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Report from Council Newsletter, February 2020

Report from Council Newsletter, February 2020

Report from Council
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  • You may have noticed that over the past year or so, we’ve made a change in how we talk about the people we regulate. We refer to you as “real estate professionals”. That’s no accident. We want consumers in British Columbia to be aware that the person helping them to buy or sell their property, or to manage their rental or strata property, is a highly skilled and knowledgeable professional. And we want everyone licensed to provide real estate services in BC to understand what being a professional means, and to put professionalism front and centre in all of their daily business practices.

    Being a real estate professional means working in the best interest of your clients, as a trusted advisor helping them to make some of the biggest financial decisions of their lives. It means accepting the responsibility to ensure that you keep your knowledge and skills up to date with ongoing continuing education. And it means being an ambassador for the profession. Each and every real estate professional is a representative of the profession to the public, and the actions of each individual contribute to building public trust in the profession.

    As the regulator, RECBC has an important role to play in supporting and enhancing professionalism in the real estate sector. Here are a few of the initiatives we are working on to strengthen trust in the real estate profession.

    Continuing Education

    Earlier this year we introduced a new mandatory continuing education course: Anti-Money Laundering in Real Estate. We’re pleased to report that since January 2020, more that 7,000 people have registered for the course.

    Money laundering affects everyone in BC; it makes our communities less safe, it impacts the affordability of our housing, and everyone needs to do their part to stop it. As real estate professionals, you have an important role to play in keeping the proceeds of crime out of our real estate markets.

    The Anti-Money Laundering in Real Estate course will help you to identify the red flags for money laundering, and know the steps to take to report your concerns. If you haven’t registered yet, act fast! Special discounted pricing is now in effect, but on March 31 the cost of the course will increase.

    Later this spring we will be launching a further continuing education course, Ethics for the Real Estate Professional. With both an online and an in-class component, Ethics for the Real Estate Professional will be sure to deepen your understanding of professional ethics. You’ll learn to use new tools to support ethical decision making, and how to incorporate that decision making process into your daily business practices. You’ll find more information about this highly anticipated new course in this issue of Report from Council.

    Ongoing Engagement

    Building trust is an ongoing process. One of RECBC’s goals is to continue to increase engagement on all levels with real estate professionals. We know that continuing to engage in conversation with real estate professionals and managing brokers in the trading, rental and strata sectors is the most effective way for us to learn of emerging risks, changes to business practices and new developments in the industry. This allows us to be proactive and stay abreast of developing trends.

    Public Protection

    One of the key pillars of RECBC’s regulatory approach is to enforce strong and effective compliance and disciplinary measures to ensure that real estate consumers are protected. As the regulator for BC real estate, we are committed to upholding the highest standards of regulatory excellence. We know our efforts serve to promote confidence in the real estate market, and a strong marketplace is a benefit to all British Columbians.

  • Your resource for regulatory information and news is being redesigned to meet the needs of today’s real estate professionals and consumers. We’ve focused on providing you with a better user experience so that you can find the information you need, quickly and easily.

    You told us you wanted to find information faster, and we listened. We’re bringing all our key resources together in a new, highly searchable Knowledge Base. With one search you’ll find newsletter articles, practice guidance, clauses, webinars, fact sheets, videos — and you can filter your results by resource type, or by licence category. You’ll get the information you need, in the format you want.

    Better Mobile

    An online information resource is only truly great when you can use it easily on your phone or mobile device. And with the new RECBC site, that’s exactly what you will be able to do. Our new site is fully mobile, so you can get answers when you need them, wherever you are.

    New Guidance

    We’re revising the articles in the Professional Standards Manual (PSM) to ensure our practice guidance is clear, up to date, and easy to read. Over the coming months, we’ll be introducing new Practice Guidelines that will replace the advice in the PSM and become the definitive source of guidance on your requirements under the Real Estate Services Act, Regulation and Rules. All the Practice Guidelines will be searchable in the Knowledge Base.

    New Approach

    You’ll find our disciplinary decisions and hearings in a section called “Public Protection”, along with information about our audit processes and education initiatives. We think that’s an important change — because working to prevent issues from arising is an important part of our role to protect consumers.

    Whether you are looking for practice guidance, a continuing education course or information on how to renew your licence, the new RECBC website will be your go-to resource.

