Report from Council Newsletter, February 2018

This month marked two important milestones for the Real Estate Council of BC: the publication of our first Service Plan and our Strategic Plan with a renewed vision and guiding values for our organization. Together, these plans build a strong foundation for the work we will undertake over the coming years to protect consumers of real estate related services. They reflect our transition to a Crown agency committed to protection of the public, with all Council members appointed by and accountable to the provincial government.

The development of our Strategic Plan would not have been possible without the participation of many industry and non-industry stakeholders who provided their perspectives on the issues ahead and their thoughts on how to enhance professional standards and consumer protection. I want to thank those of you who took the time to participate in consultations with us, either online or as part of our World Café last November, on the future of real estate regulation in BC: your input has been an integral part of our planning.

I encourage each of you to review the Service Plan and Strategic Plan. They outline the path ahead for the Real Estate Council, and the goals that will guide us. Over the next few years, in addition to our important daily work of educating, licensing, investigating and disciplining under the Real Estate Services Act, we will be focusing on achieving three interconnected goals:

• ensuring that consumers and real estate licensees have access to independent, accurate and relevant information,
• raising awareness of the Council as a trusted, consumer-focused regulator, and
• fostering a culture of service excellence at RECBC.

In our Service Plan you will see that we have also committed to implementing the recommendations of the Independent Advisory Group that fall under our jurisdiction. That includes placing a high priority on the transformation of licensing education. All licensees will have recently received an invitation to participate in an education survey. We want your input on how licensing education can be changed for the better. If you haven’t already completed the survey, please take a few minutes to answer it. You can find more information about the survey here.

Superintendent’s Rules Extended Deadline

Also this month, you will all have received notice that the Superintendent of Real Estate has delayed the implementation of new rules banning dual agency and increasing disclosures to consumers. These new rules were recommended in the IAG Report in 2016. The new date chosen by the Superintendent for them to become effective is June 15, 2018. Further changes to the rules are expected from the Superintendent during 2018 and you will have to watch for what those say and when they come into effect.

In this newsletter and in our weekly Real Advice e-news, you will find information about some of the educational resources that you can expect to receive over the next three months. We will continue to focus on providing education, discussion, information and guidance about the rules. It remains the responsibility of each licensee, however, to keep on top of any changes made to the rules, as soon as they come into effect. In these changing times, you must ensure that you meet professional standards and avoid conduct that could give rise to complaints and disciplinary proceedings.

In a message distributed to all licensees earlier this month, the Superintendent of Real Estate announced that the implementation date for new rules banning dual agency and increasing mandatory disclosures will be delayed until June 15, 2018. The additional time will give licensees and consumers more opportunity to learn about the upcoming changes and how they will affect real estate transactions.

The new rules will protect consumers by:

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

The Real Estate Council of BC is working with the Office of the Superintendent of Real Estate to ensure a successful implementation of new rules, and continuing to focus on the consumer protection goals that the rules are intended to achieve.

More Changes Ahead for BC’s Real Estate Industry

The Superintendent has also announced that he intends to publish further rules for consultation with industry and members of the public:

• A rule will be developed proposing that licensees receive continuing professional education when significant new rules changes are introduced. The first course established under this rule would be on the changes to agency and disclosure requirements coming into effect on June 15. The Council is already developing this course in consultation with the Real Estate Division at UBC.
• A rule will be developed to clarify the Superintendent’s intentions as to how licensees can manage conflicts of interest related to client representation.

The Superintendent will notify real estate licensees directly when the consultation period opens.

We encourage all licensees and interested members of the public to contribute their thoughts on the proposed rules by submitting comments to the Superintendent during the consultation period.

Education to Comply With the New Rules

As part of its mandate to provide industry education, the Council continues to develop and distribute information and educational resources to support licensees to comply with their legislative requirements.

Each week the Council shares information and guidance with all licensees about the new rules through our Real Advice e-news and our website. Check it out each week for resources and advice to support you in complying with the Superintendent of Real Estate’s new Rules.

Information and guidance on the Council’s website will be updated and may be revised as needed to reflect the intent and impacts of any new Superintendent’s rules.

The Council is Your Source for Information

The Real Estate Council is the only definitive information source on how to comply with the Superintendent’s rules. We encourage consumers and licensees to check the Council’s website regularly for updates.

