Beefed up penalties among expected real estate reforms

Carolyn Rogers signals her probe of shadow-flipping and other real estate misconduct will call for major changes

Regulations are expected to curb shadow-flipping of homes

B.C. Real Estate Superintendent Carolyn Rogers has signalled she will recommend wide-ranging reforms of the real estate industry, including much tougher penalties to punish and deter realtors who are found to have engaged in predatory practices.

Her comments are contained in an interim report of an advisory group she was appointed to chair in the wake of revelations of misconduct by realtors in the overheated Vancouver-area real estate market.

The main example has been the practice of undisclosed shadow-flipping, where the home is resold to other, different buyers than the original one prior to closing – unbeknownst to the seller – allowing intermediaries to extract profits and realtors to collect more commissions, while ultimately driving up prices.

RELATED: Pace of house price gains in Fraser Valley now nearly rivals Vancouver

Rogers noted realtors are expected to solely defend their client’s best interests at all times and suggested the current ability of realtors to represent both sides of a transaction creates risk that advantage may be taken of some consumers.

“Abusing otherwise legal practices such as assigning contracts or acting in any way that fails to clearly disclose the interests of a licensee or puts those interests ahead of a client’s interests, cannot be tolerated,” Rogers said.

Her report indicates the Real Estate Council of B.C. should get more enforcement tools to regulate realtors, and that all contract assignments be reported directly to the council.

She said penalties for unethical behaviour must be increased significantly – potentially with additional commissions and profits confiscated – and those penalties must apply to more types of infractions.

Premier Christy Clark had previously promised the province will deliver reforms to take the profit out of shady practices.

Rogers also flags “blurred lines” between the Real Estate Council of B.C. and industry realtor associations, which have taken on quasi-regulatory functions.

“We are concerned that the trade associations have assumed the role of triaging consumer complaints and are doing so with no requirement for public transparency or reporting to the council,” she said. “We believe this must be cleared up.”

Also of concern, the report says, is that real estate licensees have reported misconduct to the media but not to official channels, apparently out of concern for repercussions.

B.C. Finance Minister Mike de Jong said he believes Rogers’ probe is on the right track and he’s particularly concerned about her findings of blurred lines between the regulating council and real estate industry associations.

“Is the regulatory structure itself equipped to properly protect the public interest?” de Jong asked.  “It needs to be clear to consumers and clients who has primary responsibility for that.”

He also acknowledged “the influence this red hot market is having on the industry.”

Real Estate Council of B.C. chair Marylou Leslie said the council fully supports the advisory group’s work.

Rogers’ advisory group is aiming to deliver a final report and recommendations in early June.

Just Posted

Kiwanis’ Willows Tea Room celebrates 70 years

May 25 event features cake cutting and heritage walk to celebrate piece of Oak Bay history

Hundreds rally in support of horse carriages outside Victoria City Hall

Crowd angry with Coun. Ben Isitt’s motion to ban local horse carriage industry

New virgin queen headlines ‘Bee Day’ at Saanich sanctuary

Taste bee spit and check out the hive at Swan Lake Christmas Hill Nature Sanctuary this Sunday

Rifflandia Festival cancelled for 2019

Early Bird tickets can be refunded at point of purchase, or held and redeemed for 2020

Five-month bridge closure poses early impacts on drivers during rush hour

Construction began Tuesday on the crossing commonly known as the Bay Street bridge

VIDEO: Canadian, U.S. Coast guards run oil spill response drills

20 vessels were on the water to practice international response methods

POLL: Were you satisfied with the Game of Thrones series finale?

Millions gathered in front of their televisions Sunday night to watch the… Continue reading

Greater Victoria wanted list for the week of May 21

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

Raptors beat Bucks 105-99 to move within 1 game of NBA Finals

Leonard scores 35 as Toronto takes 3-2 series lead over Milwaukee

B.C. Supreme Court dismisses review around ferry workers’ right to strike

B.C. Ferry and Marine Workers’ Union collective agreement expires November 2020

Young Victoria distillery earns prestigious Scotch awards

Scottish influences range from techniques to ‘kilted tours’ at award-winning business

Municipalities protest after B.C. declares marijuana crops ‘farm use’

UBCM president seeks answers in letter to John Horgan government

CMHC defends mortgage stress test changes amid calls for loosening rules

Uninsured borrowers must now show they could service their mortgage if rates rose two per cent

Brewpub offers ‘boat valet’ for paddlers during Surfrider celebration tonight

Free ‘Surf Formal’ evening features a local art auction, door prizes, live music

Most Read