    Get ready — the site launches soon and we’re looking forward to hearing from you about the new look and feel. You can send your comments to [email protected].

  • Anti-Money Laundering in Real Estate

    In just two months since its introduction, more than 7,000 real estate professionals have already registered for RECBC’s Anti-Money Laundering in Real Estate course. The introductory price of $25 is available for just one month more, so act fast to reserve your spot. After March 31, the price of the course increases to $50.

    Anti-Money Laundering in Real Estate helps 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.

    Real estate professionals renewing their licence on or after April 1, 2020 must have completed Anti-Money Laundering in Real Estate. Visit our Education pages for full details and to register.

    The 2020 version of Legal Update launched in February and we can’t wait for you to dig into the new content in this year’s course. We’re continuing to introduce greater interactivity into the online portion of the course — this year in addition to the general content you’ll find special practice related “adventures” for each topic.

    In the classroom you will explore the content from a service specific perspective, so that professionals licensed for strata or rental property management have an opportunity to focus on the issues that are most relevant to their business.

    Coronavirus and Your Safety

    RECBC takes the safety and security of learners in our continuing education classes very seriously. As you will be aware, China and other countries around the world, including Canada, are working to contain the spread of the novel Coronavirus (COVID-19).

    If you have an upcoming Legal Update classroom session, and you believe you have come in contact with the Coronavirus and are ill, please contact RECBC’s education department to reschedule. You will not be charged or penalized for rescheduling a classroom session due to health concerns related to Coronavirus.

    To minimize the risk of infection in classroom sessions, RECBC is working to ensure that instructors receive reliable and up to date information on preventive measures.

    Ethics in Real Estate

    Coming this spring: a brand new mandatory continuing education course focusing on ethical decision making for real estate professionals: Ethics for the Real Estate Professional. Combining online learning with a half-day classroom session, this course will help you to increase your understanding of the importance of ethical decision-making in your work, and its impact on yourself, your clients and your profession.

    In Ethics for the Real Estate Professional, you’ll examine the role ethics plays in practice as it relates to honesty and integrity, duties to clients, conflicts of interest, disclosure, and the duty to report. You’ll learn new tools for assessing risks and making informed decisions.

    We’re also planning updates to the Applied Practice Course, and working with other real estate regulators across the country to develop national real estate competency profiles for real estate practitioners. These competency profiles will help us to align real estate education with the skills required to practice effectively and professionally.

    Visit our Education pages to keep up to date on the latest course offerings.

  • Manufactured homes are an important source of affordable housing in BC, and real estate professionals have a crucial role to play in helping buyers and sellers of these homes find the housing that best meets their needs. But just because a manufactured home may cost less than a traditional home doesn’t mean the transaction deserves any less care and attention. In fact, transactions involving manufactured homes can be complex and may require specialized knowledge.

    One example of the expertise that a real estate professional should bring to a manufactured home transaction is when that home is on rented or leased land — as in a manufactured home park. If the buyer wants to keep the home in the park and continue to rent the site that it sits on, the tenancy agreement for the site (or pad) should be assigned to the buyer. Assigning the tenancy agreement ensures the rent and the schedule of rent increases remains the same for the new tenant.

    If for some reason the assignment can’t take place, or the pad rental isn’t assigned properly, the buyer may face significant rent increases that could make the home unaffordable. Without an assignment, a buyer would need to agree to a new tenancy agreement with the landlord. This can result in an increase in the rent payable, and there is no restriction to how much that increase may be.

    The Manufactured Home Park Tenancy Regulation sets out the process for assigning and subletting manufactured home pad tenancy agreements. You can find an overview of the process, along with suggested clauses for use in the Contract of Purchase and Sale, in RECBC’s Manufactured Homes on Rented/Leased Pads.

    New Materials to Share with Clients

    The Residential Tenancy Branch has developed materials that real estate professionals can use to make sure they give accurate guidance to their clients on the legislative provisions for selling homes in manufactured home parks. In particular, their new information sheet, Assignment of Manufactured Home Site Tenancy Agreements, sets out specific guidance for the assignment process. It is a useful fact sheet to share with clients to help them understand the importance of assigning the manufactured home tenancy agreement. It also provides information about what to do if a landlord is unreasonably refusing to allow an assignment.

