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October 2016 Report from Council Newsletter

October 2016 Report from Council Newsletter

Report from Council
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  • Amendments to the Real Estate Services Act (RESA) were brought into force by Regulation on September 30, 2016, ending self-regulation of the real estate industry in BC and introducing higher discipline penalties for contraventions under the Act.

    Significant amendments to RESA include:

    • Council members appointed by Government, including the appointment of the Council’s Chair and Vice-Chair. (See section 74, Council membership)
    • The Superintendent of Real Estate has increased authority, including the power to oversee and direct the operations and activities of Council. (See section 89.1, Role of the superintendent respecting real estate council)
    • The Superintendent may designate contraventions of certain rules as subject to administrative penalties. Administrative penalties have been increased to a maximum of $50,000. (see section 56, Designated contraventions and penalty amounts)
    • Rule-making ability has been transferred to the Superintendent of Real Estate. As a transitional measure, for one year the Superintendent may make rules without the requirement to consult with licensees. The rules previously made by the Council will continue in force until modified or repealed. (see section 89.2, Superintendent rules, and section 137.3, Transition- superintendent rules)
    • Changes to responsibility for training and supervision. Amendments to the legislation provide that a brokerage’s unlicensed partners, directors, officers, sole proprietors or shareholders may not train or supervise licensees in respect of real estate services or the provision of real estate services. (See section 7.1, Brokerage responsibility respecting training and supervision)
    • Significant increase in discipline penalties imposed on licensees and brokerages. Maximum penalties for each contravention are increased from $10,000 to $250,000 for individuals, and from $20,000 to $500,000 for brokerages. These penalties will apply to misconduct that occurs on or after September 30, 2016. Additionally, licensees may be ordered to pay, as an additional penalty, any remuneration accepted in relation to the real estate services. (See section 43, Discipline orders)
    • Significant increase in penalties for unlicensed activity. Individuals or corporations may be penalized by the Superintendent of Real Estate with fines up to a maximum of $250,000 and $500,000, respectively. Additionally, unlicensed operators may be ordered to pay, as an additional penalty, any remuneration accepted in relation to the real estate services. (see section 49, Orders respecting unlicensed activity)

  • The Real Estate Council of BC is embarking on a new chapter of its history.

    In July 2016, the Government of BC introduced reforms to legislation regulating the real estate profession, expanding the remedial powers of the Real Estate Council and providing for all Council members to be appointed. In October, a diverse group of eleven new members of the Real Estate Council of BC were appointed. I have the honour of having been appointed Chair of Council for 2016/17. Robert Gialloreto, the CEO of Consumer Protection BC, joins me as Vice-Chair of the Council.

    On behalf of all the current Council members, I want to emphasize how honoured we are to have the opportunity to serve the public of British Columbia as members of the Real Estate Council of BC. We understand the importance of protecting the public interest and advancing the mandate of this important consumer protection organization. We look forward to working with the new Superintendent of Real Estate, Micheal Noseworthy, to ensure that real estate services regulation in British Columbia is effective, transparent and fair.

    It is my goal during my time as Chair of the Council to ensure that the recommendations made earlier this year by the Independent Advisory Group (IAG) result in reforms that make a positive difference for the regulation of real estate. We all want to see public confidence in the oversight of the real estate industry restored, and the IAG recommendations provide a clear path to making that possible.

    The Council is working together with the Superintendent of Real Estate to implement a suite of changes that will include:

    • Increasing the focus on ethics in licensing education to ensure that new licensees enter the industry fully prepared to provide professional services.
    • Expanding the Council’s information and resources for the public, to make sure that the public is informed about the duties and obligations to expect from a real estate licensee.
    • Ensuring that consumers have easy access to the Council’s complaints system, so that when something goes wrong, the Council can take action to investigate promptly.
    • Meting out appropriate discipline and consequences for misconduct, including, where applicable, using the expanded remedial powers and increased discipline penalties now available as a result of Government’s amendments to the Real Estate Services Act.

    Finally, I’d like to thank Robert O. Fawcett, the Executive Officer of the Council, for his leadership and professionalism over many years. Robert is retiring at the end of the month after 37 years of dedicated service. Erin Seeley has joined the staff of the Council as the Acting Executive Officer, effective November 1, 2016. Erin is an experienced administrator whose skills will be a great asset to the Council during this transition.

    I look forward to sharing more information with you over the course of the coming year about the many positive changes ahead.

