The Real Estate Council of BC has launched an investigation and put conditions on the licence of a Real Estate brokerage in the center of the latest Globe and Mail investigation.
In a release, the Real Estate Council says it has met with New Coast Realty and its lawyer after obtaining an audio recording of a training session at the brokerage.
As a result the Council says it has imposed seven conditions including appointing a managing broker of New Coast Realty that is approved by the council.
This new managing broker is the only person who can now conduct training sessions at New Coast Realty.
The firm must also turn over all records relating to commission bonuses, and the assigning contracts dubbed shadow flipping.
Deputy Executive director Larry Buttress says New Coast Realty will be subject to council-appointed brokers who will oversee every aspect of their work.
He adds, though, the firm can’t be shut down.
“There is a significant number of buyers and sellers with transactions in progress at this brokerage and those consumers have got contractual obligations that they must meet and the council certainly does not want to impede those transactions. We believe the conditions that have been agreed to with the brokerage will ensure that those transactions are able to proceed and that the appropriate control and oversight will be in place.”
Buttress, however, does say New Coast Realty will be under the microscope of a council-appointed managing broker.
“There is a laundry list of reporting that we are going to be expecting from these managing brokers. This laundry list of reporting goes far beyond what we would normally ask a brokerage to be doing. It is the types of issues that have been identified over the last several months in the market place that are of concern to the public.”
In an audio recording the firm’s owner Ze Yu Wu is heard telling his realtors to convince people to sell low so the firm can make big profits and commissions on flipping the property.
Kathy Tomlinson’s latest investigation paints a picture of murky practices at the firm that include convincing people to sell low in order for the firm to pocket higher flipped sales and bonuses.
Too little, too late?
NDP MLA David Eby, however, says the Real Estate Council of BC knew about the potential shady practices and failed to act sooner.
“New Coast Realty has been the centre of allegations in the press for more than a month. I just don’t understand why the Real Estate Council of BC is taking so long to deal with this firm.”
The housing critic adds that this just goes to show there may not be just bad apple realtors in the market, but…
“…And including allegedly entire firms now that seem to be operating as if there were no rules or whatever, and it appears they’re right. There don’t appear to be any consequences for breaking the rules, there don’t appear to be any consequences for fraud.”
He calls the licence conditions a minimal move, adding there needs to be even stiffer penalties for realtors and firms breaking the rules.
“I think if you’re a realtor and you’re frauding your clients, you should lose your licence and it should be as simple as that. When you have information and allegations about a firm engaging in this kind of conduct, I think the Real Estate Council should seriously suspend licences until they can get a handle on what’s happening. Because clearly things are getting out of control.”
Former agents of New Coast Realty have also told The Globe and Mail their former firm has been withholding commissions from the sales of luxury homes, alleging the company owes as much as $45-thousand dollars.
Eby says it wouldn’t surprise him if the independent advisory group finds realtors shouldn’t be allowed to regulate themselves.