It was four months in the making but the hotly anticipated housing report by the Independent Advisory Group on real estate regulation has been released, with 28 recommendations.
The IAG, formed under the guidance of BC’s Superintendent of Real Estate, was created after public outcry about shadow flipping and shady realtor practices.
The recommendations focus on strengthening the Real Estate Council of BC’s current regulatory system, rather than proposing a new independent regulatory body.
Big new fines
The biggest change suggested is in the amount real estate agents have to pay if found guilty of misconduct.
The biggest change suggests realtors caught breaking the rules should face fines of up to $250,000, up from the current $10,000. A half million dollar fine is proposed for brokerage misconduct.
Along with fines, the report recommends that licensees be forced to give up any profits made from a fraudulent deal.
The report also tackles the controversial practice of “dual agency” where realtors represent both buyers and sellers in a single transaction, recommending a ban.
Licensees would also be banned from taking a financial interest in their own listing.
Additionally, the report calls for a tougher licensing process for new realtors, along with both centralizing the consumer complaint process and publishing findings.
It is also recommending a big change to the composition of the Real Estate Council itself, calling for at least half of the members be non-industry personnel. Currently 14 of the 17 positions are held by industry members.
The report comes in the heels of an unprecedented hot market in Metro Vancouver.
An “Implementation committee” will be announced in the coming weeks.
LISTEN: What Does The Real Estate Board of Greater Vancouver Think About The Newest Committee Report?
Finance Minister Mike de Jong released a statement this afternoon saying the report paints “a troubling picture” of the real estate industry.
He applauded the report as a “comprehensive examination of the practices and challenges plaguing the real estate industry right now,” and lauded its recommendations for addressing “all aspects” of the sector.
The government is expected to make an announcement on improving consumer protection in the market tomorrow.
But B.C. NDP Housing Critic David Eby says more should’ve been done.
“I think the consumers haven’t been protected, that we have a serious problem in the industry. And they came to these conclusions after just 15 weeks, without any resources that I’m aware of to do audits, forensic accounting, or the in depth review that I’d hope they’d be able to do”
He still hopes to see all of the recommendations implemented both by the provincial government and the Real Estate Council.
Meanwhile, a Realtor who says he was dumped from the Greater Vancouver Real Estate Board’s professional standards committee for calling out shady practices is cheering the report.
Keith Roy says he’s particularly heartened to see the complaints process centralized in one place under the Real Estate Council.
“One phone number you can call, you can launch complaints, trust it will be investigated, fines and discipline will be handed out accordingly, and then all of those decisions will be publicies. And right now only half of those decisions are made public and the other half are held in secret at the real estate board.”
Roy says he’s also pleased to see tougher licensing process for new realtors, which will pay off in the coming years.
All about execution
A Richmond man who says he fell victim to shady real estate practices is applauding proposed changes to tighten up regulation in the real estate industry
But Jim Davis, who says he lost out to shadow flipping, says the execution of the new rules will make all of the difference.
“For example, if I buy the house and hold onto it for a year and then sell it, are they going that as profits if I hold on to it for long time? What if I buy your house for example and I spend 50 thousand to renovate it and then sell it, would that count as shadow flipping?”
Davis filed a lawsuit back in May against the agent, his brokerage firm and the buyer which claims he is the victim of shadow flipping.