Report from Council Newsletter, December 2016

One of the most important ways the Real Estate Council protects consumers is by investigating potential misconduct by real estate licensees. We may investigate as a result of a complaint, or we may begin an investigation on our own initiative if we discover information that could indicate misconduct.

The Council’s complaints and investigation process is principled and balanced in order to protect the public interest, while treating all parties fairly. The Council reviews and considers every complaint we receive. We investigate and take disciplinary action in appropriate cases.

Here are ten things you should know about how the Council handles complaints, how investigations are conducted, and what you can expect as a licensee if a discipline hearing is called.

1. Complaints and Investigations are Confidential

Unless it is necessary to obtain information, the Council does not publicly reveal the names of people we are investigating. During the course of an investigation, we keep that information confidential to protect the integrity of the investigation, and to protect the right to privacy of the licensee and the complainant.

2. Licensees Have a Voice

The Council receives hundreds of complaints every year. Our compliance team reviews each complaint and any information that was submitted along with it, to determine if the Council has the authority to act in the matter and if there is enough evidence to proceed with an investigation. We may contact the complainant to ask for more information.

As part of an investigation, we will ask the licensee to respond to us about the allegations that were made in the complaint.

3. We Encourage Communication to Resolve Misunderstandings

Often, complaints are the result of misunderstandings between licensees and consumers. We encourage licensees to take steps to resolve misunderstandings with clients before they become complaints.

4. Investigations are Carefully Reviewed

After the Council has completed an investigation, the file will be reviewed internally. If there is no evidence of misconduct, or insufficient evidence, the file may be closed. For certain types of misconduct, the licensee may receive an administrative penalty.

If there appears to be evidence of misconduct and an administrative penalty is not appropriate, a Complaints Committee will review the investigation report, the evidence, and the response the Council received from the licensee.

The Complaints Committee may decide the evidence is insufficient, and either close the file or request further investigation.

If there has been misconduct and the offence is minor, the Complaints Committee may decide to issue a Letter of Advisement. This letter, which is sent from the Council to the licensee, will outline the problems with the licensee’s conduct, and how the Council expects them to conduct themselves in the future. Letters of advisement are not public, and are not part of a licensee’s disciplinary record.

If there appears to be evidence of serious misconduct, the Complaints Committee may recommend that the Council hold a formal disciplinary hearing into the allegations against the licensee.

5. Licensees Have Choices

When a hearing has been recommended, the Council will send the licensee and the complainant a Notice of Hearing setting out the alleged misconduct approximately six months in advance of the hearing date. We will also let the licensee know that they have the right to submit a consent order proposal, if they want to admit to the allegations against them. If the Council agrees to accept a licensee’s consent order proposal, no hearing will be held. Instead, the licensee agrees to the penalty in the consent order, which will be published on the Council’s website.

If a licensee chooses not to submit a consent order proposal, the hearing will proceed and the Council will publish the Notice of Hearing on our website approximately two months ahead of the hearing date.

6. Consent Orders and Disciplinary Decisions are Public

Consent orders, which include an agreed statement of facts and the discipline ordered by the Council, are public information. Decisions from disciplinary hearings are also public. The Council is required to publish consent orders and disciplinary hearing decisions. They are published on the Council’s website, in the Report from Council newsletter, and on the Canlii legal website.

7. Council Hearings are Public

Holding open and fair hearings is an important part of our job to protect real estate consumers. Members of the public have the right to attend Council disciplinary hearings. The public can learn about scheduled disciplinary hearings through Notices of Hearings published on the Council’s Upcoming Hearings page.

Publishing information about upcoming hearings is an accepted best practice by regulators in industries and professions across Canada. Observers at Council disciplinary hearings must agree to abide by the Council’s Observer Guidelines.

8. You’ll Be Kept Informed

If there is a Council investigation into your conduct, we will ensure that you are notified when appropriate, and we will give you the opportunity to respond to us about the allegations that were made in the complaint.

If a hearing is recommended, you will receive a Notice of Hearing approximately six months ahead of the scheduled hearing date. You have until 21 days before the scheduled hearing to submit a consent order proposal to the Council if you wish to admit to the allegations.

9. A Licensee’s Role at a Hearing

As the licensee whose conduct is in question, you have the right to be at the hearing. You may be questioned and asked to give evidence during the hearing. If you choose, you can be represented by a lawyer, at your own cost.

If you choose not to attend, the hearing can proceed without you. Keep in mind, however, that licensees have an obligation to respond to Council requests and provide information during the course of an investigation.

