Report from Council, August 2005

At the first meeting of the 2005/2006 Council on July 19th, Dougal Shewan of Royal LePage — Wolstencroft, Langley, was elected as Chair and Philip Jones of Royal LePage East Kootenay Realty, Cranbrook, was elected as Vice-Chair. There are 21 members of the Real Estate Council. Three public members are appointed by the provincial government. One member is appointed by the Council as the rental/ strata management representative. The remaining 17 are chosen through the recently held elections open to all real estate licensees in the province. Members are elected for two-year terms, with half of the Council elected each year, thus ensuring continuity. The names of the other Council members are listed in the left margin on the next page.

As licensees may be aware, the Council’s Agency Task Force has been consulting with BCREA and its member boards regarding the recommendations contained in the final report of the CRG Agency Task Force. As a result of that consultation, the Council decided on the following courses of action.

1. The Council supports, in principle, the Association of Canadian Real Estate Educator’s (ACRE) development of an indepth curriculum with the goal being a national curriculum to be used for education regarding agency across Canada (with the exception of Quebec).
2. The Council will postpone any further consideration of implementing the CRG Agency Task Force recommendations until April 1, 2006 or sooner if the in-depth curriculum has been completed by ACRE.
3. The Council’s Agency Task Force will meet with industry organizations to discuss the delivery of such an education course.
4. The Council will establish a focus group from a cross section of the industry to consult on any related issues, including possible education delivery models.

The Council is intending to meet with interested industry groups with respect to agency issues commencing in the fall of 2005. Further information, including a copy of the final recommendations of the CRG Agency Task Force, can be viewed at www.canadianregulators.ca/ATMFMain.htm

I was pleased to be elected as Chair of the Council for the 2005/06 term. I look forward to working with our new members of Council, including Keith Bevington, William Brown, Jim McNeal and Ann Petrone as well as the continuing members of Council. In particular, I look forward to working with past Chair Rosemary Barnes who continues her service to Council over the next year. I would like to thank Rosemary for her leadership during the introduction of the Real Estate Services Act (RESA).

The year ahead will continue to see many important changes, including the licensing of strata managers as of January 1, 2006. In this regard, licensees involved in the provision of strata management services should carefully review the 4th Special Report to Licensees issued last month.

One of the substantive changes brought about by the introduction of RESA includes the increased regulatory authority and power of the Council. Included in this new authority is the ability for the Council to impose administrative penalties on licensees for technical contraventions of the Council Rules. I encourage all licensees to familiarize themselves with the Administrative Penalties Policy Statement #1 adopted by the Council as found on pages 5 and 6 of this Report.

As you will have noted from previous Reports, the Council continues to place a high priority on licensees familiarizing themselves with RESA, the Council Rules and Bylaws (found on www.recbc.ca). The new legislation outlines the minimum expected practice standards for licensees whether engaged in sales, rental property management and, as of January 1, 2006, strata property management. Please take the time to review the legislation in order that you can continue to provide the highest level of service to clients.

On behalf of Council,

Dougal Shewan, Chair

The April 2005 Report from Council contained a revised Trade Record Sheet reflecting changes required as a result of the introduction of the Real Estate Services Act. In addition, the revised form was posted in the Forms section on the Council’s website. As a result of feedback from managing brokers and brokerage accounting staff, the Council revisited the Trade Record Sheet and made a number of minor changes in the Remuneration section, including adding a section for GST, reorganizing the brokerage section and reducing the amount of space for remarks. The newly updated Trade Record Sheet is now posted on the Council’s website and available for use by brokerages. Brokerages may use this form or, in keeping with section 8-5(2) of the Council Rules, may use their own form, provided that it is approved by the Council.

Criminal Record Checks

Managing brokers are reminded that the Council is now carrying out criminal record checks on first-time licence applicants prior to licence issuance. This policy was developed in response to a rise in the number of false applications being made and is consistent with the process employed by other real estate licensing bodies. As a result, first-time licence applications may take up to three weeks in order for the Council to receive criminal record search results.

Late Renewals Treated as Re-Licence Applications

In keeping with section 2-13 of the Council Rules, a licensee must apply for licence renewal on the appropriate application form together with the appropriate fees, including the renewal fee of $425 no later than 30 days prior to the end of their current licence term. If a renewal application has not been received at the Council’s office by the renewal due date, the renewal application will be treated as a re-licensing application and the fee increases to $450.

Grow-Ops and Mortgage Fraud

In the December 2004 Report from Council, the Superintendent of Real Estate cautioned licensees with respect to the issue of marijuana grow operations and mortgage fraud. The Superintendent stated that his office takes the position that licensees have a responsibility to ensure the accuracy of information being provided to lenders. The Superintendent went on to say that, while he is not suggesting that licensees need to conduct in-depth investigations of every transaction they are involved with, some due diligence is required to ensure that information provided by clients has been verified. Licensees should reference the December article to get a better understanding of grow-ops and mortgage fraud, including a list of “red flags” pertaining to mortgage fraud.

Dealing with Property Inspectors

As a result of further complaints, the Council again reminds licensees that they must exercise caution when dealing with property inspectors. In particular, the following guidelines should be followed: 1. Once a buyer has determined which property inspector is to be used, licensees must respect the client relationship this creates between the buyer and the property inspector. The buyer is paying the property inspector for professional advice with respect to the condition of the property they are considering purchasing. 2. Licensees should not attempt to thwart that relationship either by downplaying the importance of deficiencies noted by property inspectors or by making disparaging comments about the buyer’s choice of property inspectors.

As reported previously, section 57(1) of the Real Estate Services Act allows the Council to impose administrative penalties on licensees who fail to adhere to the Council Rules. In accordance with section 2-23 of the Rules, the administrative penalties for a contravention of a rule specified by regulation under section 56(1) [rules subject to administrative penalties] of the Act are as follows: (a) $250 for a first contravention; (b) $500 for a second contravention; (c) $1000 for a third or subsequent contravention. The Council, at its meeting in July, adopted the Administrative Penalties Policy Statement #1 located on pages 5 and 6 of this Report. Licensees should review the list of Rules that are subject to administrative penalties. Administrative penalties may be applied to complaints received after October 1, 2005 for conduct that occurred after January 1, 2005.

Navtej Singh Bhupal while licensed with Royal Pro Real Estate Network Inc. requested the Real Estate Council of British Columbia to discontinue disciplinary proceedings against him as he has decided to permanently retire from real estate practice. Mr. Bhupal was facing a hearing as a result of his falsification of his application for licensing and would have been required to appear before a hearing panel of the Real Estate Council to respond to these allegations. Considering the fact that there is likely no greater disciplinary penalty than not being licensed to act again, the Real Estate Council agreed with Mr. Bhupal’s request. The lifetime ban on Mr. Bhupal’s licensing under the Real Estate Services Act is effective as of July 25, 2005.