June 2013 Report from Council Newsletter

Report from Council
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  • It has been suggested to the Council that there is an apparently growing practice of some licensees engaging and paying unlicensed assistants to show properties, host open houses or solicit buyers, sellers, landlords or tenants. These are services that a person must be licensed to provide. Paying an unlicensed person to provide services that require licensing is contrary to section 6-1 of the Council Rules. Licensees who do so may be found to have committed professional misconduct and be subject to discipline.

    Comprehensive guidelines relating to the services that an unlicensed assistant may not provide are found in the online Professional Standards Manual and under the heading ‘Licensee’s Assistants’ at this link www.recbc.ca/psm/licensees-assistants/. Similar guidelines relating to strata and rental property management services and unlicensed assistants may also be found in the online version of the Professional Standards Manual at www.recbc.ca/licensee/psm.html

    Being “too busy” because of the volume of a licensee’s business is not reason to consider using an unlicensed person to provide services that require licensing. Licensees who require assistance to fulfill their business obligations must only use licensed people engaged by the same brokerage to provide these services.

    The guidelines referenced above also include a list of services that unlicensed persons are allowed to provide. If a licensee engages an unlicensed person to provide these allowable services, they are reminded that section 3-2(4) of the Council Rules requires that “they must ensure there is an adequate level of supervision for their employees and others who perform duties on their behalf”. This supervision must include ensuring the unlicensed person does not go beyond these allowable services and begin to provide any service that requires licensing.

    Further, managing brokers are reminded that section 3-1(1) of the Council Rules requires that managing brokers must ensure that there is an adequate level of supervision for the related licensees of the brokerage and for employees and others who perform duties on behalf of the brokerage. In the event that a managing broker becomes aware that any unlicensed assistant is providing services that require licensing, they must take reasonable steps to deal with the matter or they may also face the consequences of professional discipline.

    Licensees with questions can contact the Council office at 604-683-9664, toll-free 1-877-683-9664 or email [email protected].

  • This July will mark the 55th anniversary of the Real Estate Council of BC. Over the years, the Council’s role as a regulator protecting the public interest has continually been expanded by successive governments, most notably with the introduction of the Real Estate Services Act in 2005 and the licensing of strata managers in 2006. The Council would not have been able to achieve this expanded role without the cooperation of industry stakeholders and the valuable contribution of past Council members and advisory group members. On behalf of the Council, I extend my sincere appreciation to all those who have helped with the ongoing regulation of the industry over the past 55 years.

    On July 1st, the Council welcomes newly elected members Richard Valouche, TRG The Residential Group Realty, Vancouver and Joseph Pearson, Re/Max Vernon, Vernon. We also welcome back re-elected members Garth Cambrey, Cambrey Consulting Ltd., Port Coquitlam, Abdul R. Ghouri, Royal Pacific Realty (Kingsway) Ltd., Vancouver, Marylou Leslie, Re/Max Performance Realty, Delta and Susan Lynch, Re/Max Centre City Realty, Prince George.

    Serving as Council Chair has been extremely rewarding and it has been my pleasure to serve the industry. It has been a great experience, which I will not soon forget. There are a number of people and organizations I would like to thank for their assistance and co-operation during my term as Chair.

    • David Moore, Director and Kevin Arndt, Associate Director, Licensing Education at the Real Estate Division, Sauder School of Business, University of British Columbia. Their continuing contribution to making British Columbia a leader in licensing education programs is very much appreciated by the Council.
    • The volunteers who serve on the Council’s Education, Trading Services, Rental Property Management, Strata Management, and Commercial advisory groups.
    • The British Columbia Real Estate Association and its member boards/ associations and, in particular, Past President Jim McCaughan and Chief Executive Officer Robert Laing.
    • Council Vice-Chair Marshall Cowe and the members of the Council, both past and present, that I have served with, who have made my time on the Council such a pleasure.

