No matter whether you’re a brand new licensee or a seasoned professional, as you’re providing real estate services to clients you may encounter issues that you’re not certain how to handle. Fortunately, there are resources at hand to help: the Council’s Professional Standards Manual is a comprehensive resource that covers information on everything from Agency Disclosure to Zoning Approvals, and the managing broker at your brokerage is there to turn to when you have questions.
In many cases, information or advice from these sources is all that’s needed. But sometimes a question is more complex, and that’s when many licensees pick up the phone, or tap out an email to the Council. On average, the Council receives nearly 1000 calls and emails on practice issues each month, from licensees and from members of the public. That’s a lot of questions.
In 2016, to enhance the assistance we give to licensees in understanding their legislated requirements and complying with the Real Estate Services Act, Regulation, Rules and Bylaws, the Council will begin piloting a new initiative: a Professional Standards Advisor. The Advisor will be a single point of contact for licensees looking for information and resources about practice-related issues. We’re pleased to announce the Council’s current Manager of Compliance, Maureen Coleman, will take on the role of Professional Standards Advisor during the year-long pilot project.
“Licensees in BC are held to a high standard of professionalism. The Real Estate Services Act and the Council Rules require it, and consumers have a right to expect it from the licensees they deal with,” said Council Chair Marylou Leslie. “That’s why we are excited to begin piloting the Professional Standards Advisor’s services. By focusing even more resources on informing and educating licensees, we hope to increase professionalism and decrease complaints, investigations, and discipline.”
The Professional Standards Advisor will act as a resource for licensees by directing them to the appropriate areas of the legislation, to the Professional Standards Manual, the Brokerage Standards Manual, or other Council information sources. The Advisor will also help members of the public to understand what they can expect from a real estate licensee, and when they may-or may not-have basis for a complaint regarding a licensee’s actions.
Your first resources for any practice-related questions should always be the Professional Standards Manual and your managing broker. But in cases where you need to know more about the applicable legislation or standards of practice, beginning in January 2016, you can contact the Professional Standards Advisor at [email protected].
The close of one year and the beginning of a new year has always been a time for fresh starts and new approaches. And at the Council there are a number of changes that come into effect in January that we want all licensees to be aware of.
First, if your licence expiry is January 1, 2016 or later, you must now include, as part of your renewal application, proof that you have completed a Legal Update course within the past two years. That proof can be a certificate of completion, or a copy of your education transcript from the course provider. It must include your name, the course name, and the date you completed the course. To find out more about this requirement, visit the Relicensing Education Program page on the Council’s website, at www.recbc.ca/licensee/rep.html.
Secondly, the Council has approved changes to its General Bylaws that will allow us to conduct the upcoming election for new members electronically. This means that rather than mailing in your vote as in previous years, you will be able to vote online for a licensee running for election in your district. Electronic voting is simple, safe, and secure-and we hope that these changes will encourage even more licensees to vote in 2016. Voting to elect a member to Council is your chance to guide the future of the real estate profession in BC, and to have a say in how your industry is governed.
Nomination forms and further information about the election will be included in the February 2016 issue of the Report from Council. You can view the updated General Bylaws here: www.recbc.ca/licensee/bylaws.html#part2
Finally, a reminder that fees are also changing in 2016: the total fee for new licences is $1360, while renewals are $1330. The complete list of fees is available online at www.recbc.ca/licensing/fees.html.
These changes, along with the ongoing work of the Council, are part of our commitment to protect the public interest by ensuring that the real estate industry in BC is carefully regulated and responsibly governed. Keep reading to learn more about current and emerging issues in the real estate sector.
And on behalf of all the Council members and staff, please accept our best wishes for a wonderful holiday season and a very Happy New Year!
Marylou Leslie, Chair
As a licensee, you’re familiar with the concept of material latent defects as they relate to the buying and selling of real estate. But material latent defects affect property renters too-and licensees who assist in the renting or leasing of property must disclose these defects to prospective tenants.
By making sure that prospective tenants are fully informed about the property, you’ll fulfill your legislated requirements, and provide professional service. And to help you explain to your landlord-clients why, when and what you must disclose to prospective tenants, we’ve put together the following FAQ.
A: A material latent defect is not visible upon ordinary inspection, but significantly affects the property’s use or value. One example is an illegal suite. Another is a property that has been renovated without appropriate permits. In both these cases, and in the case of any defect that falls within the definition in the Council Rules (see sidebar), as a licensee you must disclose these facts to a tenant, in writing, before any lease or tenancy agreement has been entered into.
A: Your landlord-clients have a legal obligation to disclose all known material latent defects to potential tenants, just as they would have to disclose these defects to a potential buyer if they were selling the property. As their agent, you must also disclose all known material latent defects-unless your clients have already made a full written disclosure to the prospective tenants.
The Real Estate Services Act definition of rental property management services includes, “trading services in relation to the rental of the real estate.” A trade in real estate means “a transaction for the purchase or sale of real estate, for the leasing of real estate or for any other form of acquisition or disposition of real estate.”