    Robert D. Holmes, Chair

  • On October 12, 2016, Finance Minister Michael de Jong announced the appointment of nine public-interest members to the Real Estate Council of British Columbia. This was followed by the announcement on October 25 of a further two members. The eleven newly-appointed Council members bring a diverse range of skills and knowledge to their positions on Council, including regulatory experience, legal expertise, and knowledge of the real estate industry.

    Robert D. Holmes, Q.C., has been appointed as Chair of the Council. Mr. Holmes is an experienced litigator and arbitration lawyer, and has previously served as President of the Trial Lawyers Association of B.C., as president of the BC Civil Liberties Association, and on Provincial Council of the B.C. branch of the Canadian Bar Association.

    Robert Gialloreto has been appointed Vice Chair. Mr. Gialloreto is president and CEO of Consumer Protection BC, which promotes a fair marketplace for BC consumers and businesses. Prior to this role, he was the president and CEO of Tourism Victoria, the destination marketing organization for Greater Victoria.

    The remaining members of Council are:

    • John L. Daly of Vancouver, a former news reporter for Global BC from 1980 to 2016.
    • Sandra Lynn Heath of Vancouver, president of HTD Inc.
    • Kevin Peter Lonsdale of Nanaimo, executive director for Canadian National Association of Real Estate Appraisers.
    • Gerald Lawrence Martin of Abbotsford, the managing broker of B.C. Farm and Ranch Realty Corp.
    • Elana Valerie Mignosa of Vancouver, the chief financial officer for British Columbia Clinical and Support Services.
    • Sukhmander S. Sidhu of Abbotsford, a representative with RE/MAX Little Oak Realty.
    • Laurie Marie Sterritt of Vancouver, director of Aboriginal Employment and Business Development at BC Hydro.
    • William Thomas Styffe of Okanagan Falls, semi-retired after a career in Construction Project Management.
    • Maili Wong of Vancouver, first vice-president, investment advisor and portfolio manager with CIBC Wood Gundy.

    “On behalf of the staff of the Council, I wish to welcome the newly-appointed Council members,” said Council Executive Officer, Robert O. Fawcett. “We look forward to working with each of you to protect the public interest and ensure that regulation and enforcement of real estate licensee conduct is effective, transparent, and fair.”

  • The Council office will be closed on Friday, November 11, 2016 for Remembrance Day.

  • Changes to the Council’s Education Waivers

    The Council recently approved changes to its education waiver policies, which will affect new and returning licensees. The following changes take effect January 1, 2017:

    • Licensing education waivers — Individuals can apply for educational exemptions if they have completed approved prior education within the last 10 years. Anyone who became licensed on the basis of prior education and who becomes unlicensed, will be subject to the educational requirements for licence reinstatement as detailed below if their education is no longer valid.
    • Education required for licence reinstatement — Individuals who wish to become relicensed, and who currently have a surrendered, suspended, or inoperative licence, must re-qualify for licensing. Individuals may request an exemption from the requirement to re-qualify if they are within a waiver period based on the length of their prior licensing:
    • Licensees may apply for re-licensing for up to 12 months after passing a licensing examination.
    • Individuals who were licensed for less than one year may apply for re-licensing for a period equivalent to the past licensed period.
    • Individuals who were continuously licensed for one year but less than five years may apply for re-licensing for up to one year.
    • Individuals who were continuously licensed for five years or more may apply for re-licensing for up to two years

    This will apply to all licensees regardless of when they became unlicensed, unless they were provided with a requalification date in writing from the Council.

    • Parental, Medical and Compassionate Care Leaves — Individuals may request up to one year of parental or medical leave, and this leave will no longer be added to the education re-qualification waiver period. A compassionate care leave is now available for licensees who must care for a gravely ill family member.

    If you have any questions or concerns about these changes, please contact the Council’s education department at 604-683-9664 or by email at [email protected]. The policies will be posted on the Council’s website on January 1, 2017.

    New Examination Requirements

    New higher minimum passing grades have been approved by the Real Estate Council as the first of a number of planned measures to raise entry standards and increase professionalism among real estate licensees.

    Beginning January 1, 2017, all individuals in a real estate services licensing course must obtain a minimum grade of 70% in order to pass the licensing examination. Students in the Residential and Commercial Applied Practice Courses must also attain a minimum grade of 70% on all course assessments. The new passing grade raises the required minimum by 5%.

    Further measures to raise entry standards and increase public protection are expected to be announced in the months ahead, including a comprehensive review of licensing education.

    Changes to Council Publication Policies

    The Council is enhancing its website to ensure that information on discipline decisions, upcoming hearings, and licence conditions and restrictions is easy for consumers and licensees to find and understand. These changes are intended to increase consumer protection and enhance the transparency and effectiveness of the Council’s disciplinary processes.

