Report from Council Newsletter, October 2020

Published on 30 October, 2020
Professional reading computer
  • Real Estate Safety Measures During COVID-19

    professional man and woman wear masks while reviewing a document

    As the numbers of cases of COVID-19 continue to rise in BC, it is essential for real estate professionals to continue to exercise caution and ensure they follow all orders from the Public Health Officer when providing real estate services.

    RECBC monitors the guidance from the Provincial Health Office and makes updates to our materials for real estate professionals and brokerages as appropriate. We encourage you to frequently visit our COVID-19 and Real Estate Services pages to ensure you have the most current guidance. Real estate professionals should continue to use alternatives to in-person showings whenever possible, and take steps to limit the number of attendees at showings to ensure appropriate physical distancing. Explore the digital alternatives in-person showings and discuss these with your clients.

    Having an open and frank conversation at the outset of a relationship with your seller clients about the changes to real estate services as a result of the ongoing COVID-19 pandemic will help to ensure that clients are able to make informed decisions that are right for them.

    Discuss Risks with Clients

    Speak with your clients regarding safety protocols both as a seller or potential buyer. Ensure that you have your seller’s informed consent before scheduling any in-person showings.

    As the situation with COVID-19 can change rapidly, make sure that you check in with clients frequently to ensure they remain comfortable with the choices they have made regarding showings and safety practices, and to understand whether anyone residing at the property is feeling ill or has been in contact with someone with COVID-19.

    If you choose not to offer in-person showings, discuss the circumstances with your clients and the alternatives that you will provide.

    Planning and Holding Safe Showings

    When holding an in-person showing, ensure you take precautions to minimize risks. These include:

    • Planning ahead and preparing personal protective equipment needed for yourself, as well as any that you may provide to attendees
    • Limiting the number of individuals allowed into a home at one time based on the size of the property, to maintain physical distancing
    • Recording the name and contact information of individuals attending to support effective contact tracing, in the event an exposure takes place. This information cannot be used for marketing purposes (see Protecting Confidential Information in this article).
    • Maintaining a sanitary environment by ensuring high-touch surfaces are disinfected, and that interior doors are open and lights are on, to minimize touching.
    Protecting Confidential Information

    As a real estate professional, you must exercise strict confidentiality with any personal information you collect as a result of COVID-19 contact tracing.

    If you have access to personal information previously collected at an open house, showing, or other real estate services for the purpose of contact tracing, you have an obligation to keep this information confidential. That means any information collected for this purpose cannot be used for marketing or other real estate services. It should only be used for purposes for which it was collected: to provide to provincial health authorities in the event of an exposure.

    For more information about your obligations as a real estate professional and what’s protected under privacy legislation, read our Knowledge Base article Protection of Client Information.

  • You Asked Us: Is Listing Under Market Value a Problem?

    a ball scale balances money and a wooden house

    In this issue of the You Asked Us column we explore the concerns that potential buyers and buyers’ agents may express when a property is listed for sale under current market value.

    Question: My clients put in an offer on a property that was listed below market value. There were multiple offers, and my clients weren’t successful. Now they’re wondering why the sellers’ agent was able to list it at a price the owners had no intention of selling at. What should I tell them?

    Answer: It is important in this situation to remind your buyer clients that it is ultimately the property owner who determines the price at which they want to sell their property. Real estate professionals are obligated to act honestly and with reasonable care and skill in performing all assigned duties, including obeying all lawful instructions of the client.

    It is the real estate professional’s duty to provide clients with current, pertinent information such as recently sold comparable properties, and to advise them about marketing and pricing strategies along with the benefits and risks, but remember that sellers make the final decision on pricing and marketing strategy. This helps ensure clients are informed and empowered to set the best possible listing price for their home.

    Occasionally, RECBC hears from consumers who are concerned about properties being listed below market value as part of a pricing strategy to obtain multiple offers for the sale. These concerns may stem from the common perception that because businesses are often prohibited from selling a product for a price higher than what was advertised, it must also apply to real estate transactions.

    There is an exception in section 74.05(3) of the Competition Act which states that the section does not apply to the “sale of products by or on behalf of persons not in the business of selling those products”. Because it is the seller, and not the real estate professional who has the legal right to dispose of the product, and because sellers (other than developers who are bound by this section) are not in the business of selling homes, this exemption applies.

    As it relates to false and misleading advertising, the obligation under RESA does not extend to a seller’s right to determine the list price of their own property. This is no different than a seller’s right to list their property higher than the perceived market value, because they believe that a buyer may try to negotiate the list price down.

