Premier Christy Clark announced Wednesday that she’s scrapping self-regulation of the real estate industry in order to better protect the public from shady operators.
“The real estate sector has had 10 years to get it right on self-regulation and they haven’t,” she said.
The responsibility for investigating complaints, imposing penalties and regulating the industry will be stripped from the B.C. Real Estate Council and transferred to a new dedicated superintendent of real estate.
Clark said the government posted the superintendent’s job Wednesday. The successful candidate “will not be distracted by other duties” and “will have the authority to do what is necessary to increase public confidence in the real estate sector,” she said.
The move follows the release of a report Tuesday by an independent advisory group examining shady practices in the real estate industry.
Finance Minister Mike de Jong said the “troubling” report showed that self-regulation failed to meet the standard that the government expects to protect the public interest.
“At a time when home prices have risen 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,” de Jong said.
Clark pledged to act on the recommendations in a report by:
• ending dual-agency transaction where one agent represents both sides in a real estate deal
• increasing fines to a maximum of $250,000 for individuals and $500,00 for brokerage firms
• allowing the new superintendent to seize commissions from those found guilty of breaking the rules
• making it easier for the public to complain about shady practices
• remaking the Real Estate Council with a majority of non-industry members
Clark, who promised more action in the coming weeks, said the measures will better protect the public as well as the reputations of the vast majority of “honest, hardworking” realtors.
Mike Nugent, president of the Victoria Real Estate Board, said it is difficult to evaluate the impact of the new regulatory system because little is known about it yet.
“We actually don’t know what it will mean to us in our everyday practice.”
A few realtors “did some things that none of us are pleased with,” he said. “Our realtors at the Victoria Real Estate Board don’t like that, they are always looking to have high standards. So I think in that sense we are supportive of anything that helps the industry do better.”
Real estate agent Tony Joe, of Tony Joe and Associates with Re/Max Camosun, said, “I don’t think it is going to have any immediate impact on us as professionals ... I can’t help but think this will be a good thing for the professionals in the industry.”
Victoria hasn’t seen the poor practices, such as shadow flipping, that we’ve heard about in Vancouver, he said.
Tsur Somerville, associate professor with the University of B.C.’s Centre for Urban Economics and Real Estate, said he would rather have seen the council’s response to the report, with oversight, rather than the creation of a new entity to regulate the sector.
“Because there are advantages to having an entity that has connections in the industry, that has people on it, who have worked in the industry,” he said. “There are negatives in the sense that you worry about their relationships. But there are positives because of those relationships too and they have an understanding of what’s going on.”
Somerville said the key is to be aggressive about taking on the report’s recommendations.
“I’m more concerned that the things get enacted, than I am about who does it,” he said. “Keep your eye on the ball, not who’s swinging.”
Clark promised more action in the coming weeks to increase housing supply, support first-time homebuyers, and expand rental supply.
Earlier in the day, NDP Leader John Horgan called for a multi-agency group to investigate money laundering and fraud in the real estate market. He also called for a tax on speculators and measures to protect renters from renovations being used as an excuse to evict them.