    Finally, I would be remiss if I did not thank the Council staff for their assistance during my year as Chair.

    Michael Ziegler,

    Chair

  • Each year, the term of six or seven Council members expires and elections are held to fill the vacancies. The following have been elected for a two-year term commencing July 1, 2013.

    New Council Members

    District #1 — County of Vancouver (managing/associate broker member)
    • Richard Valouche, TRG The Residential Group Realty, Vancouver (licensed for 27 years)

    District #6 — County of Yale (managing/ associate broker member)

    • Joseph Pearson, Re/Max Vernon, Vernon (licensed for 36 years)

    Re-elected Council Members

    All Districts — Rental Property/Strata Management Member
    • J. Garth Cambrey, Cambrey Consulting Ltd., Port Coquitlam (licensed for 27 years)

    District #1 — County of Vancouver (representative member)

    • Abdul R. Ghouri, Royal Pacific Realty (Kingsway) Ltd., Vancouver (licensed for 29 years)

    District #2 — County of Victoria (managing/ associate broker member)

    • Michael Ziegler, Newport Realty Ltd., Victoria (licensed for 37 years)

    Districts #4 & #5 — Counties of Westminster (N. & S. of the Fraser River) (representative member)

    • Marylou Leslie, Re/Max Performance Realty, Delta (licensed for 23 years)

    District #7 — Combined Counties of Kootenay, Cariboo and Prince Rupert (managing broker/ associate broker member)

    • Susan Lynch, Re/Max Centre City Realty, Prince George (licensed for 25 years)

    The following Council members have a further year to serve

    District #1 — County of Vancouver (managing/associate broker members)
    • William (Bill) Binnie, Royal LePage Northshore, West Vancouver (licensed for 38 years)
    • William (Bill) Phillips, Whistler Real Estate Company Limited, Whistler (licensed for 38 years)

    Districts #2, 3, 6, 7 — Combined Counties of Victoria, Nanaimo, Yale, Kootenay, Cariboo and Prince Rupert (representative member)

    • Subhadra Ghose, Re/Max of Nanaimo, Nanaimo (licensed for 22 years)

    District #3 — County of Nanaimo (managing/associate broker member)

    • Susan McGougan, Re/Max of Nanaimo, Nanaimo (licensed for 22 years)

    District #4 — County of Westminster (North of the Fraser River) (managing/ associate broker member)

    • Marshall Cowe, Royal LePage Coronation West Realty, Coquitlam (licensed for 41 years)

    District #5 — County of Westminster (South of the Fraser River) (managing/ associate broker member)

    • David Rishel, Re/Max Little Oak, Abbotsford (licensed for 27 years)

    Government appointed public members

    The Council’s government appointed public members are: Barbara Barry of West Vancouver, John Nagy of Delta and Bruce Turner of Courtenay.

    Retiring from Council

    • Bryon Brandle, Re/Max Vernon, Vernon, after six years of service
    • Patrick O’Donnell, Prudential Sussex Realty, West Vancouver after six years of service.
  • Licensees should be aware that the new Limitation Act came into force June 1, 2013. The new Limitation Act makes the law easier to understand and brings BC’s law more in line with other provinces.

    The Limitation Act sets out the time periods people have to start a proceeding to sue one another in the civil justice system. While many other laws set limitation periods, the Limitation Act sets the default regime, which means that unless another law sets the applicable limitation period, the Limitation Act applies. Key changes include:

    • moving from a variety of basic limitation periods, based on the type of legal action, to a single two-year basic limitation period for all civil claims. Exceptions to this are civil claims that enforce a monetary judgment, exempted claims and actions that have limitation periods set by other statutes;
    • moving from a general 30-year ultimate limitation period to a single 15- year ultimate limitation period; and
    • changing the commencement model of the ultimate limitation period from an “accrual” model to a model that starts the clock running in the ultimate limitation period based on an “act or omission”

    More information on this new Limitation Act can be found at www.ag.gov.bc.ca/legislation/limitation-act/2012.htm

  • Underground or Above-Ground Heating Oil Storage Tanks

    Licensees involved in the listing or sale of a property that contains, or may contain, an underground or above-ground heating oil storage tank (OST) should be aware that the presence of an OST can, because of the potential environmental concern, expose sellers and buyers to significant financial loss and liability. If the presence of an OST is either known or suspected, both buyers and sellers should be advised to seek the advice of an environmental professional, as well as legal advice about their obligations and potential liabilities.