    It can be frustrating for buyer clients to place an offer, only to be outbid in a multiple offer situation. A real estate professional can help their buyer clients at the outset of the property search to understand various pricing strategies used by sellers. Armed with this information, buyers will know that some offers may end up in competition depending on the list price.

    Questions?

    RECBC’s Professional Standards Advisors regularly respond to questions and concerns raised by the public and real estate professionals. In September alone, RECBC Advisors received more than 850 calls and emails from consumers and real estate professionals. If you have a question on how to safely conduct real estate services and transactions during the pandemic, your duties to clients, or a concern you want to discuss as part of your duty to report misconduct, don’t hesitate to reach out by emailing [email protected]

  • woman in glasses smiles at computer while taking notes

    In this new article series, we will explore case studies drawn from RECBC disciplinary files and enforcement decisions, where real estate professionals were found to have contravened the Real Estate Services Act, Regulation or Rules. These case summaries are intended to help real estate professionals understand and avoid similar errors, and recognize the potential consequences of professional misconduct.

    Did you know that real estate professionals can be disciplined by RECBC for conduct that is unrelated to providing real estate services, including for conduct in their personal lives and outside the scope of their work?

    Under section 35(2) of the Real Estate Services Act (RESA), real estate professionals can be disciplined for “conduct unbecoming.” This includes conduct that:

    • is contrary to the best interests of the public,
    • undermines public confidence in the real estate industry, or
    • brings the real estate industry into disrepute.

    The scope of what constitutes conduct unbecoming is very broad and can capture a wide range of activities, including conduct that occurs outside work.

    As a licensed professional you are expected to act with professionalism, integrity, and honesty. Your actions and behavior on and off the job impact how the public views real estate professionals and also affects their confidence in the real estate industry.

    Case 1: The Mentor and the Forged Note

    A real estate professional who had been licensed for five years as a trading representative was a mentor to a prospective professional, the “trainee”, who was in the process of completing their real estate education. The trainee was late in submitting an assignment in the Applied Practice Course.

    The real estate professional assisted the trainee to create a forged doctor’s note to excuse the late submission of the assignment.

    The real estate professional’s actions were found to have undermined the public confidence in the real estate industry contrary to section 35(2)(b) of RESA. The real estate professional consented to discipline sanction that included a suspension, discipline penalty, completion of remedial education, and enhanced supervision conditions for a one-year period.

    Case Reference: Puri (Re), 2018 CanLII 108051 (BC REC)

    Case 2: The Falsified Mortgage Application

    A real estate professional was found to have committed conduct unbecoming when he submitted two applications for mortgages in his wife’s name and provided information to the bank that he and his wife both had significant deposits at two other banks when those deposits did not exist.

    As a result of the false information submitted by the real estate professional, the bank approved the mortgages and later found out that the deposits did not exist. The real estate professional admitted that the information he provided for the mortgage applications was false. This conduct was unrelated to the professional’s provision of real estate services; in fact, the mortgages were for a principal residence and an investment property.

    The real estate professional consented to a significant suspension as a sanction for his conduct.

    Case Reference: Singh Gill (Re), 2010 CanLII 26586 (BC REC)

    Case 3: Inappropriate and Unprofessional Communications

    A real estate professional was found to have engaged in multiple instances of conduct unbecoming over a period of three years. The conduct was related to his work as a licensed professional as well as outside the provision of real estate services, and included sending inappropriate and offensive communications of a sexual nature on different occasions to a female real estate professional at a different brokerage, his managing broker, and a female neighbor.

    In addition, while providing real estate services, he acted in an inappropriate and unprofessional manner by making comments that could be perceived as offensive, racial and sexual in nature, and by behaving in a manner that could be perceived as inappropriate, obnoxious, unwanted, harassing and offensive.

    The real estate professional, whose license had been surrendered at the time of the discipline order, consented to a discipline sanction that included a lengthy period for which he was prohibited to apply for relicensing.

    Case Reference: Parente (Re), 2018 CanLII 122721 (BC REC)

    Avoiding Conduct Unbecoming

    These examples illustrate the importance of recognizing that, as a professional, you are responsible for your conduct no matter where or when it occurs. Your conduct can shape how the public views real estate professionals and impact their confidence in the real estate industry.

    Avoiding conduct unbecoming requires you to consider your behavior and actions carefully and consistently, both in your professional and personal capacity.

