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

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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Victoria police arrested three men following a double stabbing April 19. The two victims suffered non-life-threatening injuries. (Black Press Media file photo)
Three arrested after double stabbing in Victoria

Two people sent to hospital after being stabbed, hit with bear spray

Club Phoenix Fitness in Langford is the first Island business to be ordered closed by the provincial workplace closure order put into effect April 11. It will be closed until at least April 29. (Google Streetview/Screenshot)
Langford gym first Island business to be closed by public health order

Workplace closure order can now close businesses with three or more COVID-19 cases

Father Marinaldo Batista, who served at Catholic parishes in Saanich and Sooke, died April 1 in Brazil from complications of COVID-19. (Facebook/St. Elizabeth Church)
Brazilian priest who served in Saanich and Sooke dies from COVID-19

Father Marinaldo Batista, 53, went to Brazil to visit his parents and died there April 1

A sewage pipe is pulled along Niagara Street in James Bay in 2018 as part of the Capital Regional District’s wastewater treatment plant project. Over the next 10 years, the city will complete 78 new underground infrastructure projects, upgrading sewage, stormwater and water main pipes. (Black Press Media file photo)
Construction begins on Victoria’s 10-year pipe replacement project

78 underground infrastructure projects will cost $53.8 million

FILE – NDP Leader John Horgan, right, and local candidate Mike Farnworth greet one another with an elbow bump during a campaign stop in Coquitlam, B.C., on Friday, September 25, 2020. THE CANADIAN PRESS/Darryl Dyck
B.C. won’t be using random individual road stops to enforce travel rules: Safety Minister

Minister Mike Farnworth says travel checks only being considered at major highway junctions, ferry ports

Police executed a search warrant at the Devils Army Clubhouse on Petersen road in Campbell River on August 10, 2017.
Murder trial into 2016 Campbell River killing underway in Victoria

Ricky Alexander is charged with the first-degree murder of John Dillon Brown

..
Abbotsford nurse at ‘breaking point’ pleads with public to take COVID-19 seriously

Instagram post urges general population to stay home, wear a mask and get vaccinated

Alex Mah of Chemainus spends a sunny day at Kin Beach reading to daughter Beatrice Mah. 3. (Photo by Don Bodger)
Vancouver Island’s mini-summer poised to fade

Cooler and damper this weekend, summer-like conditions not likely to return until late June

Nanaimo Fire Rescue investigator Mark Jonah probes the scene of a blaze that destroyed two apartments on Sunday, April 18. The cause of the blaze has not been determined. (Chris Bush/News Bulletin)
Arson suspect arrested after apartment fire in Nanaimo

35-year-old man arrested for allegedly starting fire lived in the complex

A wildfire has started near Gold River, and B.C. Wildfire Service crews are on scene. Photo courtesy Coastal Fire Centre
Small wildfire burning in difficult terrain near Gold River

Coastal Fire Centre investigating, but confirms blaze is human-caused

FILE – Health-care workers wave to people clapping and yelling thank you to the frontline workers during the 7 p.m.-tribute outside the Lions Gate Hospital in North Vancouver, B.C. Wednesday, April 8, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. nurses issue plea for all to follow health orders as hospitalizations spike

Nurses worried about strain COVID-19 is having on hospital capacity, care

Most Read