VANCOUVER – A panel struck to restore faith in British Columbia’s besieged real estate industry is calling for hefty fines of up to $500,000 for misconduct and measures to end aggressive sales tactics.
The advisory group was launched by the Real Estate Council of B.C. in February amid allegations that some agents were deceiving clients to rack up commissions and inflate prices in Metro Vancouver’s overheated housing market.
The panel released a sweeping report on Tuesday with 28 recommendations, including that the province hike maximum misconduct fines to $250,000 for individual Realtors and $500,000 for brokerages — a significant increase from current maximum fines of $10,000 and $20,000.
Carolyn Rogers, the superintendent of real estate, chaired the advisory group. She said it didn’t examine affordability, but skyrocketing prices have impacted the council’s role as a regulator and the recommendations addressed that issue.
“Any time there is extreme price fluctuation, you have people who rush into the market who try and make a quick buck,” she told a news conference.
“The regulatory regime for real estate services was designed for people who buy and sell homes, not people who are buying and selling investments. That is a different market. It requires different regulatory rules, approaches and powers.”
The real estate council is the industry-funded body that oversees licensed agents. It’s made up of 14 industry members and three government appointees, but the panel recommended the portion of non-industry members be increased to 50 per cent.
The panel also called for a ban on agents representing buyers and sellers in the same transaction, for any profits received from misconduct to be returned to the client, and for a confidential whistleblower hotline.
Rogers said the panel often began meetings by discussing predatory sales tactics they had seen, such as Realtors approaching homeowners on their property. It recommended council increase efforts to end marketing practices that target vulnerable people, particularly seniors and immigrants.
Executive officer Robert Fawcett said the council has established a committee to implement the 21 recommendations that were directed to it.
“For many British Columbians, buying or selling a home is the biggest financial transaction they will make in their lives,” he said. “They count on real estate professionals to provide them with the information, guidance and advice they can trust.”
The province is responsible for the remaining seven recommendations. Finance Minister Michael de Jong said actions to strengthen consumer protection would be announced Wednesday.
“The report is a comprehensive examination of the practices and challenges plaguing the real estate industry right now, and paints a troubling picture,” he said.
The panel also examined the role of the province’s 11 private real estate boards. The overlapping functions of the boards and the council have caused public confusion, and the council should take sole responsibility for investigating misconduct, the report said.
Dan Morrison, president of the Real Estate Board of Greater Vancouver, said he welcomed all the recommendations, especially the opportunity to clarify the role of the boards.
“The differences between what we do as a real estate board and what the council does — the better job we can do of making that clear to everybody, the better off we’ll both be.”
The advisory group didn’t consider the issue of self-regulation. Rogers said the decision to take away self-regulation rests with the province, but she’s confident the recommendations will create a more independent council.
David Eby, the provincial NDP’s housing critic, called the document an “incredibly damning” report into a failed regulator and demanded an end to self-regulation of the industry.
“When you add it all together, it is no surprise that they have recommended the near wholesale replacement of the board,” he said. “I am surprised that they didn’t come to the inevitable conclusion, which is that self-regulation has failed here.”
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