    Disclaimer

    Consent orders and decisions referenced are included for illustrative and educational purposes only. Facts, misconduct, and sanctions will vary from case to case. Conduct beyond September 2016 is subject to significantly increased discipline penalties as set out in the current section 43 of the Real Estate Services Act. Consent orders and decisions referenced that relate to misconduct occurring pre-September 2016 should not be relied on for precedential value in respect of similar misconduct occurring post-September 2016.

    As a real estate professional you have a professional obligation to stay current with developments in the law. While RECBC has published this information as a starting point for your own enquiries, the information is not tailored to any given fact situation. Changes to the law, policies or different fact situations may affect this guidance. If you have legal questions, you should obtain legal advice.

    Cases Referenced

    Puri (Re), 2018 CanLII 108051 (BC REC)  — will open in a new tab

    Singh Gill (Re), 2010 CanLII 26586 (BC REC)  — will open in a new tab

    Parente (Re), 2018 CanLII 122721 (BC REC)  — will open in a new tab

  • 5 Tips for Licence Applications

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    Real estate professionals and their managing brokers are responsible for ensuring that all information on licence applications and renewals is true and complete. Incomplete applications can result in an otherwise unnecessary delay. False applications, meanwhile, can have much more serious consequences, such as licence suspension or cancellation.

    It is your responsibility to ensure accuracy and completeness, so double-check that application before submitting it, to ensure that all the required information is included. Here are 5 tips to help make sure your application doesn’t get held up because of missing or incorrect information.

    1. Pay special attention to common problem areas

    Signature — Is the application signed by both the real estate professional and the managing broker?

    Date — Does it have the correct date?

    Names – Does it use the applicant’s legal name?

    Licensing categories – Have you selected all the categories for which you want to be licensed?

    2. Include all required supporting documentation

    Some sections may require additional information or supporting documents, such as a permanent resident card, demonstrated proficiency in English, or employment details.

    If a real estate professional has answered “Yes” to any questions in the “Information Respecting Reputation and Suitability” section of their application, they must attach additional information.

    3. Ask about other employment.

    Has the applicant indicated that they have other employment? If so, ensure that all the information about the other employer is completed in full. Have a conversation with the applicant if their other employment seems to relate to unlicensed real estate activity, such as working for a development company.

    A real estate professional cannot be licensed with a brokerage and also be engaged directly by a developer. Section 7 of RESA, which requires real estate professionals to receive remuneration for providing real estate services only from their related brokerage, also prevents a professional from receiving remuneration from a developer while being licensed to a brokerage.

    4. Ensure Continuing Education courses are complete.

    It is important to ensure real estate professionals have completed the required Continuing Education before approving a renewal application. As of October 1, 2020, real estate professionals must have completed Legal Update, Ethics for the Real Estate Professional, and Anti-Money Laundering in Real Estate.

    5. Double Check Before Signing

    Before signing a real estate professional’s application, managing brokers must review all the information on the form. Is there anything missing?

    Taking the time to double-check everything is significantly less than the delay which may result from incorrect or missing information.
  • Education Updates

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    Ethics Course Now Mandatory

    RECBC’s newest continuing education offering, Ethics for the Real Estate Professional, became mandatory for relicensing on October 1, 2020.

    As professionals who deal with members of the public and assist them with some of the most important transactions of their lives, real estate professionals frequently face ethical dilemmas in the course of their work. Sometimes there may not be a clear “right” or “wrong” answer. Deciding on a course of action requires that you consider your professional obligations, the best interests of your clients and the public, and your duty to act honestly and with reasonable care and skill. Using examples drawn from actual real estate situations, Ethics for the Real Estate Professional presents an ethical decision-making framework to guide you in resolving ethical dilemmas in the best interests of your clients.

    Learn more about this course, along with other continuing education course requirements, on RECBC’s Continuing Education pages.

    Find Continuing Education Results Online

    As part of RECBC’s ongoing work to increase the efficiency of the licensing and renewal processes, we have now made continuing education course completion data available in our secure online portal  — will open in a new tab.

    This means real estate professionals are no longer required to upload proof of course completion for continuing education when submitting a renewal application.

    Before submitting a renewal application, real estate professionals are advised to log into the portal to confirm they have completed all required continuing education courses. Any incomplete or incorrect information on a licensing application will lead to a delay in processing.

    Managing brokers who are reviewing and approving licence renewal applications for real estate professionals will find the continuing education course completion data displayed in the online renewal. Please check carefully to confirm that all requirements have been completed before signing the application.

