Report from Council Newsletter, December 2019

In times of change, it is nice to know that some things will always stay the same. Take our industry, for instance. While the regulation of real estate in BC has undergone some significant changes in the past few years, RECBC’s mission, vision and mandate are rock steady: we are here to ensure that British Columbians working with licensed real estate professionals are well informed, well protected, and can have confidence in the services they receive.

With the recent announcement from the Ministry of Finance of the government’s intention to create a single regulator responsible for the province’s financial sector, including real estate, those protections for BC consumers will become even stronger. The merger will see RECBC and the Office of the Superintendent of Real Estate (OSRE) integrated within the BC Financial Services Authority (BCFSA). As a single regulator, we’ll work to regulate the real estate market, combat money laundering and ensure the highest protections are in place in the public interest.

By spring 2021, it is anticipated that the BCFSA will be fully responsible for regulating real estate in the province. Until that time, here’s what you can expect from RECBC: we will be continuing our transformation into a proactive, modern regulator.

That means investing in technology to bring more of our licensing processes online, reducing the length of time required for investigations, becoming more efficient in our audit processes, updating our information and resources for professionals, introducing new continuing education courses, and much more. In other words — things will be changing, but what will stay the same is our commitment to ensuring that real estate professionals in BC are able to provide the highest level of service to consumers, and that the regulation of real estate professionals is effective and efficient.

This issue of Report from Council has lots of information about work underway to achieve that goal. In particular, I hope that you take a few minutes to read about new continuing education courses to expect in the coming months.

In January, registration will open for Anti-Money Laundering in Real Estate — a mandatory course that all BC real estate professionals must complete. I strongly encourage every real estate professional to register and complete this course as soon as possible. It will help you to be able to assure your clients that you have the tools and knowledge to help protect them, and protect your community. Money laundering has negative impacts on all British Columbians, and as real estate professionals you can be part of helping to keep dirty money out of our real estate markets.

As 2019 comes to an end, I want to take this opportunity to wish you and your family a happy holiday season and the very best for the new year.

True or false?

1. Money laundered through real estate must involve a large payment in cash.
2. Banks and financial institutions are best positioned to deal with money laundering.
3. Real estate professionals are part of the first line of defence for preventing proceeds of crime from entering real estate markets.

Check your answers below.

Whether you got all, some or none of these questions right, one thing is true: money laundering is a complex problem that affects everyone in BC, and as a real estate professional you can play an important role in keeping laundered money out of real estate. To make sure you’ve got the information you need, RECBC is introducing a new mandatory course for all real estate professionals in 2020: Anti-Money Laundering in Real Estate.

Real estate is a crucial industry in BC, and giving real estate professionals the tools to recognize and address the risks of money laundering in real estate transactions is one of the best ways to prevent illicit funds from entering the real estate market. That’s why this course will be a requirement for all real estate professionals.

In Anti-Money Laundering in Real Estate you will learn:

• to recognize the indicators associated with money laundering,
• the steps to reporting suspicious transactions, and
• how real estate is used in money laundering.

Most importantly, you’ll learn how to incorporate that knowledge into real actions that you can practice in your business. As a real estate professional, you are uniquely positioned to identify and report suspicious transactions because of your close working relationship with clients.

About the Course

Anti-Money Laundering in Real Estate is an online course that can be completed at your own pace over three days. Developed in collaboration with anti-money laundering experts, the course will be made available through the Real Estate Division at UBC. It is a mandatory continuing education course for all licensed real estate professionals in BC. We thank FINTRAC for their support in this project.

Course registration will open in January. Visit our Education pages to learn more.

To encourage all real estate professionals to register and complete Anti-Money Laundering in Real Estate as soon as possible, RECBC is offering reduced pricing for the first six months. See our Education pages for more information on course costs — or check out 5 Things to Know about Continuing Education in 2020 in this issue.

Advance Preview for Managing Brokers

Managing brokers will have an early opportunity to register for Anti-Money Laundering in Real Estate. Look for an email with an invitation to register, coming to you in early January.