At the Real Estate Council of BC, we are committed to safeguarding the public interest in the province’s real estate industry. We are strengthening our approach to regulation and enhancing our services for both licensees and consumers. To support these changes and to ensure we continue to provide the regulatory effectiveness the public and industry members expect, the Council will be increasing some of its licensing fees.

What is happening?

We are notifying you that the licensing fees are changing. The Real Estate Council of BC has approved the following fee changes that will take effect April 1, 2018.

• Application fee increase of $40 for first-time applicants, $20 for renewal, transfer and reinstatement applicants
• Licence assessment fee increase of $100

For a full listing of all fees and changes as of April 1, 2018, please review the Licensing Fee Tables.

Why are fees changing?

Licensing fees support the direct costs of regulating the real estate industry, including licensing, brokerage audits, complaint handling, investigations and discipline. Significantly higher volumes of complaints, investigations, and disciplinary hearings are contributing to an increase in the cost of the Council’s regulatory work. The 2018 fee increase will enable the Council to:

• continue to strengthen our regulatory approach to meet the public’s expectations and fulfill our public protection mandate,
• increase the effectiveness and efficiency of our services to licensees and consumers, and
• implement the recommendations of the Independent Advisory Group.

The Council recognizes that any fee increase has an impact on licensees. We work hard to provide cost-effective services, and we will continue to look for ways to enhance efficiency.

Learn More about Licensing Fees

To find out more about what your licensing fee covers and how fees will change in April, check out these resources on the Council’s website:

• Licensing Fees
• Fee Changes FAQ
• What’s Included in the Licensing Fee?

If you have questions about licensing fees, contact the Council at 604-683-9664, toll-free 1-877-683-9664, or by email at [email protected].

In its 2018 Budget, the provincial government announced a number of measures that will impact the real estate industry. Among the measures announced on February 20, 2018:

Changes to the Property Transfer Tax rate: the tax rate on residential properties above $3 million has increased from 3% to 5%, effective February 21, 2018.

Increase and Expansion of Additional Property Transfer Tax: also known as the foreign buyer tax, this tax applies to properties purchased by foreign nationals. Properties registered on or after February 21, 2018 are taxable at 20% of the fair market value, in the following areas:

• Capital Region District
• Fraser Valley Regional District
• Greater Vancouver Regional District
• Regional District of Central Okanagan
• Regional District of Nanaimo

Transitional rules apply to property transfers subject to written agreements dated on or before February 20, 2018 in the Capital, Fraser Valley, Central Okanagan and Nanaimo regional districts. Additional property transfer tax may not be required until May 18, 2018. For full information on the transitional rules see Additional Property Transfer Tax for Foreign Entities & Taxable Trustees.

Licensees should advise clients whose transactions may be affected by the changes to the Property Transfer Tax to seek independent professional advice.

Further Initiatives Planned for 2018

The Government also announced its intention to introduce initiatives to increase transparency in real estate markets, including:

• Speculation Tax: an annual tax on residential properties applied to property owners who do not pay income taxes in BC.
• Database of Pre-Sale Condo Assignments: accessible by federal and provincial tax authorities, the database will collect and report information on pre-sale condominium assignment.
• Beneficial Ownership Registry: a public registry to provide transparency on the true owners of properties.

Information on these and other budget measures is available in the government’s Budget Highlights.

In February 2018 the Council published its 2018-2021 Service Plan and Strategic Plan. The Service Plan outlines our goals and objectives for the next three years, and the performance measures we will use to track our progress towards achieving them. The service plan includes our financial plan and operating environment, and is updated each February.

The Council’s strategic plan works in parallel with our commitments to government, which are outlined in our Service Plan. It includes a renewed vision and key values that will guide work to regulate real estate licensees and protect consumers.

“Our mandate is to regulate the real estate industry in the public interest. This plan presents our vision for the future,” said Council Chair Robert Holmes. “I want to thank the many stakeholders and organizational partners who provided input on how to enhance consumer protection. Their participation was of great assistance to us during the process of developing this plan.”

“During our consultations with stakeholders, we were privileged to hear the thoughts and perspectives of many individuals, both industry and non-industry members, on the challenges and opportunities ahead for real estate regulation in BC. Their comments were an integral part of our development of goals and objectives for the next three years.”