    Many homes built before 1970 were heated using oil that was stored in an underground or above-ground OST. When homes were later converted to natural gas or electricity, underground tanks were not usually removed from the property; instead, the tanks were commonly left in place, filled with sand and capped. OSTs that remain buried may have rusted and corroded. If oil remained in the tank, leaking of that remaining oil could cause (or may already have caused) contamination of the property and adjacent properties.

    What to do if you are representing a seller

    If a seller is aware of an unused or abandoned OST, the seller has an obligation to disclose this fact in cases where the OST constitutes a material latent defect. While an unused or abandoned OST may not be necessarily considered a material latent defect under all circumstances, it seems clear, at a minimum, that a court would find an OST to constitute a material latent defect if actual leakage could be shown to have occurred. Of course, any representation about an OST on a disclosure statement made by the seller must be accurate, and a licensee acting for a seller must not be party to a representation that he/she knows to be incorrect. A seller may need to consult an environmental and legal professional as to whether the tank in question is a material latent defect.

    Where a seller is not aware of an unused or abandoned OST, but the licensee has reason to believe that an unused or abandoned OST may be present on the property, there is at least a possibility that an OST, if found to be present, would be considered to be a material latent defect. The courts have also held that a licensee acting for a seller has a duty “to check the completeness and accuracy of all information which it is usual and customary for brokers to verify.” Accordingly, it may be prudent for a licensee to advise the seller-client to take the steps necessary to determine whether in fact an OST is present, so that the later discovery of a tank, either before completion or after the sale of the property, does not leave the seller exposed to significant potential liabilities and expenses.

    What to do if you are representing a buyer

    If a licensee representing a buyer has knowledge that a property contains an unused or abandoned OST, the licensee has a duty to make this fact known to the buyer-client and to advise that the presence of the OST can, because of the potential environmental concern, exposes the buyer to significant financial loss and liability. If, on the other hand, a licensee acting for a buyer is not aware of an unused or abandoned OST, but suspects (or reasonably ought to suspect) the presence of an OST based on such factors as the age of the property, then section 3-3(1)(h) of the Council Rules requires the licensee to use reasonable efforts to determine whether an OST is present. If the licensee’s own efforts do not answer the question, then section 3-3(1)(d) of the Council Rules requires the licensee to advise the buyer- client to seek any necessary professional advice, such as the advice of an environmental engineer or consultant, and possibly legal advice as well.

    What to do if you are acting as a limited dual agent

    A licensee acting as a limited dual agent has a duty to be impartial to the interests of both the seller and the buyer, and must ensure that any advice about the presence or suspected presence of an OST given to one party is also given to the other. The duty of impartiality means that if an OST is discovered after acceptance of an offer, the licensee cannot provide advice to either party, and should recommend that both the seller and the buyer seek independent legal advice.

    What to do if an OST does exist

    Where it has been determined that an OST does exist, licensees and their clients should be aware of BC Fire Code provisions for the decommissioning of an underground OST that require the use of good engineering practices when removing, abandoning in place, or temporarily taking out of service, an underground OST. Additionally, licensees should refer their clients to the BC Ministry of Environment Fact Sheet entitled Residential Heating Oil Storage Tanks, which sets out concise and valuable information and advice. This Fact Sheet, and other useful information and links, can be found at the Ministry of Environment’s website at www.env.gov.bc.ca/epd/remediation/residential-heating/index.htm.