Registration for all real estate professionals will open in mid-January. Follow RECBC on Facebook, Twitter or LinkedIn to be among the first to know when registration opens. All licensed professionals will receive an email with information on how to register.

Quiz Answers

1. False: Generally, the dirty cash has already entered the financial system and is transferred from buyer to seller electronically or by other means.
2. False: They have a large role to play, but so do real estate professionals and brokerages.
3. True: Real estate professionals who are engaged at the point of sale have a unique opportunity to identify and report suspicious transactions.

Learn more about the steps you can take to prevent laundered money from entering BC real estate markets in RECBC’s Anti-Money Laundering in Real Estate course.

Staying informed, up to date and knowledgeable are among the most important things you can do to help make sure that the consumers you work with are well-protected.

With that in mind, here’s our list of the top five things to know about mandatory continuing professional education from RECBC in the coming year.

1. You can save money by registering early in 2020 for the new Anti-Money Laundering in Real Estate course from RECBC

Registration for Anti-Money Laundering in Real Estate, our newest continuing professional education course, will open in early January.

Anti-Money Laundering in Real Estate will help real estate professionals understand why real estate is attractive to money launderers, risk signs and red flags to be aware of, and the steps to reporting suspicious transactions. It is an online course that you can complete at your own pace over three days.

Beginning April 1, 2020 you must have completed this course in order to renew your licence. But don’t wait until your renewal date is looming! Real estate professionals can play an important role in preventing the proceeds of crime from entering our real estate markets, and so we encourage you to complete the course as soon as possible. To make that easier, we’ve introduced special tiered pricing that is only available for a limited time:

Watch RECBC’s social media channels in January 2020 for more information about when registration will open, and check out our Education pages to learn more about this new course.

2. Legal Update will be an “Adventure”

Buckle up for a learning adventure in Legal Update 2020. In 2018 we introduced changes to Legal Update, including an online learning portion that you complete before coming to the classroom, and the feedback has been very positive. We’ve heard from real estate professionals and course instructors that when learners come to the classroom after spending time completing the online modules, they’re better prepared to take part in class discussions. The end result is a more interesting and interactive day and a better learning experience for everyone, leading to more competent licensees.

For 2020, we’re building on that success by introducing special content that you can take advantage of to learn more about the topics that are most important to you. Each module will have a learning adventure — a scenario that you can explore related to your area of practice. There will be scenarios for trading services, rental, strata, and special alerts for managing brokers, to give you options to tailor your learning experience to suit your needs.

Here’s a look ahead at the focus areas in Legal Update 2020:

• First Nations land;
• Due diligence and land title matters;
• Understanding real estate ownership;
• Contracts;
• Agency;
• Conflicts of interest; and
• Tax reminders.

To learn more about the Legal Update course, including how to register, see our Education pages.

3. Strata or Rental? You will now register for Legal Update with RECBC

Starting in 2020, strata and rental real estate professionals must register for Legal Update online with RECBC. Find all the information you need about courses, schedules and registration in our Education pages.

Your classroom sessions will continue to be offered at the same locations set up by the Professional Association of Managing Agents (PAMA) offices. And you can look forward to learning with experienced, familiar instructors who are well-prepared to deliver the 2020 course content.

4. Coming this spring: Ethics in Real Estate course

Ethics are the core foundation of the value real estate professionals offer to their clients. In the spring of 2020, RECBC will be launching a new mandatory course on ethics for all real estate professionals. You’ll learn why it is important to use ethical decision-making, and how the choices you make as a professional impact your clients, yourself, and the real estate industry as a whole.

The course aims to provide real estate professionals with the tools to develop good judgement and decision making skills. By being able to assess situations and take a measured approach, real estate professionals can assist their clients in assessing risks and making informed decisions on real estate transactions.

The new ethics course will combine online learning with a classroom component, similar to the format for the Legal Update course. The course is expected to launch April 1, 2020 and will become an ongoing mandatory requirement starting October 1, 2020.