This means that the obligations of disclosure that apply to trading services licensees apply equally to rental property management licensees when they are providing trading services in relation to rental property management services. And that includes the obligation to disclose latent defects, in writing, to a prospective buyer or tenant.
A: Licensees must disclose any material latent defects to prospective tenants, in writing, before any agreement, such as a lease or tenancy agreement, is entered into. The only exception to this obligation is if the buyer or tenant has already received written disclosure of the material latent defect from the person disposing of the real estate, such as a seller or a landlord.
A: Before entering into a service contract with a landlord-client, make sure they are aware of your obligation to disclose material latent defects to prospective tenants. If a client instructs you not to disclose a defect, you must refuse to provide further trading services, e.g. tenant placement or leasing services. If the landlord is uncertain about whether a specific defect must be disclosed, advise them to seek independent legal advice.
Disclosure of Material Latent Defects, Professional Standards Manual
”Disclosure of Material Latent Defects-What’s Required, and When,” Report from Council, June 2014
“Disclosure of Material Latent Defects,” Report from Council, March 2006
“RESA and Rental Property Management,” Report from Council, April 2008
… a material defect that cannot be discerned through a reasonable inspection of the property, including any of the following:
- a defect that renders the real estate
- dangerous or potentially dangerous to the occupants,
- unfit for habitation, or
- unfit for the purpose for which a party is acquiring it, if
- the party has made this purpose known to the licensee, or
- the licensee has otherwise become aware of this purpose;
- a defect that would involve great expense to remedy;
- a circumstance that affects the real estate in respect of which a local government or other local authority has given a notice to the client or the licensee, indicating that the circumstance must or should be remedied;
- a lack of appropriate municipal building and other permits respecting the real estate.
Source: Section 5-13 of the Council Rules
- a defect that renders the real estate
Changes to the General Bylaws that will enable the Council to hold its elections in 2016 electronically were approved by the Council at its October, 2015 meeting. These changes will simplify voting for licensees, while ensuring that the election process and tabulation of votes continues to be secure and transparent.
Look for more information about the nomination and election process in the February, 2016 issue of the Report from Council newsletter. The amended bylaws are available online at www.recbc.ca/licensee/bylaws.html#part2.
The Financial Institutions Commission (FICOM) and the Superintendent of Real Estate are pleased to announce an improved FICOM website at www.fic.gov.bc.ca — will open in a new tab. Now members of the public, industry members, and other stakeholders have better access to information about the Superintendent’s regulatory programs.
For real estate matters, site visitors can now find information organized under Real Estate Services, Real Estate Development Marketing and Strata Property. Information under each category provides a fuller and clearer explanation of those regulatory programs along with links to related materials.
Fees for the Land Title and Survey Authority of British Columbia’s (LTSA) land title and survey services have changed as of November 1, 2015. The new regulated fee structure, which reflects Provincial legislative action and a determination by an independent Fee Commissioner, reduces the number of LTSA fee categories and better aligns the level of effort with the cost of the service.
The result is a simplified customer fee listing that reflects the current services provided by the LTSA.
To find out more about the fee changes, review the following links:
- The new fee listing: http://ltsa.ca/fees — will open in a new tab
- An FAQ on the fee changes: http://ltsa.ca/fees/changes-fee-listing — will open in a new tab
- The Fee Commissioner’s independent report: www.ltsa.ca/docs/fee-commissioners-report-may-2015.pdf — will open in a new tab.
If you will be renewing your licence in 2016, keep in mind that when applying for renewal of a licence expiring after December 31, 2015, you’ll need to submit proof that you have completed an appropriate Legal Update REP course in the last two years. Attach a certificate of completion, or a copy of your education transcript from the course provider (for example, a real estate board or association) with your renewal application. Make sure it includes your name, course name, and the date the course was completed.
To renew your licence, you must submit your completed renewal application to the Council at least 30 days prior to the licence expiry date.
Simple. Convenient. Fast. Secure. These are some of the buzzwords Interac uses to promote its email money transfer service, Interac E-Transfer®. And more and more, people are starting to agree-email money transfers are becoming an increasingly popular way to send money directly from one bank account to another.
But for licensees and managing brokers who may be considering using email money transfers to collect rents, strata fees, or deposits on behalf of clients, there is one more word that you need to pay attention to.
Yes, non-compliant. Using email money transfers can place a brokerage in contravention of the Real Estate Services Act requirement that brokerages “promptly pay into a brokerage trust account all money held or received from, for or on behalf of a principal in relation to real estate services.”
If email money transfers are so quick, how does a brokerage end up offside on the requirement to ensure money is deposited promptly? Good question. Here’s the source of the problem:
To send an email money transfer, all the sender needs is access to online or mobile banking through a participating financial institution. A few quick taps and money can be sent to anyone with an email address or mobile phone number and a bank account in Canada.
However, for recipients, there are daily, weekly, and monthly limits on the amount of money that can be deposited into their account through e-transfers. While the limits may vary depending on the financial institution holding the account, deposits are often capped at $10,000 a day, $25,000 to $70,000 per week, and $50,000 to $300,000 per month.