    Beginning December 1, 2016:

    • Discipline decisions against licensees who have been reprimanded and/or fined up to 20% of the maximum penalty will be published on the Council’s website for 5 years.
    • Discipline decisions against licensees who have been suspended for up to one year, or received a fine greater than 20% of the maximum penalty will be published for 10 years.
    • Licence suspensions of one year or greater, maximum fines, licence cancellations, and orders in urgent circumstances will be published in perpetuity.
    • Discipline decisions will be linked to licensee search results available from the Council’s online licensee search page.
    • Any conditions or restrictions on the licence of an individual or brokerage will appear in the licensee search results available from the online licensee search page.
    • Upcoming notices of hearing will be published on the Council’s website and will include the licensee’s name, the allegations against them, and the date and time of the scheduled hearing.

    Changes to Increase of Deposit Clause

    Sometimes, a seller and buyer may agree that a deposit will be payable on acceptance or within a stated time period. In these cases, the Professional Standards Manual provides guidance for licensees and suggests relevant clauses to include in a Contract of Purchase and Sale. (See Deposit Payable on Acceptance or Within a Stated Time Period)

    The Council has made changes to this section of the Professional Standards Manual to assist licensees in a situation in which a buyer agrees to increase a deposit when subjects are removed.

    If the Contract of Purchase and Sale provides for a small initial deposit payable within a specified period of time after the acceptance of an offer, and the deposit is to be increased to a specified amount upon subject removal, use the following clause in the contract:

    Increase of Deposit Clause

    The deposit will be increased to $ (insert amount) upon removal of all conditions precedent.

    The Increase of Deposit Clause is available in the Professional Standards Manual, and on WEBForms™.

    If you have any questions, you should discuss the use of this clause with your managing broker. Managing brokers with questions about the use of this clause may contact the Council’s Professional Standards Advisor, at [email protected]

    More information:

    Fall Seminar Series: Civil Resolution Tribunal for Strata Managers

    This fall, the Council offered licensed strata managers the opportunity to learn more about BC’s new online tribunal for resolving strata and small claims disputes — the Civil Resolution Tribunal (CRT). In a series of professional development seminars held across the province, strata managers gained a deeper understanding of the CRT and of their role in the dispute resolution process.

    Strata property owners and strata corporations can use the CRT to resolve disputes such as:

    • non-payment of monthly strata fees or fines;
    • unfair actions by a strata corporation or by people owning more than half of the strata lots in a complex;
    • unfair or random enforcement of strata bylaws (such as noise, pets, parking, rentals);
    • failure of a strata to enforce its bylaws;
    • issues of financial responsibility for repairs and the choice of bids for services;
    • irregularities in the way meetings, voting, recording of minutes, or other matters are carried out;
    • interpretation of the legislation, regulations, or bylaws; and
    • issues regarding common property.

    Strata law expert Adrienne Murray led the seminars, providing details about the CRT and its processes and procedures, the role of the strata manager during a dispute, and the CRT’s potential impact on the strata management industry. A particular focus was whether and how a strata manager may represent a strata corporation at various stages in a CRT proceeding, and an overview of amendments to the Strata Property Act that came into force in conjunction with the Civil Resolution Tribunal Act.

    Participants commented that the seminars helped them to develop “strategies to advise a strata council in handling hearings,” as well as understanding that “strata managers should assume the role of ‘helper’ and not the strata corporation representative.” In post-seminar evaluations, nearly 90 percent of respondents indicated that information they learned at the seminar will assist them in their jobs.

    Did you miss the events?

    CRT seminar information will be posted on the strata management resources section of the Council’s website in early 2017.

    More information:

    Annual Report 2016

    The Council’s Annual Report for the 2015-16 fiscal year is now available online. As well as covering activities undertaken over the course of the past year, the Annual Report includes a look ahead at initiatives that will be undertaken in the coming year, as part of the planned implementation of recommendations from the Independent Advisory Group.

  • Foreign buyers of residential real estate in the Greater Vancouver Regional District must pay an additional property transfer tax, following recent amendments to the Property Transfer Tax Act. The amendments, which came into effect on August 2, 2016, require foreign buyers to pay an additional tax (the Additional Tax) of 15% of the fair market value of the property or share of the property purchased. The Additional Tax does not apply to Tsawwassen First Nation Lands.

    If you are a licensee representing foreign buyers in Greater Vancouver, you should recommend that your clients obtain legal advice about any property transfer tax issues.