10. Private Matters Remain Private

The Council does not publish information about a licensee or a complainant that could be considered an unreasonable invasion of privacy.

The Chair of a Hearing Committee may decide that a Council disciplinary hearing, or a portion of a hearing, must be held in private to prevent the disclosure of financial or personal matters, or other confidential information which could be damaging to the parties involved.

Learn more about the Council’s Complaints and Discipline process.

The purpose of the Real Estate Council is to serve the public interest and protect consumers by ensuring that real estate licensees are competent professionals serving their clients’ best interests, that complaints are investigated in a fair and thorough manner, and that licensees are appropriately disciplined for any wrongful actions. As we near the end of a transformational year for the British Columbia real estate industry, for buyers and sellers, and for the regulatory body charged with upholding the Real Estate Services Act, it is worth taking a moment to reflect on our mandate, and the actions we take to pursue it.

The public’s message has been clear: regulatory change was needed. Following the amendments introduced to the Real Estate Services Act this summer, the Council along with the Superintendent of Real Estate has been working hard to deliver that change. One new measure announced recently was to increase the transparency of the Council’s disciplinary processes by publishing Notices of Hearing ahead of scheduled disciplinary hearings. About 100 years ago, a wise judge wrote that “Sunlight is said to be the best of disinfectants … ” Canada’s Supreme Court recently quoted that and said, “Open government requires that the citizenry be granted access to government records when it is necessary to meaningful public debate on the conduct of government institutions.”

Since the announcement about publishing Notices of Hearing, some real estate licensees have expressed concern to the Council that such publicity could be taken to suggest that real estate licensees accused of misconduct are not being presumed innocent until proven guilty. Far from it.

In fact, providing the public with access to information about disciplinary hearings is one of the most important ways that the Real Estate Council ensures that the disciplinary process for real estate licensees is fair and transparent. The Council’s investigative and disciplinary processes are carefully designed to balance the licensee’s right to a fair process with the public’s right to access accurate information. And when members of the public can easily find information about the regulation of real estate licensees, they know they can have confidence in the professionals they turn to for help when buying or selling their homes.

Other licensees have asked us, “Will the Council publish my name if a consumer complains about me?” Complaints are not public — only hearings and disciplinary decisions. The Council’s investigations are confidential, to protect the privacy of both the complainant and the licensee. Make sure you read “10 Things You Need to Know About Complaints, Investigations, and Council Discipline” in this issue to clear up this and other common misconceptions about the discipline process.

Finally, I’d like to welcome the newest member of the Real Estate Council: Len Hrycan. Len was appointed to the Council for a two-year term, beginning December 2, 2016. Len’s qualifications and background, with over 30 years in local government administration, will add significantly to the depth of knowledge and experience of the Council. You can learn more about Len and all the newly-appointed members on the Council Members page of our website.

We look forward to working together in the new year, continuing to learn about the complex and vital evolution of the real estate industry in our province, and striving to ensure that consumers are well-protected, well-informed, and well-served by real estate professionals.

Robert Holmes, Chair

On October 24, 2016 amendments to the Real Estate Services Regulation took effect. Under the amendments, new regulations were introduced to set the quorum for Council meetings and the amount of a majority vote required to make a Council bylaw. These replace Council bylaw 3-3 and subsection 3-5(2), which were repealed at the time the new regulations came into force.

On December 2, Lenard Hrycan became the 12^th member to be appointed to the Real Estate Council of BC. Mr. Hrycan, who has been appointed for a two-year term, is retired as the Kamloops director of community and corporate affairs where he oversaw bylaws, fire services, and the city side of Kamloops RCMP operations. Mr. Hrycan completed a 35-year career in three departments with Kamloops city. Beginning as a design draftsman in the city’s engineering department in 1977, Mr. Hrycan worked within city planning and headed up the development and engineering services section. He is a graduate of Cariboo College.

Learn more about all the newly-appointed Members of Council.

Notice to Seller Regarding Assignment Terms — Translated Consumer Information Now Available

Licensees working with clients who prefer to read and speak in languages other than English can now take advantage of translated versions of the consumer advisory on the Notice to Seller Regarding Assignment Terms form to help their clients understand their rights regarding assignments.

Translations of the consumer advisory portion of the form are available in Punjabi, Persian, Simplified Chinese and Traditional Chinese. The Notice to Seller forms are available on the Council’s Forms page and through WEBForms. Turn to the second page of the form to find the translated consumer advisory notice.

