Report from Council Newsletter, August 2018

When I was appointed as the Chair of the Real Estate Council of BC in 2016, implementation of the recommendations made by the Independent Advisory Group (IAG), to make a positive difference for the regulation of real estate was what the government mandated. At the heart of all of those recommendations was one overarching goal — to protect consumers.

Over the past two years, the Council has taken significant steps to put in place changes recommended by the IAG report. From the introduction of the Anonymous Tipline, to increased transparency and openness in our governance and disciplinary processes, to changes in the educational requirements for new licensees, we are working diligently to enhance consumer protection, increase professionalism throughout the sector, and encourage consumer confidence. You can read about our activities in our latest Implementation Progress Report, available now on our website.

The Superintendent’s agency and disclosure rules, which took effect last month, enshrine two of the key recommendations of the IAG report: banning dual agency and increasing disclosure to consumers. Over the summer and fall, we will be collecting feedback from managing brokers and real estate licensees across the province in order to report on the implementation of these changes.

For most licensees, I expect that dealing with the new rules will be like cleaning a mirror. You and your clients will see more clearly the duties and roles that reflect good practice. As you work to incorporate the new disclosures and requirements of June 15, 2018 into your business practices, I encourage each of you to reflect on the many things that haven’t changed but have been made clearer for everyone:

• The fiduciary duties that underpin your agency relationship with your clients: loyalty, confidentiality, full disclosure.
• Your role as a trusted advisor with special expertise.
• Your responsibility to exercise professional judgment.

As the Council continues to transform its programs and services to become a more proactive and transparent regulator, we are also reflecting on what hasn’t changed:

• Our mandate of consumer protection.
• Our commitment to educating licensees.
• Our accountability to the Government, the public, and our stakeholders, including licensees.

With additional reforms on the horizon, these foundational pillars will help all of us navigate through this new era of consumer protection. The end result will be well-protected consumers, highly skilled and knowledgeable licensees, and a strengthened real estate sector.

The Council’s Annual Report, now available on our website, charts our activities as we continue to pursue these goals. The Council has adjusted its fiscal year end from June 30 to March 31. As a result, our 2017-18 report covers the 9-month period from July 1, 2017 to March 31, 2018.

Finally, I’m pleased to announce that the provincial government has appointed two new members to the Real Estate Council, each for an initial one year term. Neal Nicholson and Linda Allen bring a diverse range of skills and knowledge to their positions on Council, and I look forward to working with them on our journey towards creating a well-regulated real estate industry.

On June 15, 2018, the Superintendent of Real Estate’s agency and disclosure rules came into effect.

These rules protect consumers by:

• prohibiting limited dual agency in almost all cases, and
• requiring new disclosures about commissions, services to expect from a licensee, the risks of being an unrepresented party in a real estate transaction, and managing conflicts of interest between clients.

The agency and disclosure rules are intended to ensure that consumers receive better information to make informed decisions, and that licensees act with undivided loyalty to service their clients’ best interests.

Hearing from Stakeholders

The Superintendent of Real Estate has directed the Council to prepare a report summarizing the first 90 days of the implementation of the agency and disclosure rules. To support an active dialogue and gather valuable feedback from industry members, Council staff will be travelling around the province over the summer and early fall, conducting a series of roundtables with managing brokers from each real estate board. Each real estate board will invite a small number of managing brokers, representative of the diversity of brokerages within the board, to meet with Executive Officer Erin Seeley and other staff members for a morning of discussion and exchange of views. These opportunities for open dialogue will allow for the suggestions and ideas of industry members to be heard and considered directly and transparently.

To ensure that all licensees have an opportunity to give us feedback, we’ll be following up later in the fall with a survey.

All the input gathered from the managing broker roundtables will help shape our report and may influence how future changes are introduced and implemented. In addition to the roundtables, we are also in the process of gathering feedback on our current resources such as our forms, webpages, and mobile app.

Licensee Knowledge Base

The Council is continuing to develop additional resources for the Licensee Knowledge Base, providing you with go-to information on the agency and disclosure rules and how to comply with them.