    As a real estate professional, you need to be aware of the special requirements of these transactions. You have a responsibility to work in the best interest of your clients and disclose all material information to them.

    An RECBC Professional Standards Advisor can help you find answers to questions about transactions involving manufactured homes. Contact them at [email protected].

    For further information about the assignment provisions under the Manufactured Home Park Tenancy Regulation, contact the Residential Tenancy Branch at [email protected] or by phone at 1-800-665-8779.

    See RECBC’s Resources on Manufactured Homes

    Further Information Sources for Manufactured Homes

  • A real estate lockbox can be a convenient tool when selling or renting out a property. Using a lockbox makes it easy to show properties to buyers and tenants when the seller or landlord is away or unavailable.

    But before using a lockbox, make sure that you are aware of the risks associated with them, and discuss those risks with your clients. In order to make an informed decision about whether to allow access to their property through a lockbox, your clients need to know both the potential risks and benefits.

    RECBC has developed a consumer fact sheet about lockboxes that you can share with your clients.

    As a real estate professional, you have a responsibility to act in the best interests of your clients and to provide conscientious and competent service. So discuss the pros and cons of using lockboxes with your clients, and make sure they understand the risks before snapping that lockbox onto the door!

    Risks of using a lockbox include:

    • A lockbox may be broken into to gain access to the property, which could result in theft or damage to the property;
    • An unauthorized person could use the lockbox to enter the property by gaining access to the code or breaking into the lockbox; and
    • Keys may be lost, or the lockbox may be improperly closed, allowing unauthorized access to the property.

    The loss of keys due to lockbox break-ins can result in significant costs, especially in stratas where multiple units may need to be re-keyed. In these situations, it is possible that a strata could choose to attribute the costs to the owner of the strata lot to which the lockbox relates, and pursue them for the financial loss. That’s not something you want to happen to your client!

    Minimize the risks when using lockboxes

    • Only provide a lockbox code to another licensed real estate professional, who must accompany any potential buyers or tenants viewing the property. Never give a lockbox code directly to a buyer or tenant.
    • Smart lockbox technology allows for identification of visitors to the property, the time and duration of the visit, and automatic code changes. These features may reduce risks to clients.
    • Make sure lockbox codes expire on a timely basis.
    • Advise your clients to speak with their insurer about whether their property insurance coverage may be affected by the installation of a lockbox.
    • If the property is in a strata, advise your clients to check with the strata manager before using a lockbox to be aware of any rules or bylaws that may affect the use of a lockbox.
    • If the lockbox is on a tenanted property, you must ensure that you have the permission of the tenant to use the lockbox.

    If your client is not comfortable with allowing access to their property through a lockbox, then you must be present at the property for any showings.

    Managing Broker Practice Tip:

    Does your brokerage have a policy and procedures to follow for the use of lockboxes? Developing brokerage policies and ensuring that licensees at your brokerage understand them and follow standard procedures is a great way to reduce the risk of complaints arising.

    Have questions about using lockboxes? RECBC’s Professional Standards Advisors are available to help. Contact them at [email protected].

  • Reframing the Role of Managing Brokers

    The Office of the Superintendent of Real Estate (OSRE), in collaboration with RECBC, and the Policy and Legislation Division of the Ministry of Finance is reviewing the role of managing brokers within BC’s real estate regulatory framework in light of changing business practices that are impacting the real estate industry and the role of managing brokers. Following in-person engagements with managing brokers around the province, OSRE released a discussion paper, Reframing the Role of Managing Brokers in BC, in fall 2019. The discussion paper comment period was open until January 15, 2020.

    OSRE received nearly 100 submissions, including 14 submissions from industry associations representing multiple professionals. Overall, there was positive support for the foundational measures suggested in the discussion paper, in particular for:

    • Raising Qualification Standards for Managing Brokers
    • Developing Best Practices and Resources for Managing Brokers
    • Developing Targeted Re-Licensing Education for Managing Brokers.

    More analysis and engagement will be required before any of the concepts from the discussion paper are implemented. OSRE staff members are continuing to review the feedback and will be preparing a consultation summary report for release later this spring.

    Thank you to all those that contributed valuable feedback in response to the discussion paper, for sharing your ideas and passion for the industry.

    Learn more about this multi-phase project at the website of the Office of the Superintendent of Real Estate.