5. Continuing education is part of your professional toolkit

Continuing professional education is a crucial component of any profession. As a real estate professional, you’re responsible for completing RECBC’s mandatory continuing professional education courses during your licence period. Don’t wait until renewal is on the horizon — by being proactive and completing your education early in your licensing period you’ll have more opportunity to use those new skills and knowledge for the benefit of your clients.

We strongly encourage all real estate professionals to take RECBC’s mandatory continuing professional education courses as soon as possible to reap the benefits of the increased knowledge and skills.

We are committed to ensuring that you have the education and resources you need to carry out your duties, comply with legislative requirements and provide professional real estate services to consumers. If you have questions about continuing education courses from RECBC, get in touch with our Education team at [email protected].

Need to renew your licence? Looking for guidance with a tricky professional issue? Or would you like to find information to share with clients about buying or selling a home in BC?

Whatever your need, we hope that RECBC’s website will be your go-to source in 2020. We’re redesigning our site to give real estate professionals and consumers an easy to search, easy to read source of accurate, up-to-date information. The new RECBC website will be launching in early 2020.

The updated site will include changes to navigation to give you a better, more consistent experience on both mobile and desktop. We’re improving the site structure so you will be able to more easily find what you are looking for. And there’s a whole host of small but important changes coming that will make using the RECBC website easier, more informative, and more enjoyable.

To bring the information on our site for real estate professionals together in one easily searchable location, we’re creating a new, expanded Knowledge Base. In the Knowledge Base you’ll be able to find articles, videos, webinars, and practice guidance on topics that are important to your daily business — and you’ll be able to easily filter search results to find information that is relevant to the kind of real estate services you provide. Whether you’re licensed for strata management, rental property management, or trading services, you’ll be able to find the information you need, easily. There will be a specific section for the unique needs of managing brokers as well.

Curious? We can’t wait to share our new look, so please check out our beta homepage, here, and let us know what you think! Drop us a line at [email protected] and share your thoughts.

“Need an answer — look in the Professional Standards Manual.” For many years, the Professional Standards Manual has been the go-to source for real estate professionals to just about any real estate question. It has even been described as the “managing broker’s best friend.”

Managing brokers — get ready to meet your new best friend. We have embarked on a comprehensive review of the Professional Standards Manual, with the goal of making the advice clearer, shorter, and easier to read. We also want to make the information easier to search for online, and readily accessible on mobile devices as well as desktop.

Beginning in 2020 we will be introducing Practice Guidelines, which over time will replace the articles in the Professional Standards Manual as the definitive source of guidance on how to comply with your requirements under the Real Estate Services Act.

Each Practice Guideline will include the following sections:

• A purpose describing the guideline’s topic area.
• The sections of the Real Estate Services Act, Regulation, Rules or Bylaws that apply.
• Definitions of terms used in the guideline.
• Practice Guidance setting out considerations for compliance, risk management, and best practices.
• Key discipline decisions, linking to past cases that illustrate the potential impacts of non-compliance

Practice Guidelines will be carefully developed in close consultation with relevant subject matter experts and reviewed for accuracy prior to release. The practice guideline committee includes representatives from the Office of the Superintendent of Real Estate, external legal counsel and the Real Estate Division at UBC in addition to staff of RECBC, and we will consult with industry members through RECBC’s advisory groups as appropriate.

We will be publishing Practice Guidelines on the RECBC website as they are developed throughout 2020 and 2021.

For more information about Practice Guidelines, get in touch at [email protected], to speak to a Professional Standards Advisor.

RECBC has disciplined a number of real estate professionals this year for failing to make the disclosures required under the Homeowner Protection Act (HPA) when representing clients in the purchase or sale of an owner-built home. In this issue of Report from Council, we look at your responsibilities and what you need to do to comply with legislation in transactions involving owner-built homes.

Q: What are my responsibilities when working with clients to buy or sell owner-built homes?

A: It is your responsibility as a real estate professional to ensure you comply with the legislative requirements for owner-built homes. The following steps serve as a guide when dealing with an owner-built home:

Three Step Process to Verify Your Transaction is Legal

STEP 1: Search BC Housing’s New Homes Registry and find out if the home has a policy of home warranty insurance, or if it is built under an exemption, such as an Owner-Builder Authorization.

