Investigation of New Coast Realty Concluded

Published on 30 August, 2018

Investigation of New Coast Realty Concluded

Vancouver, August 30, 2018- The Real Estate Council of BC (RECBC) has concluded its investigation into alleged misconduct by the owner of Vancouver-area real estate brokerage New Coast Realty.

A Complaints Committee of the Council has determined that there is insufficient evidence to warrant disciplinary action against New Coast Realty in connection to allegations that training provided by the owner and practices at the brokerage put consumers at risk.

RECBC retained Len Doust, Q.C., a pre-eminent lawyer in BC with over 50 years of practice in criminal and administrative law, to oversee the investigation at New Coast Realty and advise RECBC whether there was evidence to support charges of professional misconduct against the brokerage.

While no disciplinary action will be taken against New Coast Realty in connection with training practices at the brokerage, since 2016, RECBC has issued 10 fines and five suspensions against individuals licensed, or formerly licensed, at the brokerage. Further disciplinary actions may be expected against other individual licensees.

RECBC remains committed to conducting fair, timely and thorough investigations. Under the provisions of the Real Estate Service Act, all RECBC investigations must be conducted in strict confidence.

In order to maintain public trust in the integrity and impartiality of RECBC’s investigations, the following backgrounder includes additional information about the investigation, the conditions on the brokerage and RECBC’s disciplinary process.


Background of the Investigation

In April 2016, RECBC launched an investigation of New Coast Realty, after media accounts were published alleging that training practices at the brokerage by its owner, who did not hold a real estate licence, could be putting real estate consumers at risk. Many of these allegations were based on a tape recording made at a training session that was provided to a newspaper reporter by an unidentified person.

In order to demonstrate that RECBC conducted a thorough and impartial investigation, Len Doust, Q.C. was retained to oversee the investigation and submit a final report.

In the course of the investigation, RECBC investigators:

  • attended at the brokerage and reviewed a large number of files;
  • reviewed in detail transaction records and other documentary evidence obtained at the brokerage;
  • investigated the conduct of a number of current and former New Coast Realty licensees;
  • conducted interviews of various licensees;
  • reviewed and analyzed translations and interpretations of the tape recording, including the explanations provided by the brokerage for the comments in the tape;
  • sought to identify the individual who had recorded the training session;
  • conducted quarterly audits of the brokerage to confirm its compliance with the restrictions and conditions placed upon its licence; and
  • reviewed and analyzed monthly reports submitted by the brokerage to RECBC for inspection as part of the conditions. These reports included: details of any in-house transactions, transactions involving licensees personally, activities of unlicensed assistants, trust accounts, any complaints received by the brokerage, trade records relating to assignments and commission bonuses, and all offers received for properties.

As a result of information gathered during its investigation of New Coast Realty, RECBC initiated a number of investigations into the conduct of individual licensees.

Since 2016, 10 individual licensees at New Coast Realty have been disciplined by Discipline Committees of the Council.

The brokerage was also reprimanded and ordered to pay a discipline penalty of $7,500.00 to RECBC in connection to an earlier, pre-2016 audit.

Further information on matters where disciplinary action was taken against New Coast Realty licensees can be found by searching the RECBC website under “Disciplinary Decisions”.

Due to confidentiality provisions in the Real Estate Services Act, RECBC cannot discuss investigations that did not or have not yet lead to disciplinary action.

Licence Conditions Imposed to Ensure Public Protection

To protect members of the public, in 2016 RECBC imposed sweeping conditions on the brokerage licence of New Coast Realty pending the outcome of the investigation. The conditions, which gave RECBC unprecedented oversight of the brokerage, its management and the activities of its licensees, included:

  • appointment of a managing broker approved in advance by RECBC;
  • training sessions to be conducted by only the managing broker;
  • licensee supervision to be conducted directly by only the managing broker;
  • managing broker must approve all listing information in advance of it being posted on MLS;
  • regular reports to be submitted by the managing broker to RECBC on transactions, trust accounts, transactions involving licensees personally, activities of unlicensed assistants, and any complaints received by the brokerage;
  • approval of account signing authorities by RECBC;
  • provision to RECBC of trade records relating to assignments and commission bonuses;
  • retention of copies of all offers received for a property for inspection by RECBC; and
  • regular audits of the brokerage to be conducted by RECBC, at the brokerage’s expense.

Regulatory Enhancements to Protect the Public

Since April 2016, a number of changes have been made to RECBC’s investigative and disciplinary processes, along with legislative and rule changes that provide for enhanced consumer protection. These include:

  • amendments to the Real Estate Services Act in August 2016 to prohibit unlicensed brokerage owners from supervising or training licensees (section 7.1 of RESA);
  • increased use by RECBC of licence conditions and restrictions during investigations to ensure consumer protection;
  • addition of new staff resources in RECBC’s Compliance Department to support process streamlining and timeliness of investigations;
  • introduction of an Anonymous Tipline to reduce barriers to reporting misconduct for real estate licensees and consumers; and
  • publication of Sanctions Guidelines to increase transparency and support members of the public and other stakeholders to understand the basis for penalties and remedial orders and why some may be chosen over others in a particular case.

RECBC’s Investigation and Disciplinary Process

The Real Estate Council of BC is committed to ensuring that real estate professionals practice competently and act in the best interests of their clients at all times.

One important way in which we accomplish this goal is by conducting unbiased and comprehensive investigations of individuals and brokerages when concerns are raised about practices that appear to be inconsistent with the expected professional standards, and which may put the public at risk.

Whenever we receive information — whether it is through a complaint, an anonymous tip, a media story, or our own audits and brokerage inspection program — that suggests a real estate licensee has engaged in practices that contravene their legislated requirements and has put the public at risk, we carefully review the information.

Where an investigation is warranted, RECBC Compliance Officers will seek more information and evidence from the real estate licensee, the managing broker, affected consumers, and others in order to determine what occurred and assess whether disciplinary action should be undertaken.

Whenever a licensed real estate professional is found to have committed professional misconduct, RECBC has the power to:

  • impose fines;
  • require remedial education or training;
  • restrict the person’s licence;
  • issue suspensions; and
  • issue licence cancellations.

RECBC can also fine, suspend or cancel the licence of a brokerage when a brokerage owner or director is found to have committed misconduct.

About the Real Estate Council of BC

The Real Estate Council of BC (RECBC) is a consumer protection agency established by the provincial government to administer the Real Estate Services Act. Its role is to license and regulate the conduct of real estate licensees in British Columbia.

RECBC enforces entry qualifications, investigates complaints against licensees and imposes disciplinary sanctions under the Act.

Consumers who have concerns about the conduct of a real estate licensee can file a complaint with RECBC, contact RECBC’s Anonymous Tipline, or call to discuss the matter with a Professional Standards Advisor.