Using the Knowledge Base, you can find the new disclosure forms and their corresponding guides, various articles and FAQs, and video and audio content to help you understand the agency and disclosure rules. It is also fully compatible with mobile devices and a wide range of web browsers so you can find answers to your questions whenever and wherever you are.

The Knowledge Base will continue to grow as we produce additional information and resources, including podcasts and webinars.

Managing brokers play an important role in training and supervising licensees and employees at your brokerage. Managing brokers aren’t just responsible for their own actions, but for the actions of the other licensees and individuals associated with their brokerage. It is critical for managing brokers to be familiar with industry best practices and ensure that they maintain their expertise and awareness through ongoing continuing education.

Because of those additional responsibilities, the Report from Council will now feature an additional section every month dedicated to providing support and guidance for managing brokers.

This month in the Managing Broker Corner, we’re focusing on how to comply with the obligation to keep the records that arise out of the Superintendent’s agency and disclosure rules.

1. Review Your Legislated Requirements

Make sure you understand sections 8-4 and 8-5 of the Rules. These two rules set out the various general records relating to the provision of real estate services that a brokerage must retain and the documents that must be kept in respect of trades in real estate.

2. Ensure Your Licensees Know the Rules

As a managing broker, you need to ensure that your licensees are aware of and comply with the Rules and the application of the Real Estate Services Act to the provision of all real estate services by a licensee, including the requirements for disclosure.

Licensees must promptly provide your brokerage with records related to the real estate services they provide. Remember that the obligation to provide records ‘promptly’ means without delay.

Licensees must provide the brokerage with copies of all of the mandatory disclosures they make to consumers, including all Disclosures of Expected Remuneration to Sellers (regardless of whether the offer was successful).

3. Establish Clear Procedures and Policies

Your brokerage should create policies and procedures for how disclosures and other records relating to a trade in real estate are collected, filed, and stored. By following these procedures each time they work with a consumer, licensees at the brokerage will help to ensure consumers are protected, and they’ll protect themselves and the brokerage from risk.

Mistakes can occur when things get busy and crucial steps are missed. Following standardized processes and checklists will help ensure that this does not happen at your brokerage.

4. Conduct Regular Training Sessions

It isn’t enough just to establish policies, you should also conduct regular training with your licensees to ensure they are familiar with your brokerage’s policies. As a managing broker you are expected to facilitate and encourage training and professional development for your licensees as part of your supervision responsibilities. Remember that under section 7.1 of the Real Estate Services Act, unlicensed directors, partners, officers or shareholders at the brokerage may not train or supervise licensees.

5. Learn More About Records Management

In this recent Council webinar, Maureen Coleman, Manager of Professional Standards, discusses how to maintain records in compliance with the Rules. You can also find additional information about records management on the Knowledge Base.

Between October 2017 and June 2018 a consultancy group, Reichert and Associates, conducted a review of the mandatory education that real estate licensees receive — both the pre-licensing courses and exams provided by the UBC Sauder School of Business and the Legal Update courses provided by the BC Real Estate Association and the Professional Association of Managing Agents for the Council. A review of licensing education was a key recommendation of the Independent Advisory Group.

The evaluation of licensing education was designed to assess the strengths, challenges, and opportunities for enhancing real estate licensing education requirements in BC.

The consultants gathered information for the review by:

• Reviewing documents
• Performing an environmental scan
• Interviewing stakeholders (such as education providers, licensees, and RECBC staff)
• Surveying all licensees.

Hearing from licensees about their experiences with the required education courses, and their thoughts about how education could be improved or updated was an important component of the study.

In February 2018, all licensees received an email invitation with a link to an online survey. The survey was launched on February 13, 2018 and closed on February 28, 2018. 5,872 licensees participated in the survey, for a response rate of 23%.

The goals of the survey were to:

• Explore emerging themes from the stakeholder interviews
• Determine gaps and needs of licensees
• Explore licensees’ perceptions of the necessary competencies for real estate practice
• Identify licensees interested in participating in in-depth interviews.