    Further, licensees must ensure that they or their clients enquire at their local government (city/municipal/district/ regional) office as to any bylaws, restrictions or permit requirements concerning unused or abandoned OSTs, as local governments have differing requirements and provisions for enforcing the removal or abandonment of underground or above-ground OSTs (usually administered by the local fire department). This is particularly important in areas where underground or above-ground storage tank removal enforcement is a priority.

    Lending institutions and insurers should also be consulted as they may also have corporate policy regarding underground or above-ground OSTs.

    When drafting contracts with respect to properties containing underground or above-ground OSTs, licensees should familiarize themselves with the information found in the Safety, Health and Environmental Disclosure Clauses section of the Professional Standards Manual, which can be found online at www.recbc.ca/psm/safety-health-and-environmental-disclosure-clauses/.

    Licensees with questions can contact the Council office at 604-683-9664, toll-free 1-877-683-9664 or email [email protected].

  • Professional Standards Manual Now Available in Improved Online Format

    The Council is pleased to advise that it has re-built the online version of the Professional Standards Manual (“PSM”) with a new search mechanism that makes it quicker and easier than ever to find relevant information. The PSM is available on the Council’s website at www.recbc.ca/licensee/psm.html and licensees are encouraged to bookmark this link in their web browser.

    The new search mechanism ranks search results in a similar manner to Google so that the most relevant results appear at the top of the search results page. Try searching for the word “Advertising”. By clicking on the first result (Advertising Requirements), you will see the start of the main section on Advertising Requirements and, if you want to see the entire section, click on the “View Entire Section” to bring up the whole Advertising Requirements section.

    The Council also advises that it is no longer distributing printed copies of the PSM. The decision to no longer print the PSM was not made lightly and was only made after careful consideration by the Council. The decision was made, in part, because of the universal use of the internet by real estate licensees, the frequency and number of changes being made to the PSM, and the high cost to print and mail the manuals.

    Licensees also have the option of downloading a PDF version of the PSM so that they can have it on their electronic device, even if internet access is not available.

    The Council requests that licensees please recycle their copy of the 2010 PSM (and any earlier editions if licensees still have them).

    Licensees with questions can contact the Council at 604-683-9664, toll-free 1-877-683-9664 or email [email protected].

  • Strata Property Regulation Amendment

    On February 28, 2013, there were changes to the Strata Property Regulation, BC Reg. 43/2000 as a result of Order in Council No. 090, which is now in effect. The following is a summary of the Order in Council No. 090-2013.

    The Strata Property Regulation is amended as follows:

    • (a) in section 4.1(2) by striking out “(e) and (h)” and substituting “(e), (h) and (n.1)”,

      (b) in section 4.1 by adding the following subsection:

      (2.1) The strata corporation must retain reports referred to in section 35(2) (n.2) of the Act until the disposal or replacement of the items to which the report relate, and

      (c) in section 6.2 by adding the following subsections

      (6.1) The date prescribed for the purposes of section 94(2)(a)(ii) of the Act with respect to a strata corporation that is formed after December 14, 2011, is the date that is 6 months after

      (a) The date of the strata corporation’s second general meeting, or

      (b) If the second annual general meeting of the strata corporation has been waived under section 41 of the Act, the last date by which the strata corporation would otherwise have been required to hold that meeting.

      (6.2) For certainty, a meeting held under section 230 of the Act must not be considered a second annual general meeting for the purposes of subsection (6.1) of this section.

    Further information on this and other changes to the The Strata Property Act and Regulation may be found on the website of the Ministry of Energy, Mines and Natural Gas-Office of Housing and Construction Standards at www.housing.gov.bc.ca/strata/regs/index.htm.

    The Strata Property Act and Strata Property Regulation may be viewed online at www.bclaws.ca.

  • The Council, at its May 2013 meeting, approved the following changes to the Council Rules. These changes take effect July 1, 2013.

