We’re Listening: RECBC Evaluation of New Rules Underway
On June 15, 2018, the Superintendent of Real Estate’s agency and disclosure rules came into effect.
These rules protect consumers by:
- prohibiting limited dual agency in almost all cases, and
- requiring new disclosures about commissions, services to expect from a licensee, the risks of being an unrepresented party in a real estate transaction, and managing conflicts of interest between clients.
These agency and disclosure rules are intended to ensure that consumers receive better information to make informed decisions, and that licensees act with undivided loyalty in their clients’ best interests.
The Superintendent of Real Estate directed RECBC to prepare a report on the first 90 days of the implementation of the agency and disclosure rules. Throughout August and September 2018, Executive Officer Erin Seeley and senior staff met with groups of managing brokers to gather industry input for the report. At roundtable meetings held in each board region, they engaged in active dialogue with managing brokers – discussing the effects of the new rules, listening to the experiences and perspectives of managing brokers on the implementation of the rules, and to the feedback on the new disclosure forms.
Later this fall, we will also be soliciting your input through an online survey. You can expect to receive a link to a survey asking you for your thoughts about the new rules in November. All the input gathered will help shape our report and may influence how future changes are introduced and implemented.
Key themes that have emerged during the workshops with managing brokers include:
The importance of education
Managing brokers who have taken the Rule Changes: Agency and Disclosure course – and ensured their licensees take the course – report that as a result they felt better prepared to implement changes in their brokerage.
All trading services and rental property management licensees must complete the course before renewing their licence. We strongly encourage you to complete the course as soon as possible. It is the best way to make sure you are providing knowledgeable, competent services to your clients that comply with the new requirements.
Training and support
Managing brokers reported finding the information and resources from RECBC useful in training licensees at their brokerages about how to comply with the rules. Many suggested additional topics to cover, and asked for more resources, in different formats. Videos, PowerPoints and recorded presentations that managing brokers can use in their brokerages were among the resources requested.
You also told us that you’d like us to focus more on the positive benefits of compliance and less on substantive risk. We’ve listened to your feedback and we’ll be incorporating it into our planning for new communications tools and approaches in 2019.
Changes to the forms
We received many suggestions for making the forms shorter, faster to complete, and easier to explain to consumers. We are carefully considering all the feedback we’ve heard, and plan to develop updated versions of the forms that will be introduced in 2019. As part of the process of developing the updated forms, we will be conducting additional testing and consultation with licensees and consumers.
We will also develop and introduce new specialized versions of the disclosure forms that better meet the needs of licensed rental property managers and rental consumers.
Challenges and unintended consequences
Managing brokers, particularly in smaller communities and rural areas reported a rise in the numbers of unrepresented buyers. While this has not been supported yet by data, it is a potential consequence that we take seriously.
Additionally, managing brokers reported that the rules changes have added substantially to the administrative burden of managing a brokerage and introduced practical challenges to providing real estate services in communities with limited numbers of licensees. We also heard from commercial managing brokers that the disclosure and dual agency rules do not reflect their longstanding business practices.
As we evaluate the effects of the changes to agency and disclosure requirements in the post-implementation period, it is both useful and important to reflect on the intent of these rules. Above all, the rules were developed to foster a more professional and ethical real estate industry in BC, with better protection for consumers. The changes to the rules regarding agency have resulted in a renewed focus on every licensee’s fundamental duties to clients: undivided loyalty, confidentiality and the avoidance of conflicts of interests.