Based on the results of the survey and the in-depth interviews, Reichert and Associates concluded that stakeholders are largely in favour of additional regulatory course requirements, including specialized courses on agency, disclosure, contracts and ethical practice.

Selected Survey Results

Top Supports Identified by Licensees to Help Meet Regulatory Obligations

Nearly half of surveyed licensees indicated they would benefit from more education to meet their responsibilities as members of a regulated industry.

Nearly a third of licensees identified “closer monitoring by managing brokers” as one of the supports that would benefit them in meeting their responsibilities to clients and the general public.

76% of managing brokers were in favour of more regulation of their managing capacities, and 48% of strata managers would like to see limits to the maximum number of corporations that a strata manager can oversee at one time.

Do you think it is necessary to regulate the maximum number of licensees

that a managing broker can oversee at any given time?

Do you think it is necessary to regulate the maximum number of corporations

that a strata manager can oversee at any given time?

Survey participants were asked to rank what they considered the most important competencies for real estate licensees in their area of practice.

TOP REAL ESTATE TRADING SERVICES COMPETENCIES

TOP RENTAL PROPERTY MANAGEMENT COMPETENCIES

TOP STRATA MANAGEMENT SERVICES COMPETENCIES

When strata and rental property management licensees were asked whether they would like to see a program similar to the Applied Practice Course for trading services licensees become part of licensing education for their areas of practice, 69% of respondents agreed that it would be beneficial.

THE MAJORITY OF STRATA AND RENTAL PROPERTY LICENSEES WANT A MENTORSHIP COMPONENT WITHIN THEIR LICENSING EDUCATION

Next Steps

Reichert and Associates submitted a final report on the Education Review in June 2018. The report, which includes analysis of survey responses, outlines 10 recommendations for changes to enhance licensing education.

The Executive Summary of the final report by Reichert and Associates is available online. The Council has developed an Education White Paper, outlining the achievements to date in reforming licensing education, and the key opportunities ahead. As detailed in the white paper, the Council intends to adopt a phased approach to introducing enhancements to its licensing education programs. Look for more details on the Education White Paper in a future edition of the Report from Council.

Key changes that have already been introduced include:

• Raising the passing grade for the licensing examinations and Applied Practice Course assessments to 70%
• Introducing a more comprehensive English Language Proficiency Requirement
• Transforming Legal Update courses to foster a more robust blended learning environment.

More Information

• Executive Summary — RECBC Licensing Evaluation. Final Evaluation Report*

*Note: The full report is available upon request. To request a copy, contact [email protected].

At their July 2018 meeting, Council members approved new Administrative Penalties Policies, now posted online.

Council members directed staff to consult with stakeholders in order to develop new versions of the Disclosure of Representation in Trading Services and the Disclosure of Risks to Unrepresented Parties forms specific to the needs of prospective tenants, for use by rental property management licensees. For more information about this planned consultation process, read the Stakeholder Engagement page.

See the Council Meetings page for the upcoming meeting schedule and minutes of the July 2018 Council meeting.

The third report on the progress of the Council’s implementation of the recommendations made by the Independent Advisory Group (IAG) is now available on our website. The report outlines the considerable steps the Council has taken up to March 31, 2018, including:

• Launched an Anonymous Tipline to facilitate reporting of licensee misconduct.
• Commissioned an independent review of educational requirements including a survey of real estate licensees and initial recommendations on the competencies required for effective professional practice at initial licensing and for continued practice.
• Developed and approved four new mandatory consumer disclosure forms required under the Superintendent’s agency and disclosure rules.
• Developed a new mandatory continuing education course in collaboration with UBC Sauder School of Business, Real Estate Division.
• Created and published SanctionsGuidelines to inform licensees and the public and guide discipline committees regarding the considerations involved in determining appropriate penalties for misconduct.

The Council is committed to implementing all of the recommendations of the IAG. We will continue to take steps to make these changes and enhance public trust in the real estate industry.

Find all the implementation progress reports on the Independent Advisory Group page.