In the months ahead, the Council plans to translate more key consumer information pieces, to help licensees ensure their clients are well-informed when making decisions about buying and selling real estate.

New Requirements on Form B Information Certificates

Strata managers: when you receive a request for a Form B Information Certificate, make sure you are providing all the information required. Earlier this year, following amendments to the Strata Property Regulation, new questions were added to the Form B, requiring a strata to disclose any termination resolutions, and any matters before the Civil Resolution Tribunal.

Termination Resolutions

A new question in paragraph (h.1) of the form reads, “Are there any winding-up resolutions that have been passed?” If the answer is yes, you must attach a copy of all resolutions with the completed form.

Tribunal Proceedings

Paragraph (j) now asks, “Is the strata corporation party to any court proceeding, arbitration or tribunal proceeding, and/or are there any judgments or orders against the strata corporation?” If there are matters before the Civil Resolution Tribunal, or the courts, you must attach details.

Other recent changes to the Strata Property Act and Regulation include:

• Strata owners can now terminate their strata corporation with an 80 percent vote of all eligible voters. Previously, a unanimous vote was necessary to terminate a strata corporation;
• Court oversight to protect minority-dissenting owners and registered charge-holders; and
• Regulations which refer to the 80 percent vote resolution, and reflect the rules applying to the termination of a bare land strata corporation.

For more information about the Form B Information Certificate see:

• updated Form B Information Certificate
• Order In Council
• Form B Information Certificate in the Professional Standards Manual

For more information about the Civil Resolution Tribunal see:

• Civil Resolution Tribunal

Form Changes: Are You Keeping Up?

A number of the standard forms available through WEBForms® have recently been updated. Are you using the most recent version? To find out, check the advisory notice from the British Columbia Real Estate Association available on WEBForms®- it provides detailed information on all the changes.

We’ve been making changes to Council forms and information as well — updating all references from “Council Rules” to “Rules.” That’s because, on September 30, 2016, rule-making ability was transferred from the Real Estate Council to the Superintendent of Real Estate. In future, new Rules and amendments to existing Rules will be made by the Superintendent. You can find the Rules online, and updated recently updated forms are available on the Council’s Forms page.

As a real estate licensee, you know it is essential to conduct a title search on every listing, to ascertain who owns the property, the status of the property (i.e. fee simple or leasehold) and any encumbrances against the property. But do you know what to do if, in the course of conducting a title search, you find a covenant that restricts the sale, ownership, or use of a property based on race, colour, or nationality?

Any provisions in restrictive covenants that are racist or discriminatory were declared void and of no effect in 1978, through an amendment to the Land Title Act. The Registrar of Land Titles is authorized to amend the register and record to show that any discriminatory covenant is cancelled.

Whenever you find a covenant with discriminatory provisions while conducting a title search, you should bring it to the attention of your clients. Let them know that those provisions in the covenant are void, and that they can make a request to the Land Title and Survey Authority of BC (LTSA) to have the cancellation indicated in the land title records. There is no customer fee for the cancellation of a discriminatory covenant.

Owners may submit requests to the registrar:

• Online through the LTSA Customer Service Centre.
• In writing by mail addressed to Registrar, New Westminster Land Title Office, Suite 300-88 Sixth Street, New Westminster, British Columbia, Canada, V3L 5B3.

The request should include the legal description and/or parcel identification number (PID) of the lands affected by the discriminating covenant, and the registration number of the covenant.

More information:

• Cancellations of Discriminating Covenants, Practice Note, Land Title and Survey Authority of BC
• Title Search procedures, Professional Standards Manual
• Land Title and Survey Authority of BC

What to Do When Buyers and Sellers Disagree Over Deposits

In this issue of You Asked Us, we’re focusing on deposits — specifically, on whether licensees should use a contract clause to clarify who is entitled to the deposit if a deal collapses. Read on to find out why a brokerage can’t rely on a contract clause to release a deposit it is holding in trust.

Q: I read an article recently that recommended that buyers’ agents should include a clause in the Contract of Purchase and Sale stating that the seller agrees to return the deposit if the deal doesn’t go through. Should I start including a clause like that in my contracts?

A: While a clause like the one you’ve described may seem like a simple way to avoid potential disagreements between sellers and buyers about the return of a deposit, in fact, it is not sufficient and could cause more complications for both parties and for the brokerage.