The renewed vision and plan support the Council’s transition from a self-regulating body, to a Crown agency with Council members appointed by and accountable to the provincial government.

The Council’s vision for the future is of a province where real estate consumers have confidence in competent and ethical real estate professionals. Our strategic plan will support the realization of this vision, by focusing the Council’s resources to achieve its strategic goals and objectives.

As of January 23, 2018, the Council is no longer accepting and investigating prescreening applications from licensing candidates who are unsure about their eligibility for licensing.

Our recommendation to anyone who wants to become licensed but who is concerned about their eligibility (because of a prior or current criminal record, bankruptcy or insolvency, or other issues that could impact licensing eligibility), is to carefully review our Good Reputation Guidelines before submitting a licence application. After reading the Good Reputation Guidelines, if an applicant still has questions about their eligibility, they may wish to seek legal advice.

Applying for a Licence

When applying for a licence, applicants must provide a criminal record check with their application. Applicants must disclose any criminal convictions and charges in their application, including any conditional or absolute discharges. The Council also considers applicants’ general business and personal reputation. Depending upon the circumstances, a criminal record may or may not be a bar to licensing.

Qualification Hearings

When the Council has concerns about an applicant’s suitability, we may order a Qualification Hearing to determine if the individual can be licensed. The Hearing Committee may decide that:

• the applicant is not suitable for licensing,
• the applicant is suitable for licensing, or
• is suitable but requires conditions placed on the licence.

Licence conditions may include restricting the individual to a particular brokerage and requiring periodic reports from the managing broker, or other measures to ensure that the individual practices safely and under appropriate supervision.

Applicants who are found to be unsuitable for licensing will not receive a refund for course fees, hearing costs or other expenses relating to their application.

More information on applying to become licensed:

• Starting a Career in Real Estate
• Good Reputation Guidelines

Effective January 2018, the Council unveiled a revamped Legal Update 2018 course that features a blended format of online, self-paced learning and a one-day classroom session. The Legal Update 2018 course will give you more of the important regulatory information you need in order to comply with your legislated requirements and provide professional service to clients.

If you are unsure about which course you are required to take in order to renew your licence, review the Relicensing Education Program page on our website.

For further questions about registration, relicensing requirements or renewal applications, contact the Council’s education department via email, at [email protected].

Q: I am a real estate licensee, and I want to start offering appraisals as well. I’m going to work with an appraisal company that isn’t licensed under the Real Estate Services Act. Is this allowed?

A: No, you can’t work as an appraiser for another company while you are licensed to a brokerage. If you provide appraisals with an unlicensed company, you are violating the Real Estate Services Act (RESA) and you may find yourself being investigated and disciplined by the Council.

That’s because as a licensee, you can only receive payment for real estate services directly from the brokerage where you are licensed. And providing property appraisals is a real estate service.

Take a look at the definition of trading services in RESA — you’ll see that it includes these two lines:

• giving advice on the appropriate price for property, and/or
• making representations about the property.

Those two activities are what you will be doing as a property appraiser. As long as you are licensed under RESA, you can only provide real estate services, including appraisals, through your brokerage. Any payment for this work must come through your brokerage.

So, if you want to work as an appraiser while you are a licensed real estate professional, you should speak to your managing broker about providing this service through your brokerage.

Your other alternative would be to give up your real estate licence in order to focus on property appraisals. There is a specific exemption for professional appraisers in RESA, which means they do not have to be licensed in order to carry out these activities. But this exemption does not apply to individuals who are already licensed under RESA.

Do you have suggestions for future You Asked Us articles? Send your questions to [email protected].

Since the January 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)

• HEARING DECISION: Tracy Liane Goodwin
• APPEAL DECISION: Ahmet (Matt) Murat Kadioglu
• Vancouver Luxury Realty, Brokerage, Vancouver
• Ka Fung (Juliana) Ho, Representative, Royal Pacific Realty, Vancouver, and Baldev Singh Sandhu, Representative, Royal Pacific Realty, Vancouver
• Xin Bo (Angela) Guo, Angela Guo Personal Real Estate Corporation, Representative, RE/MAX Crest Realty, Richmond
• Tong (Tony) Li, Representative, Tony Li Personal Real Estate Corporation, New Coast Realty, Richmond