including accommodation, to a traveller, tourist, or sightseer. In that regard, licensees should be aware that what the industry has come to know as ‘‘ short-term vacation rentals’’ falls within the definition of ‘‘travel services’’. Therefore, a person who is providing travel services by way of arranging short-term vacation rentals, or similar accommodation, is likely required to be licensed under the Business Practices and Consumer Protection Act. Any licensee who engages in the management of short-term vacation rentals should contact Consumer Protection BC as they likely need to be licensed under the Business Practices and Consumer Protection Act. The Consumer Protection BC website is located at www.consumerprotectionbc.ca.

(e) Application of the Real Estate Services Act

Section 2 of RESA stipulates that, once an individual is licensed under RESA, RESA, the Real Estate Services Regulation, and the Rules apply to all real estate services that the licensee may provide, even if the real estate services are provided on the licensee’s own behalf, are provided for free, or would other wise be exempt.

Real estate services include strata management services, rental property management services, and trading services. Section 2 of RESA means that an individual licensed to provide rental property management services may not provide any real estate services, except as discussed below, unless the services are provided in compliance with all the provisions of RESA, the Real Estate Services Regulation, and the Rules.

The Rules contain an exemption which permits a licensee to manage rental property that the licensee or the licensee’s spouse, family partner, son, daughter, or parent owns, or that is owned by certain partnerships, or corporations without the need to comply with RESA as long as certain conditions are met.

Section 9-1 of the Rules permits a licensee to manage rental real estate that the licensee owns. Section 9-2 of the Rules permits a licensee to manage rental real estate owned by the licensee’s spouse, family partner, son, daughter, or parent without being required to comply with the provisions of RESA.

Section 9-2 of the Rules also permits a licensee to manage rental real estate owned by a partnership if the partners are any combination of the licensee and the licensee’s spouse, family partner, son, daughter, or parent. Additionally, the licensee is permitted to manage rental real estate owned by a corporation if the shareholders are limited to the licensee or the licensee’s spouse, family partner, son, daughter, or parent.

To comply with the requirements of sections 9-1 and 9-2 of the Rules, the licensee must:

  • provide the services in the licensee’s own name and not in the name of their related brokerage; not indicate the name, address, or telephone number of their related brokerage in any advertising in respect of the rental property;
  • disclose to each potential tenant before the prospective tenant enters into a tenancy agreement that the licensee is licensed, but is not acting under and is not regulated under RESA in relation to this transaction;
  • disclose 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 or on behalf of a corporation in which they are the sole shareholder; and
  • provide the rental management to the family member, partnership, or corporation for free and provide to the family member, partnership, or corporation, as applicable, in writing, that the licensee is not acting as a licensee and is not regulated under RESA in relation to this transaction. A copy of this written disclosure must be provided to the managing broker of the related brokerage.

In all other situations, a licensee must either satisfy an exemption or comply with RESA, the Regulations, and the Rules if the licensee provides real estate services.

In the following section, entitled ‘‘Practice Standards’’, the most significant requirements that are imposed by licensing on rental property managers are set out. However, licensees engaged in rental property management must be aware that, unless a specific exemption exists for rental property managers, all licensing requirements will apply.

For example, a licensee engaged in rental property management must comply with all business practice requirements as set out in the Rules, such as the need to display licences, the limitations that are placed on home offices, the requirements relating to the name that a licensee may use, and the provisions relating to advertising.

The Special Compensation Fund applies to trust funds held by a licensee engaged in rental property management. As a result, all licensees engaged in rental property management must contribute to the Fund. Additionally, licensees engaged in rental property management participate in the errors and omissions insurance program administered by the Real Estate Errors and Omissions Insurance Corporation.

All licensees, including those licensed to provide rental property management services, are subject to the disciplinary authority of the Council. The Council is authorized under RESA to issue administrative penalties, in the case of a breach of specified Rules, such as the rules relating to the display of licences, the annual reporting requirements, and rules relating to the retention of records. Additionally, a disciplinary committee of the Council, if it finds that a licensee has committed professional misconduct, can make various disciplinary orders including reprimanding or suspending licensees, or imposing a disciplinary penalty of not more than $250,000 in the case of a representative, associate broker, or managing broker and not more than $500,000 in the case of a brokerage or former brokerage.

RESA provides that a licensee commits professional misconduct if the licensee:

  • contravenes RESA, the Regulations, or Rules;
  • breaches a restriction or condition of their licence;
  • does anything that constitutes wrongful taking or deceptive dealing;
  • demonstrates incompetence in performing any activity for which a licence is required;
  • fails or refuses to cooperate with an investigation;
  • fails to comply with an order of the Council, a discipline committee, or the Superintendent; and
  • makes or allows to be made any false or misleading statement in a document that is required or authorized to be produced or submitted under RESA.

Licensees engaged in rental property management should be familiar with all of the requirements of RESA, the Real Estate Services Regulation, and the Rules in order to ensure that they do not inadvertently fail to comply or contravene what is required of them as a result of licensing.