    Dual Agency Exemption and Conflict Guidance in Development

    In response to feedback from real estate professionals, RECBC and OSRE are collaborating to provide guidance for the profession on how to appropriately manage conflicts of interest between multiple clients and the use of the dual agency exemption. The guidance will help real estate professionals determine if the dual agency exemption applies and how to act appropriately when working in a dual agency relationship.

    When conflicts of interest occur between current clients that cannot be addressed through dual agency, real estate professionals will need to address the conflict by either releasing both clients or by representing only one of the clients. Guidance is intended to help real estate professionals:

    • Be proactive in anticipating and avoiding conflicts of interest between clients
    • Consider what is in their clients’ best interests
    • Understand the risks of working with released clients as unrepresented parties
    • Understand if and when they can re-engage with a previously released client

    The updated guidance, along with streamlined versions of the Agreement Regarding Conflicts of Interest Between Clients and Disclosure of Risks Associated with Dual Agency forms, will be released later this spring.

    Practice Guidelines on Anti-Money Laundering

    Earlier this year RECBC released new Anti-Money Laundering Practice Guidelines. The new guidelines are intended to support the Anti-Money Laundering in Real Estate course, and will help real estate professionals to ensure they are complying with the requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

    There are four guidelines, each with specific considerations and recommendations to assist real estate professionals to comply with their obligations:

    • Identify warning signs for money laundering in real estate
    • Know Your client
    • Understand FINTRAC reporting requirements
    • Consider your professional and ethical obligations.

    The guidelines include guidance for managing brokers on setting up and maintaining a compliance regime within the brokerage.

    More guidelines will be released throughout the year, as RECBC continues to review and update the information previously in the Professional Standards Manual.

    Updates to Managing Broker Portal

    Managing brokers will now have new insights into the registered teams and team members at their brokerage. By logging into the RECBC Portal, managing brokers can now access a list of licensees at their brokerage that indicates whether each licensee is a member of a team, and the team name.

    To view the list, simply login to the portal and select the “My Licensees” option from the menu on the left side of the page. The licensee list will display the names of licensees, their licence numbers, and whether each licensee is a member of a registered team, has a personal real estate corporation, the level of their licence, and the expiry date of their current licence. You can export the list to an excel spreadsheet.

    Managing Broker Presentation Series

    Launching this spring, the new What Would You Do? Presentation Series will provide managing brokers with presentations to use at their brokerages to facilitate discussions around risk management. Each presentation will explore several case studies that relate to an area of risk in real estate practice and illustrate how real estate professionals can better identify and manage risk in this area.

    The presentation series is a joint collaboration between the BC Real Estate Association, RECBC and the Real Estate Errors and Omissions Insurance Corporation, to present a 360-degree look at risk management from the perspectives of the professional association, the regulator, and the insurer.

  • On February 6, RECBC suspended the real estate licences of managing broker Stephen Lam and brokerages Regent Park Pinnacle Realty of Vancouver and Coral Property Management of Richmond.

    Mr. Lam, Regent Park Pinnacle Realty and Coral Property Management are prohibited from providing real estate services to or on behalf of any member of the public. The suspensions remain in effect until further notice.

    Concerned clients of Regent Park Pinnacle Realty or Coral Property Management are encouraged to contact RECBC.

    Clients of Regent Park Pinnacle Realty can email us at [email protected].

    Clients of Coral Property Management can email us at [email protected].

    View the Orders

    Under the Real Estate Services Act, RECBC has the ability to order an emergency licence suspension and to freeze property in circumstances where the length of time to complete an investigation or hold a disciplinary hearing would be detrimental to the public interest.

  • On February 18, RECBC published its 2020/21 — 2022/2023 Service Plan and 2020 Mandate Letter. The service plan outlines our goals and objectives for the next three years, along with 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 Government uses Service Plans to guide direction of crown agencies such as RECBC and communicate government priorities to British Columbians. Service Plans explain each crown’s business and key outcomes the public can expect from the crown’s activities. RECBC is accountable to the Minister of Finance.

