Thursday 8 February 2018

Real Estate Changes in BC

There are some major changes coming to BC real estate, and we believe the public should know what those changes are and how they came about. Following is information assembled by a taskforce in our Royal LePage Advance Realty office:

·         Real Estate in BC is governed by the Real Estate Council of BC (RECBC) for licensees and the Office of the Superintendent of Real Estate (OSRE) for consumers. The Rules are made by OSRE and guidance on carrying out those rules is provided by RECBC.

·         OSRE states: “A consultation on these rules was completed on October 6, 2017 after OSRE posted a draft version of the proposed rules for a 30 day public comment period on September 6, 2017. OSRE received strong support from the public on all proposed rules.”

·         According to the published report, only 169 members of the public answered the survey, along with 2,395 licensees. Of those 169 people, 66.9% were from the lower mainland.

·         On March 15, 2018 new and changed rules will come into effect.

·         Limited Dual Agency is being eliminated March 15, 2018.
The Superintendent has created a rule to prohibit the practice of dual agency. Dual agency is when a licensee represents two or more parties with competing interests in a trade in real estate, such as both buyer and seller, or two or more competing buyers.*

·         In explaining the new rules, RECBC has advised licensees that the elimination of Double Agency may create situations of ‘double recusal’ where a licensee will not be able to act on behalf of the seller or buyer if they are current clients, rather than only referring one client to another licensee.

·         A licensee will not be able to represent either party if a client buyer decides he wants to offer on a listing of that licensee
You should not continue to act for either client in this scenario. You should refer your buyer client and your seller client to get independent professional advice (i.e. another licensee). You cannot act for both clients in this scenario (even with their consent) because it would amount to dual agency, which is prohibited.*

·         The proposal to eliminate Dual Agency was voted on by only 131 members of the public (from the Province of BC) in the survey, and 81 people supported it.

·         Possible Scenarios
 1. Joe the buyer has been working with a real estate agent to look at properties in town, listed by several real estate agents, making Joe a client. Joe viewed 20 properties, 2 of them were listings of the agent he was working with. Joe decides he would like to make an offer on one of his agent’s listings. At that point, the agent must refer Joe to another agent AS WELL AS refer the seller to another agent.

2. Megan is interested in buying a recreational property, or a commercial property, and she knows, based on extensive research, that one agent is the expert in this specialized field. That agent also has most of the listings. If that agent wants to continue to act on behalf of his current clients (the sellers), he cannot represent Megan as a buyer client. She would either have to be an unrepresented buyer or find another agent, even though no other agents in the area specialize in those properties.

3. Dean has a preferred agent, who has worked on his behalf in the past. Dean trusts that agent, and calls them up on a listing they have on the market. That agent cannot work with Dean as a client because of the double recusal rule (they would have to refer both Dean and the seller to different agents).

                4. Jim Agent is taking care of business for his colleague, Judy Licensee, while she is away. During that time, one of Jim’s past clients comes to him and asks to look at some homes with Jim next week, after Judy Licensee is back looking after her own business. They find a home they love and want Jim to make an offer. However, the home they love is one of Judy Licensee’s listings. Because Jim Agent was looking after Judy Licensee’s business while she was away, this is now considered a conflict of interest and Jim cannot act on his buyer’s behalf and needs to refer them to another agent.

·         Contact information
Office of the Superintendent of Real Estate: phone:  1-855-999-1883
                Real Estate Council of BC: phone: 1-877-683-9664
                Claire Trevena, MLA: : CR office 1-250-287-5100
                Minister of Finance Carole James:

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