    The British Columbia Real Estate Association has developed the following clause to use in Contracts of Purchase and Sale when buyers are foreign entities or taxable trustees.

    Buyers are Foreign Entities Clause

    The Buyer is and will be on the Completion Date, a “foreign entity” or a “taxable trustee” as defined in the British Columbia Property Transfer Tax Act (as amended) (collectively the “Foreign Entity”). The Buyer is aware that that the Property Transfer Tax Act as amended imposes an additional Property Transfer Tax of 15% of the fair market value of any residential property being purchased by a Foreign Entity. The Buyer will thus be required to pay Property Transfer Tax equal to the total of:

    1. 1% of the Purchase Price on the first $200,000;
    2. 2% of the Purchase Price that exceeds $200,000 but does not exceed $2,000,000;
    3. 3% of the Purchase Price that exceeds $2,000,000; plus
    4. an additional Property Transfer Tax equal to 15% of the Purchase Price.

    The Buyer has obtained or will obtain independent legal advice with respect to the payment of Property Transfer Tax.

    The clause is available on WEBForms™.

  • The BC Law Institute recently published a consultation paper on complex stratas, which includes recommendations for changes to the Strata Property Act. This is now in its last phase, and requires public analysis and commentary.

    The three legal devices dealt with in the consultation paper are:

    1. sections, which allow for the creation of mini strata corporations;
    2. types, which allow for the allocation (to specific strata lots) of expenses paid for out of a strata corporation’s operating fund; and
    3. phases, which allow for the development of strata properties in segments over an extended period of time.

    Please review the tentative recommendations and provide feedback by:

    If you choose to complete the response booklet, you can submit it by emailing it to [email protected], or faxing it to 604-822-0144.

    This consultation will remain open for feedback until January 15, 2017. If you have any questions, please contact [email protected].

  • Drones — small unmanned flying vehicles, controlled remotely by someone on the ground — are becoming increasingly popular in a number of industries. Fire services use drones to spot and track the spread of forest fires. International aid organizations use them to drop supplies. Amazon is considering a delivery services using drones. And real estate licensees are using drones to offer potential buyers panoramic images of properties.

    However, licensees who use drones to photograph properties risk violating aviation regulations and may be infringing on the privacy rights of neighboring property owners. So before you launch that drone, read on, and ensure that you’re staying within the law.

    Q: I see that some licensees are starting to use drones to take aerial photographs of properties. I’d like to use a drone for my new property listing. Is there anything I need to be aware of before I send it up?

    A: While using a drone may seem like an easy, affordable way to get some great aerial views of your client’s property, there are a number of considerations to be aware of.

    Transport Canada Regulations

    If you plan to fly a drone for any work purpose (such as taking photos of a property) you must apply for special permission from a Transport Canada Civil Aviation Regional Office. See Getting permission to fly your drone, on the Transport Canada website. You should apply for a certificate of permission at least 20 days in advance of the date you wish to fly the drone. The permit specifies how the drone may be used, including maximum altitudes and the minimum distances from people and property.

    Unless you have obtained specific permission, Transport Canada recommends that you avoid flying a drone over populated areas, moving vehicles, highways, bridges and busy streets. See Do’s and Don’ts for flying your drone safely and legally for more information.

    Operators who fly drones for business purposes without permission risk penalties from Transport Canada including fines of up to $5,000 for an individual and $25,000 for a business.

    Licensees are reminded that they must promptly notify the Council in writing if they are charged with (or convicted of) an offence under a federal or provincial enactment or under a foreign law, as per section 2-21(2)(d) of the Rules. Any licensee found to have violated Transport Canada regulations is subject to investigation, which may result in disciplinary action by the Council.

    Privacy and Trespassing Risks

    Drones equipped with cameras could be breaching privacy rights of neighboring property owners. Licensees operating drones must be aware that under BC’s Personal Information Protection Act, individuals have the right to sue others for violating their privacy without permission, and for unauthorized use of photographs of people, buildings or properties.

    Under Transport Canada regulations, drone operators must respect laws regarding privacy and trespassing.

    It is recommended that you inform neighboring property owners, and seek their permission before photographing listings from the air.

    Potential for Property Damage

    Drones may cause property damage if used irresponsibly. After an unauthorized drone grounded water bombers and fire fighting crews in southern BC for several hours during the summer of 2015, the BC Wildfire Service prohibited the use of drones within five miles of a forest fire. Violators can face fines of up to $100,000.

    More Information:

    Transport Canada: Flying your drone safely and legally

  • Since the August 2016 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

    Rental Property Management

    Strata Management Services