The Council’s Annual Report for the 2017-2018 fiscal year is now available on our website. The report covers the 9-month period from July 1, 2017 to March 31, 2018, as the Council has adjusted its fiscal year end from June 30 to March 31, in order to align its financial reporting with Government Service Plan requirements as a Crown Agency.

The report, Building Trust, reflects the Council’s continued commitment to safeguarding the public interest in the real estate industry. Not only does the report provide financial statements and statistical information, it also outlines the Council’s initiatives towards promoting public trust, such as:

• removing barriers to reporting misconduct,
• increasing investments in technology,
• repealing pre-screening processes,
• increasing the transparency of our processes, and
• ensuring that complaints are dealt with appropriately, efficiently and effectively.

In the coming year, we will work diligently to continue to ensure that licensees are provided with resources to help them comply with enhanced agency and disclosure requirements, and to build consumer awareness of the Council’s services.

Highlights of the 2017-18 Annual Report:

The Council is pleased to welcome two new members, who were appointed by the Honourable Carole James, Minister of Finance, on July 12, 2018. Linda Allen of Victoria and Neal J. Nicholson of Coquitlam will join the 12 current members in overseeing the Council’s policy implementation and direction, and setting strategic direction for the Real Estate Council of BC.

This addition brings the total number of serving Council members to fourteen and provides an increasingly diverse range of knowledge and skill. All members of Council are publicly appointed.

Learn more about Council members on the Real Estate Council Members page.

The Real Estate Foundation of BC (REFBC) is pleased to announce that it has released its 2017-18 Annual Report and Audited Financial Statements. Download the report to learn about REFBC’s grants, projects, and operations.

In its 2017-18 reporting period, REFBC supported BC communities by:

• granting more than $6.6 million to support land use and real estate related research, education, and policy analysis,
• releasing five public reports,
• hosting several working groups and collaboratives, and
• beginning to make impact investments.

REFBC receives income from the interest earned on pooled brokerage accounts. That money is returned to BC communities through its grants programs. Since 1988, REFBC has approved more than $80 million in grants. To keep-up-to-date on REFBC’s work, sign up for their e-newsletter.

Since the April 2018 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 (Sales)

• Murray Allan Thompson, Representative, Angell, Hasman & Associates Realty Ltd., Vancouver
• Jing (Sandra) Li, Representative, New Coast Realty, Richmond
• HEARING DECISION: Shahin Behroyan
• Kamaljit Singh Bansal, Representative, City 2 City Real Estate Services Inc., Surrey
• Arlene Christina Chiang (Uy), Managing Broker, Oakwyn Realty Ltd., Arlene Chiang Personal Real Estate Corporation, Vancouver
• Guang Hui (Kevin) Lu, Kevin Lu Personal Real Estate Corporation, Royal Pacific Realty Corp., Vancouver
• Ranjit Singh Villing, Representative, SRS Panorama Realty, Surrey
• Francis Robert Braam, Managing Broker, Royal LePage Kelowna, Kelowna
• Michael Anthony Uy, Michael Uy Personal Real Estate Corporation, Representative, Oakwyn Realty Ltd., Vancouver
• Yue (Helen) Yin, Associate Broker, Home Park Realty Inc., Richmond
• John Kiyoshi Yetman, Representative, Royal LePage Kelowna, Kelowna
• NOTICE OF PERMANENT SURRENDER OF LICENCE: Keith Kin Wai Leung
• Rupinder Dawodharry, Currently Unlicensed
• HEARING DECISION: Ciu Zhu (Danielle) Deng

Strata Management Services

• Michael Kenneth Roblin, Representative, Dynamic Property Management Ltd., Squamish

Rental Property Management Services

• Linda Louise Gabara, Managing Broker, North Cariboo Realty Ltd., Quesnel
• Sailendra Jainesh (John) Prasad, currently unlicensed
• Donald Henry Frederiksen, Managing Broker, O.J. Realty & Property Management Inc., Campbell River and O.J. Realty & Property Management Inc., Brokerage, Campbell River
• SUSPENSION ORDER: Tejwant Danjou