Let’s examine how these limits can affect a brokerage attempting to collect rents through e-transfers. Very Best Property Management Ltd. (VBPM) manages a portfolio of 80 residential units, each renting for $1,200, and wants to collect all rents by way of Interac E-Transfers®. VBPM has excellent tenants who always pay on time. So on the first of the month, a total of $96,000 is transferred to VBPM’s trust account. Except it isn’t. Their financial institution blocks the transfers once the daily limit is reached.
Only 8 of the rents are deposited on the day received; only 8 more on each of days 2, 3, 4 and 5 of that week, for a total of only 40 of the 80 rents that were received by the brokerage. The remaining 40 rents can’t be deposited until the second week of the month, again spread out over five days. Not prompt by any stretch of the imagination! What is the solution for VBPM, and other brokerages that wish to use e-mail money transfers?
Before you begin using e-transfers, contact your financial institution to discuss their deposit limits. Unless you are able to negotiate a daily deposit limit that will allow you to receive 100% of rents, strata fees, or other deposits expected, e-transfers aren’t an acceptable method of payment collection for your brokerage.
And be aware: a sender can cancel an e-transfer at any time prior to the funds being accepted and deposited into the recipient’s account. Explain that to your client!
If you have questions, or would like to comment on this article, send us an email at [email protected].
- section 27(2), RESA [payment into trust account]
- section 3-3, Council Rules [Duties to clients]
Teams are a popular way for licensees to market and deliver services to clients. The issue this month’s You Asked Us question brings up is about understanding the relationship between team members and clients under Designated Agency. In 2013, the Council introduced new rules to accommodate the practice of Designated Agency for trading services licensees, and today licensees at most brokerages in BC provide real estate services to clients as Designated Agents. Under Designated Agency, the brokerage enters into a contractual relationship with the client and designates a licensee or team of licensees to provide real estate services as a sole agent to or on behalf of that client. So how exactly do teams need to handle their obligations to clients under Designated Agency? Read on to find out…
Q: I’m thinking about forming a team with several other licensees at my brokerage. It looks like we’ll be a big group-at least a dozen, and we’re wondering how we’ll handle contracts once we’re a team. Can we use the team name on contracts, or do we all have to be listed?
A: Congratulations on thinking ahead about some of the issues that team members need to be aware of. The full names of all team members must appear on every MLS® Listing Contract between team members and clients, as well as Exclusive Buyer’s Agency Contracts, Buyer Agency Acknowledgement forms, and Contracts of Purchase and Sale. You cannot use the team name on these documents, because that name exists only for advertising purposes.
All the team members’ names must appear on contracts because the team is deemed to be collectively the Designated Agent for the client. This means that while confidential client information may be shared between team members, strict client confidentiality must be maintained from other licensees at the brokerage.
Since your team will be a large one, you may find there is not enough space on the forms for everyone’s full names. If this is the case, you should indicate in the space provided (such as the Agency Disclosure Section of the Contract of Purchase and Sale) that the names of all the Designated Agents are included on an attached, appropriately numbered Schedule, as in the example above.
However, any team member can execute the documents. The signature of every team member is not required.
The British Columbia Real Estate Association has developed a helpful online FAQ with answers to a variety of Designated Agency queries, including a section that focuses specifically on issues affecting Teams and Personal Real Estate Corporations. Find it at web.bcrea.bc.ca/da/faq_realtors(r).htm.
The Council’s Professional Standards Manual includes a section on teams that covers how to apply for a team name, team member guidelines, and advertising guidelines for teams. Check it out at www.recbc.ca/psm/ team-names.
To learn about Teams and Agency, see www.recbc.ca/psm/teams-and-agency/.
Your real estate board may also have rules related to teams. Before creating a team, or joining one, it is a good idea to check with your board to ensure you’re familiar with their requirements.
Since the October/November 2015 Report from Council newsletter, the following actions have been taken as a result of disciplinary hearings and Consent Orders conducted by the Council.
- Richard Thomas Valouche
- Hong Hong Luo and Hong H. Luo Personal Real Estate Corporation
- John Joseph Berry
- Michael Naprawa and Sunbelt Business Brokers BC (West Coast) Inc.
- Barbara Dawn (Bezeau) Aitken
- Guy Joseph Donat Bezeau
- Jeffrey Robert Simpson and Kaizen CRE Solutions Inc., dba Kaizen Solutions
- Tarik Hazem Gidamy and TheRedPin Brokerage, BC Inc., dba TheRedPin, Brokerage
- Oberfeld Snowcap British Columbia Inc., dba Oberfeld Snowcap Realty
- Paul Herng-Sing Jong (Jone) and Visar Realty (Vancouver) Inc.
- Paula Maureen Owen, dba West Kootenay Rental & Property Management Services
- Danilo (Danny) Hilario Samson
- Timothy Nicholas Dykes and Davin Management Ltd.
- Randall Scott Ullrich and Gateway Property Management Corporation