Before listing a property or assisting a client to make an offer on a new property, you must ensure that the home can be legally sold. A real estate professional may not accept a listing of a new home unless and until the owner has complied with the requirements of the HPA, specifically sections 20.1 and 22(1.1).

STEP 2: Advise owner-builder clients to file occupancy permit information promptly, so BC Housing can verify the information and provide an Owner-Builder Disclosure Notice (OBDN) well in advance of any offers for sale.

For sellers, if owner-builders sell their homes within the first 10 years of occupancy, they remain liable for any subsequent defects in the home during that 10-year period. According to Section 23 of the HPA, an owner-builder’s obligations under the statutory protection are similar to the obligations of a licensed residential builder under a policy of home warranty insurance.

A prudent real estate professional should advise the seller to seek independent professional advice with respect to his obligations under the HPA, and the conditions that must be met for listing and selling the property.

STEP 3: Ensure that any prospective buyers within the 10-year period receive an Owner Builder Disclosure Notice (OBDN) Insert the Receipt of Owner-Builder Disclosure Notice Clause into the Contract of Purchase and Sale to confirm that the buyer received the notice.

Selling an owner-built home without providing prospective purchasers with an Owner-Builder Disclosure Notice (OBDN) or selling within 12 months after receiving an occupancy permit are offences under HPA. You can check BC Housing’s New Homes Registry to determine whether a new home built under an Owner-Builder Authorization can be legally sold as having met the occupancy requirement.

Within the first 10 years after initial occupancy, the owner-builder or subsequent owner is required to provide an OBDN to prospective purchasers. The OBDN must be provided prior to entering into a purchase and sale agreement.

The OBDN informs the buyer:

• that the home was built under an “Owner-Builder Authorization” issued by BC Housing;
• when the 10-year period started; and
• if there is a voluntary policy of home warranty insurance in place.

To confirm that the buyer received the OBDN, insert the Receipt of Owner-Builder Disclosure Notice Clause into the Contract of Purchase and Sale.

If the home is not covered by third-party home warranty insurance, statutory protection is available to a potential buyer as per section 23 of the HPA. It becomes the new owner’s responsibility to deal with the owner-builder directly with regards to defects. Litigation may be the only remedy available when there is no third-party warranty insurance policy.

The Land Title Office advises BC Housing whenever the title of an owner-built home is transferred and BC Housing can pursue enforcement action if the sale is illegal. BC Housing and RECBC have an Information Sharing Agreement to share information to help each other effectively regulate their areas of responsibility.

More Information:

• Homeowner Protection Act Matters
• Regulatory Bulletin #5: Buying or Selling an Owner Built Home from BC Housing (Licensing and Consumer Services)
• New Home Registry at BC Housing (Licensing and Consumer Services)

Education is Every Professional’s Responsibility

As a managing broker, one of your responsibilities is to facilitate and encourage the real estate licensees at your brokerage to participate in training and professional development, as well as to provide assistance and guidance for licensees, employees and others in the brokerage.

While real estate professionals are ultimately responsible for ensuring they complete mandatory education, managing brokers can play an important role by promoting the value of continuing education.

RECBC’s continuing professional education requirements in 2020 will include Legal Update, Anti-Money Laundering in Real Estate, and a course in Ethics that will replace the Rule Changes: Agency and Disclosure course. By completing these mandatory continuing education courses early on in each licensing cycle, real estate professionals at your brokerage will ensure their knowledge is up-to-date and they have the skills they need to provide a high standard of service with real estate clients. That’s good for consumer protection — and good for business.

Practice Tip: Continuing education helps keep your knowledge up-to date and your skills sharp. Recommend that real estate professionals at your brokerage regularly take advantage of education opportunities offered by RECBC or by professional associations or other educational bodies -and don’t forget to go yourself!

Managing brokers should ensure that their expertise and education is at least as good as, if not better than, the real estate professionals they are responsible for. As a managing broker, you’re expected to assist, advise and direct real estate professionals, so make sure you’ve got the current information you need.