    In her Mandate Letter to RECBC, Minister of Finance Carol James identified the following priorities:

    • “Continue to work with the Superintendent of Real Estate, the Ministry of Finance Policy and Legislation Division, and the BC Financial Services Authority (BCFSA) to establish a single regulator of real estate licensees within the BCFSA.
    • Improve the time to disposition for the investigation of complaints against licensees, continue to reduce any backlog of complaints and process new licensee applications on a timely basis.
    • Work with the Superintendent of Real Estate and Ministry of Finance Policy and Legislation Division to address market conduct of licensees and support the Office of the Superintendent of Real Estate in ensuring rules are appropriately implemented, including specific attention to anti-money laundering and reporting suspicious transactions.
    • Work collaboratively with government as it improves the effectiveness of BC’s Anti-Money Laundering Regime.”

    Over the coming year we will be working hard to achieve these priorities and the other outcomes identified in the Service Plan.

    Thanks to a new agreement, RECBC and the Office of the Superintendent (OSRE) are now working together even more closely as BC’s regulators of real estate. RECBC and OSRE have signed a Memorandum of Understanding (MOU) establishing a process for RECBC to refer certain complaints of professional misconduct by real estate professionals to OSRE for investigation.

    Under the terms of the MOU, RECBC may refer complaints to OSRE for investigation where a real estate professional may have acted in a way that is seriously detrimental to the public interest.

    Sharing such complaints with our co-regulator is just one of the ways that RECBC is working to make sure that investigations are completed in a timely way, while ensuring that they remain thorough and fair. Here is what is NOT changing as a result of this agreement:

    No Change to Making a Complaint

    Consumers and real estate professionals should continue to send any complaints about potential misconduct to RECBC. Our website has detailed information on the steps to take for reporting a concern.

    No Changes to Discipline Processes

    RECBC will continue to be responsible for issuing notices of hearing and disciplinary decisions.

    Questions?

    If you have any questions about reporting a concern or investigation processes, please contact [email protected] to reach a Professional Standards Advisor.

    Have Your Say: Mortgage Brokers Act, Beneficial Ownership Registry

    The BC government is inviting feedback from the public on two consultations that are part of the efforts to combat money laundering, fraud and tax evasion in this province. Both consultations are open until mid-March.

    To increase the transparency of corporate entities, the government intends to create a public registry of corporate beneficial ownership. The registry was one of the recommendations of the Expert Panel on Money Laundering in BC Real Estate, which found that “Disclosure of beneficial ownership is the single most important measure that can be taken to combat money laundering.”

    The expert panel also recommended that BC “replace the Mortgage Broker Act with a modern regulatory statute that is effective in regulating all those in the business of mortgage lending”. The government has now opened a consultation on changes to the Mortgage Brokers Act.

    Consultation: Beneficial Ownership Registry for Private BC Businesses

    To participate, go to: https://engage.gov.bc.ca/govtogetherbc/consultation/corporate-beneficial-ownership-registry-consultation

    Consultation: Mortgage Brokers Act

    To participate, go to: https://www2.gov.bc.ca/gov/content?id=ACF4488B55894B8F9DDE09EB74456BBF

    Feedback for both consultations will be accepted until 4 p.m. on March 13, 2020.

    3 Questions for… Bruce McCoubrey, Professional Standards Advisor

    To help you learn more about the people who work at RECBC, we’re profiling a team member in each issue of Report from Council. This month, we feature Bruce McCoubrey, one of RECBC’s Professional Standards Advisors.

    Name: Bruce McCoubrey

    Title: Professional Standards Advisor

    Department: Licensing & Education

    Joined RECBC: 2018

    Tell us what you do at RECBC?

    I’m a Professional Standards Advisor, which means I provide information and answer questions about the standards of conduct required of real estate professionals by the Real Estate Services Act, Regulation, and Rules.

    What do you enjoy most about your role?

    I enjoy the incredible variety of questions I receive. My role requires plenty of critical thinking to help people solve problems by providing them with the information they need. I’m one of three Professionla Standards Advisors at RECBC and we consider ourselves very much as a resource for both real estate professionals and the public. No question is too big or too small. Don’t hesitate to call us.

    Do you have any tips for how people can get the most out of contacting the PSAs?

    Whatever your question might be, don’t forget to consult your managing broker first. And RECBC’s website has many valuable resources that you can consult. When calling us, it can be useful to take notes if the question is a complex one. And please bear in mind we cannot provide legal or contractual advice.

  • The following actions have been taken as a result of disciplinary hearings and Consent Orders conducted by RECBC.

    Trading Services (Sales)

    Rental Property Management Services