BC Government Regulates Real Estate Agents After “Shadow Flipping” Report Says “Bad Realtors” Should Be Fined Upwards Of $250,000
The Christy Clark Government, with an election looming on the horizon, sees that skyrocketing home prices and speculators that are driving up the prices is bad news with voters. So it has accepted the recommendations of the independent advisory group and will establish a dedicated superintendent of real estate, who will take over the council’s regulation- and rule-making authority to carry out the changes required to restore public confidence.
By R. Paul Dhillon
VANCOUVER— B.C. New Democrat leader, John Horgan, is calling for a multi-agency task force to fight tax fraud and money laundering in the B.C. real estate marketplace.
“Premier Christy Clark should have taken concrete action against illegal activity in our overheated real estate market months ago. She chose to do nothing, and that’s not acceptable,” said Horgan.
“The residential real estate industry involved more than $65 billion in transactions last year. The premier needs to do much more than just tinker around the edges of this problem in our real estate marketplace. The B.C. Liberals must embrace all of the recommendations of the independent advisory group and take real action to protect consumers and hard-working members of the real estate profession who follow the rules in our province.
“The province has responsibility for law enforcement, real estate, provincial taxes, securities and the administration of justice. For a relatively low cost an integrated team could investigate and prosecute tax fraud, money laundering, and make recommendations on strengthening our tools for detecting and prosecuting bad apples in the B.C. real estate sector.
“Answers to the housing affordability crisis won’t come without hard action, and this task force is just one part of the action we need to take. I want a tax on speculators who run up the price of housing, and I want that money to go into a housing affordability fund. I want to close the loopholes in B.C.’s property transfer tax, and I want action against renovictions to protect renters.
“These are all measures Premier Christy Clark refuses to take, and that’s not good enough for the people of B.C. We need action on affordability and Christy Clark is afraid to lead.”
Clark did move this week to regulate real estate agents this week announcing the appointment of a Superintendent to oversee the industry.
Clark Government, with an election looming on the horizon, sees that skyrocketing home prices and speculators that are driving up the prices is bad news with voters. So it has accepted the recommendations of the independent advisory group and will establish a dedicated superintendent of real estate, who will take over the council’s regulation- and rule-making authority to carry out the changes required to restore public confidence.
“After reading the report, our conclusion is that the privilege of self-regulation in the real estate industry must end,” Premier Christy Clark said Wednesday in a press release. “This report examines shady practices and challenges plaguing the real estate market, particularly in the Lower Mainland, putting consumers at risk and tarnishing the reputations of honest professionals in the sector. We will act to protect British Columbians when they are making one of their most important family investments – purchasing a home.”
Meanwhile an independent advisory group formed to investigate the controversial practice of “shadow-flipping” in B.C.’s real estate market has released a report outlining 28 recommendations aimed at protecting consumers.
Among them is a call to hike the maximum penalty for misconduct by a licensed real estate agent from $10,000 to a much more severe fine of $250,000. The group also recommends increasing the maximum fine for brokerages from $20,000 to $500,000, reported Canadian Press.
The group was launched by the Real Estate Council of B.C. in February amid allegations that some real estate agents were flipping homes multiple times before a deal closed.
The controversial practice, sometimes referred to as shadow flipping, allows agents to make larger commissions by assigning contracts to new buyers at higher prices, while purchasers avoid paying the property transfer tax.
BC government has accepted the recommendations of the independent advisory group and will:
* Establish a dedicated superintendent of real estate, who will take over the council’s regulation- and rule-making authority to carry out the changes required to restore public confidence.
* Reconstitute the Real Estate Council with a majority of public-interest, non-industry members.
* Implement the recommended penalties, as well as increased fines for unlicensed activity and other offences.
* Allow for commissions from licensees engaging in misconduct to be taken back to the council.
* Make the managing broker responsible for ensuring the owner of the brokerage does not engage in the business of the brokerage if the owner is not a licensee.
* No longer permit licensees to offer dual agency representation.