    Section 7-9.1 establishes how a brokerage providing strata management services must treat blended payments received on behalf of a strata corporation and one or more sections of that strata corporation.

    Section 7-9.2 establishes a transition period during which brokerages that collect blended payments on behalf of strata clients will be expected to bring their business practices, to the extent they are not already, into compliance with the requirements of section 7-9.1. This transition period expires December 31, 2014.

    Changes to Real Estate Council RulesDescription
    Blended payments in strata corporations with sections
    7-9.1 (1) In this section, “blended payment” means money subject to section 7-9 (2), that is received by the brokerage by means of a single instrument or direct electronic deposit, a portion of which is received on behalf of a strata corporation that is a client of the brokerage and a portion of which is received on behalf of one or more sections of that strata corporation that are clients of the brokerage.Subsection (1) defines the term “blended payment”. An example would be a single cheque, received from a strata lot owner, which includes money payable to the strata corporation, as well as money payable to a section of that strata corporation.“Money subject to section 7-9(2)” refers to money that is held or received by a brokerage on behalf of strata clients.
    (2) If a brokerage receives a blended payment, the brokerage must deposit the money in the brokerage trust account maintained under section 7-9 (2) (a) in the name of the strata corporation or the section, as the case may be, in accordance with the instrument by which the blended payment is made.Subsection (2) requires the brokerage to first deposit the blended payment into the ‘operating’ trust account held in the name of the client to which the payment is made payable. This is “the brokerage trust account maintained under section 7-9(2)(a)” on behalf of that client.
    (3) No later than 7 days after the day on which a blended payment was received, the brokerage must(a) if the blended payment was deposited in a trust account maintained in the name of the strata corporation, transfer that portion of the blended payment that was received on behalf of a section of the strata corporation to a trust account maintained under section 7-9 (2) (a) in the name of that section, and(b) if the blended payment was deposited in a trust account maintained in the name of a section of the strata corporation, transfer that portion of the blended payment that was received on behalf of the strata corporation or received on behalf of another section of the strata corporation, to a trust account maintained under section 7-9 (2) (a) in the name of the strata corporation or the other section, as the case may be.Subsection (3) then requires the brokerage, within 7 days of receiving the blended payment, to transfer the portion of the payment received on behalf of the other party into that party’s ‘operating’ trust account.The provisions of existing section 7-9 of the Council Rules apply in relation to how this money is to be further segregated; e.g. into contingency reserve and/or special levy trust accounts maintained on behalf of each of the clients.
    7-9.2 Transitional implementation in relation to blended payments in strata corporations with sectionsAs an exception to the immediate application of section 7-9.1 [blended payments in strata corporations with sections], a licensee must comply with that section as soon as reasonably practicable, but is not otherwise required to comply with it until December 31, 2014.This section establishes a transition period for brokerages to bring their business practices, to the extent they are not already, into compliance with new section 7-9.1
  • Since the April 2013 Report from Council newsletter, the following actions have been taken as a result of disciplinary hearings and Consent Orders conducted by the Council.

    Trading Services

    • Janet Marie Kathleen Frost
    • Ravinder Kaur Hayer
    • Karrie Ann Grewal
    • Margaret (Maggie) Anne Densmore
    • Andrew Wing Fai Leung
    • Edith Chan
    • Sharon Tomoko Matsumoto
    • Kellie Leanne Pittman
    • Beverly Margaret Huston, Peter James Thompson
    • Todd Alexander Gillard
    • Sandy Wai Tak Li, Triple A Realty Ltd.
    • Lani Jo Weaver, HQ Real Estate Services Inc.

    Strata Management

    • Milena Bernini Carella, Johnny Kwai-Lok Lan, Ascent Real Estate Management Corporation

    Rental Management

    • Colliers International
    • Dawn Lynn Surette
    • Jeffrey Mark Toews, Steven Horovitz
    • Lita May Powell, Li-Car Management Group