It is important for real estate professionals to continuously educate themselves about legislative or industry changes taking place that are relevant to the services they provide to their clients. Mandatory coursework is just one component of a professional’s continuing education. Workshops, seminars and conferences can all contribute to being a well-educated professional.

Another way to keep up-to-date is by reading this publication, Report from Council, and visiting our Knowledge Base to take advantage of the variety of resources (including videos, webinars and podcasts) for managing brokers and real estate professionals. We add new content frequently, so follow us on social media to make sure you stay current with updates and news.

We’re so proud to be named as one of the Best Workplaces™ Managed By Women by Great Place to Work®, a global authority that recognizes excellence in workplace cultures. The award is determined from employees and shows a high level of workforce engagement and satisfaction.

At RECBC, we’re committed to continuing to improve employment equity and building an organization based on the principles of diversity and inclusion, which reflect our organizational values and dedication to excellence. Visit our website to see a video of our CEO Erin Seeley sharing what it means to receive this distinction.

We’ve added new functionality to our online portal to make licence renewal a smoother and easier process for you:

Access and view receipts at your convenience. After you’ve paid your renewal fee, you’ll be able to see and print an instant receipt confirming the payment. In fact, you’ll be able to access your receipts for any payment transaction you’ve made to RECBC. This means no more waiting for mailed receipts, instead you can view your receipts on the spot. In addition, you have the option to access historical receipts.

Apply online for brokerage and branch renewals. Now managing brokers and directors can apply to renew a brokerage or branch licence online. It’s a convenient, fast and efficient way to renew.

For more information about renewing your licence, contact [email protected].

On October 1, 2019 we introduced revised versions of three consumer disclosure forms — the Disclosure of Representation in Trading Services, the Disclosure of Risks to Unrepresented Parties, and the Disclosure to Sellers of Expected Remuneration. Feedback about the revised forms has been positive, and many real estate professionals find the briefer, clearer consumer information useful in explaining the purpose of the forms to their clients.

A three-month transition period helped real estate professionals adapt to using the revised forms. That transition period ends on December 31. Beginning on January 1, real estate professionals must use only the revised forms for making disclosures to consumers.

Not sure if you have the correct forms? Visit our forms page or WEBForms to download the forms — now available in multiple languages — French, Simplified Chinese, Traditional Chinese, Persian and Punjabi.

Or use our Forms App, which provides an easy way to send signed copies of the forms to your client, yourself and your brokerage — all with one click! The Forms App now includes the recently introduced Disclosure for Residential Tenancies form.

For more information, be sure to check out our Guides to each form, which include step by step instructions along with useful FAQs outlining situations in which the disclosures must be made.

Are your clients buying or selling a home built before 1990? If so, remember to discuss the possibility that asbestos could be present in the home, and that renovations, repairs or demolition could release asbestos into the air, presenting a health hazard for anyone working or living on the property. According to WorkSafeBC, the most common way to be exposed to asbestos is by unsafe practices during demolition and renovations of homes and buildings.

As a real estate professional, you have a responsibility to be knowledgeable about health or environmental concerns associated with a property, like asbestos, and to ensure your clients are aware of the risks and have the information they need to make good decisions. Whether you are providing services to a buyer, a seller, a landlord or a strata corporation — if the property was constructed prior to 1990, it may contain asbestos and clients should be advised of the risks.

When you are representing buyers who are offering to purchase a property that may contain asbestos, review the Safety, Health and Environmental Disclosure Clauses, to ensure that you’ve included the appropriate clauses in the contract.

You can find updated information about asbestos in the Professional Standards Manual, along with other information on Health and Environmental Concerns to be aware of.

In the October issue of Report from Council, we published our article that reviewed real estate professionals’ obligations under BC’s Personal Information Protection Act (PIPA) when providing services on behalf of rental property owners.

Since then, we’ve heard from readers asking for clarification on this statement in the article: “Finding a tenant for a rental property is a real estate service that both rental property management licensees and trading services licensees can provide.” As a reminder, trading service licensees must ensure they only provide services that comply with their trading service licence when finding either property for their client to lease/rent or a tenant for their client’s property.