    Questions? Please contact RECBC’s Licensing Department if you require more information about this change to renewal applications or about verifying course completion data online in our secure portal. You can reach us at [email protected], or by phone at 604.683.9664.

    Legal Update Goes Virtual

    If you have taken a Legal Update course in the past several months, you’ll know that the delivery of the course has undergone some changes. Like other students across the world, learners in the classroom portion of Legal Update course now participate virtually, through Zoom. As of October 1, 2020 RECBC has taken on responsibility for administering these virtual classroom sessions and providing technical support to learners.

    Transitioning to virtual classroom sessions has a number of advantages. For real estate professionals, it means that there are more courses available, regardless of where you are located in the province: no more waiting for an in-class offering near you. Virtual classrooms also eliminate the need to travel for many participants, which can be a significant challenge in the winter months in some areas. This change will also allow for smaller classes of 30 participants, meaning better opportunities for questions and participation. There will also be regular course offerings specifically for managing brokers.

    While instruction in the virtual classroom sessions continues to be delivered by the many experienced and qualified instructors familiar to learners across the province, RECBC education staff are now providing the behind-the-scenes services including registration assistance, technical support, and trouble-shooting.

    Looking ahead, we are designing Legal Update 2021 with leading best practices for virtual classroom delivery, to further enhance the experience for all of our learners. With continued uncertainty in the future regarding COVID-19, we are pleased to be able to provide virtual classroom delivery to ensure real estate professionals have access to the education they need to deliver competent, high quality real estate services to consumers.

    If you have any questions, please feel free to contact us at [email protected].

  • Increasing Audit Outreach to Brokerages

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    Over the spring and early summer of 2020, RECBC’s auditors deferred regular in-person brokerage audits due to restrictions on travel and to minimize the risks of transmission of COVID-19. However, recognizing that the pandemic introduced new challenges and risks to brokerage operations, our auditors launched a virtual outreach program designed to increase connections with brokerages during this unprecedented crisis.

    Over 4 months, RECBC’s auditors engaged in conversations with more than 350 managing brokers, to discuss the procedures and protocols they were putting in place to ensure operations were maintained safely and any risks the brokerage was facing. Generally, we found that brokerages were successfully able to adapt to the challenges of the COVID-19 pandemic. While many brokerages closed their doors temporarily, in most cases staff and professionals were able to work remotely while maintaining the brokerage operations.

    As brokerages have re-opened within the guidelines of the health authority, RECBC has resumed audit operations. When an RECBC auditor contacts your brokerage, they will explain how an audit can be safely conducted and make arrangements for a virtual or in-person audit, depending on the situation.

    We appreciate that it is still not “business as usual”, however the responsibility to ensure the integrity of public trust funds remains. When an RECBC auditor must visit a brokerage in person, we will take the necessary precautions to ensure all health guidelines are followed.

    Should you have any questions about RECBC’s audit program, please contact [email protected] or visit the Audit Program information online for further information.

  • Virtual Hearing Procedures

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    During the COVID-19 pandemic, to facilitate the just, effective and efficient determination of disciplinary, qualification and Special Compensation Fund proceedings, all proceedings currently scheduled and to be scheduled will be heard by audio or video conference, or will be conducted in writing.

    We have determined that in-person proceedings will not be necessary or appropriate in all cases and it will be desirable to provide alternative proceedings formats, to address convenience, cost and efficiency.

    To learn more about the changes to RECBC hearing procedures, review the Virtual Hearing Procedures, now published on the Hearings page.

  • New Interactive Guide Content – Animated Scenario for Dealing with Conflicts of Interest Between Clients

    animated gif of dealing with conflicts of interest

    We’ve added a new way for you to interact with our guides. You can now choose to explore an animated scenario to help you use the Dealing with Conflicts of Interest Between Clients flow diagram when dealing with conflicts of interest. You’ll get to use the flow diagram in the context of a practical situation to better illustrate some of the considerations and factors that might be at play when dealing with conflicts of interest.You can find the interactive scenario in the Exploring the Dealing with Conflicts of Interest Between Clients Flow Diagram module within these two guides on our website:

    Guide to Agreement Regarding Conflict of Interest Between Clients Form Section: Dealing with a Conflict

    Guide to Disclosure of Risks Associated with Dual Agency Form Section: Making the Disclosure

  • Decisions

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

    Trading Services (Sales)