“Self-regulation is very much a privilege,” Christy Clark said at a press conference in Vancouver this morning (June 29). “The real-estate sector has had 10 years to get it right on self-regulation, and they haven’t. And so we are going to end the right of the real-estate sector to self-regulate.”
In B.C., home and property sales are policed by the Real Estate Council of B.C. (RECBC), an organization composed of the same real-estate agents that it is supposed to regulate.
Clark said the RECBC is losing that authority. Instead, the government is creating a role for a “dedicated superintendent of real estate”.
“Someone who will not be distracted by other duties, who will have the authority to do what is necessary to increase public confidence in the real-estate sector,” Clark explained. “That will include transferring all authority from regulation for penalties and rule making away from the real-estate council and put it directly in the hands of the superintendent.”
The government’s superintendent will have the power to take commissions away from agents found to have committed malpractice.
In addition, Clark said fines for real-estate agents who break the rules would “dramatically increase”, up to as much as $250,000 for individuals and $500,000 for brokerages.
The government announced it will also streamline a complaints process for the industry and establish a phone line where members of the public can file grievances.
Finally, B.C. real-estate agents will no longer be allowed to represent both a buyer and a seller in home and property transactions.
The province’s announcement was made in response to a June 28 report on B.C.’s real-estate sector that details a wide range of abuses and misconduct within the industry.
The independent panel found that some agents were failing to represent the best interests of their clients, not complying with provincial and federal tax laws and anti-money-laundering regulations, and engaging in contract assignments for personal gain (commonly known as shadow flipping).
That document includes 28 recommendations for reforms.
“Alleged misconduct, combined with the perception that the Real Estate Council is unable or unwilling to take strong action to address it, has resulted in a loss of public trust,” it reads.”
B.C. finance minister Mike de Jong spoke alongside the premier this morning.
“At a time when home prices have been rising at an unprecedented rate, it is fundamentally important that when people seek professional guidance in the purchase or sale of a home that they can have confidence that their realtor is acting ethically and in their best interest,” he said.
According to the Real Estate Board of Greater Vancouver (REBGV), over the past three years the benchmark price for all residential properties in the region it describes as Greater Vancouver increased by 48.3 percent. As of May 2016, the benchmark price for a single-family detached home on the city’s East side was $1.46 million. On the West side, the benchmark price was $3.44 million.
Shortly before the government’s press conference, B.C. NDP leader John Horgan and Point Grey MLA David Eby held an event of their own.
Horgan spoke of a need to address the role of foreign investment in Vancouver real estate, a subject that was not discussed at the premier’s press conference.
“We’ve already done the first step with our private-members bill on taxing speculation,” he explained. “Making it less appealing to speculative investors to come to the Lower Mainland, to just drop down their money as if it was a safety-deposit box, not a place for people to put down roots, establish themselves, raise their families, and participate in the economy.”
Horgan also called for the province to work with federal regulators to curb money laundering in the real-estate sector.