To understand the services you can provide with a rental property licence versus those that you can provide if you are licensed for trading services, check out our handy checklist: Who Can Act for Prospective Tenants? And for an in-depth exploration of the items on the checklist along with answers to a variety of questions related to rental property management services, watch our Rental and Trading Services webinar with Professional Standards Advisor Alex Longson.

Managing brokers — to help you explain the differences in licensing to real estate professionals at your brokerage, take advantage of this presentation suitable for use at an training or brokerage meeting.

To help you learn more about the people who work at RECBC, in upcoming issues of Report from Council, we will introduce you to a member of the RECBC team. In this issue, we’re featuring a profile of Marissa Chow, who is a Course Development Specialist.

Name: Marissa Chow

Title: Course Development Specialist

Department: Education

Year started working at RECBC: 2019

Tell us what you do at RECBC (in 30 words or less)?

I’m a Course Development Specialist at RECBC. I develop continuing education courses for real estate professionals.

What do you enjoy most about your role?

I enjoy taking written content and transforming that information into an engaging and interactive learning experience. I find it rewarding to connect with learners and know that I’m making a difference in their educational experience.

What would you like us to know about the RECBC Education courses you’re developing?

I’m excited to tell you that in the 2020 version of Legal Update a new element called Adventures is being added to the course. The idea with Adventures is that it allows you to apply what you’ve learned to case studies and scenarios. You can think about what you’d do in different situations and share your ideas and questions in the classroom. We believe this will encourage further discussions and expand on the learning experience.

Consumer Protection BC recently stressed the importance of reading contracts carefully when getting a home inspection. After investigations earlier this fall, the regulator found that up to half of all home inspector contracts contained clauses purporting to limit the liability of the home inspector, while omitting other required information.

As a real estate professional, you can help protect your clients by encouraging them to read the contract scope of work and know what’s included in their home inspection. Recommend that your clients:

• Obtain several quotes from licensed home inspectors;
• Ensure the proposed contract complies with section 12 of the Home Inspector Licensing Regulation; and
• Ensure the scope of work proposed by the home inspector includes any specific parts of the property that the client has concerns with.

A home inspection can help property buyers make better informed decisions about what is likely one of the biggest transactions of their lives. Find more information on property inspections, including clauses to include in the Contract of Purchase and Sale, in the Professional Standards Manual.

Our Working With A Strata Management Company Guide provides important information for strata councils on the role and responsibilities of strata management companies. We’ve recently updated the guide with expanded information on the kinds of disclosures that a strata management company must make, and when clients should expect to receive those disclosures. We’ve also included examples of common situations when a strata manager will need to make a disclosure to his or her clients, such as when receiving a referral fee for recommending a service provider, or receiving a benefit from placing funds with a financial institution. See the Required Disclosures by Strata Management Companies section of the guide to review the updated information.

The guide also provides more detail on steps that strata management companies and strata managers can take to avoid conflicts of interest. When there is a conflict of interest, it must be disclosed to help ensure that clients are fully informed and can make informed decisions. Common conflicts of interest include providing other licensed services and acting for multiple parties. See the Avoiding and Disclosing Conflicts of Interest section of the guide.

We recommend that strata management real estate professionals provide their clients with the Working With A Strata Management Company Guide to ensure they understand the services they will be receiving, and know what to expect as a client.

Consent Orders and Disciplinary Hearing Decisions

Trading Services (Sales)

• Russell James Churchill Buset Armstrong, Century 21 Executives Realty Ltd., Vernon
• Cheryl Chih Yu Kang, Sutton Group — West Coast Realty, West Vancouver

Rental Property Management

• Robert Tomislav Zivkovic, Associated Property Management (2001) Ltd., Kelowna,
• Dan Allan Patrick Lobsinger, Associated Property Management (2001) Ltd., Kelowna,
• Associated Property Management (2001) Ltd., Associated Property Management (2001) Ltd., Kelowna

Qualification Hearing Decisions

• Real estate professional, Vancouver