Here’s why you shouldn’t rely on a clause in the contract about the return of deposits:

• When a brokerage holds a deposit in trust, they do so as a stakeholder, not as an agent for one of the parties to the trade in real estate.
• If the trade is not completed, the brokerage can only release the deposit money if they have obtained a separate written release from both the buyer and the seller authorizing them to do so.
• If there is a dispute regarding the payment of the deposit and one or more of the parties will not sign a release, the brokerage or one of the parties may apply to have the funds paid into court.
• In the event of a dispute, it is up to the courts, not the brokerage, to interpret any terms in a contract including terms relating to the return of a deposit.

The Council cautions licensees against trying to draft a clause for the release of the deposit within the Contract of Purchase and Sale. We also caution brokerages not to assume that a clause in a contract is sufficient authorization for a brokerage to release a deposit without a separate written agreement.

A lot can change between when two parties enter into a Contract of Purchase and Sale and when a contract collapses. By obtaining a separate written release at the time the deposit is to be released, the brokerage is assured that both parties agree about how the deposit is to be disbursed. If one of the parties will not sign the release, that should be a red flag that there may be a difference of opinion about who is entitled to the deposit. Even if the terms of the contract seem clear, there may be adverse claims that require legal interpretation.

If the parties can’t come to an agreement, the brokerage may apply to the Supreme Court for an order to pay the money into court. Sometimes, advising the buyer and seller that going to court is the only option available if the parties are not able to come to an agreement is just the sort of encouragement the parties need to break their stalemate.

To learn more about the return of deposits, see:

• Return of Deposits, Brokerage Standards Manual
• Return of Deposits After Acceptance, Professional Standards Manual

Since the October 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

Trading Services (Sales)

• Guy Joseph Donat Bezeau, Associate Broker, Island Pacific Realty Ltd., Nanaimo
• Charles Edward Parker, Representative, Re/MAX of Nanaimo, Nanaimo, and Charlie Parker Personal Real Estate Corporation, RE/MAX of Nanaimo, Nanaimo, and Graeme Charles Parker, Representative, RE/MAX of Nanaimo, Nanaimo, and Graeme Parker Personal Real Estate Corporation, RE/MAX of Nanaimo, Nanaimo
• Ryan Gurinder Rana and Ryan Rana Personal Real Estate Corporation
• Sheryl (Sherry) Diane Hart, Managing Broker, Royal LePage Fort Nelson Realty, Fort Nelson, and Royal LePage Fort Nelson Realty, Brokerage, Fort Nelson
• Samuel Everard Whiffin, Managing Broker, Holland Park Property Marketing Ltd., Vancouver, and Holland Park Property Marketing Ltd., Brokerage, Vancouver
• Jason King Sang Ng, Managing Broker, Daylight Realty Ltd., Vancouver
• Minh Hai (John) Ly, Representative, Sutton West Coast Realty (Broadway Branch Office), Vancouver
• New Coast Realty, Brokerage, Richmond
• Ehsan Sharenejad, Representative, Sutton Group — West Coast Realty (Broadway Branch Office), Vancouver
• Bhupinder Singh Litt, Representative, Century 21 Coastal Realty Ltd., Surrey

Strata Management Services

• Michael Patrick Dumont, Managing Broker, Okanagan Strata Management Ltd., Kelowna
• Okanagan Strata Management Ltd., Brokerage, Kelowna
• Dan Lazar, Managing Broker, Solution Property Management Ltd., Richmond
• Yang-Sook Shin, Managing Broker, ALS Property Management Ltd., Burnaby, and ALS Property Management Ltd., Brokerage, Burnaby

Rental Property Management Services

• Courtney Allison Deshayes, Managing Broker, Vantage West Realty Inc. (Kelowna Branch Office), Kelowna, and Brittney Ann Vienneau, Representative, Vantage West Realty Inc. (Kelowna Branch Office), Kelowna
• Yi Chun (Tony) Chang, Representative, Top Vision Realty Inc., Richmond
• Donald Paul Nichol, Representative, Pacific Quorum Properties Inc. (Surrey Branch Office), Surrey
• Alexander Oghogho Moses, Managing Broker, City 2 City Real Estate Services Inc., Surrey
• Vantage West Realty Inc., Brokerage, Kelowna, and Adrian Joseph Hazzi, Associate Broker, Vantage West Realty Inc., Kelowna, and Brenda Lynn Maxwell, Managing Broker, Vantage West Realty Inc., Kelowna
• Yin Shuen Gilbert Lam, Associate Broker, Pacific Evergreen Realty Ltd., Vancouver