B.C. plans to hire a new superintendent to oversee the real estate industry and complete an overhaul of the provincial body that regulates it by early this fall.
The Finance Ministry has stopped accepting job applications and has begun interviewing candidates to replace former superintendent Carolyn Rogers, who also headed the provincial financial services regulator but left those posts last month to accept a job in Ottawa at the federal bank watchdog.
A spokeswoman said late last week that senior Finance Ministry staff are “in almost daily contact now” with their counterparts in the real estate superintendent’s office and the Real Estate Council to implement all of an independent panel’s 28 recommendations.
The panel was asked to review how the industry regulates itself after stories in The Globe and Mail showed some realtors and brokerage firms were profiting from shadow flipping and other questionable practices. At the end of June, the panel found the council had become dominated by industry members who had taken disciplinary action only reluctantly over the past decade. Premier Christy Clark committed to implementing the recommended changes a day later, when she announced that the government would be taking back regulation of the industry.
“Everybody just needs to have a little patience to have the transition take place,” said Tony Gioventu, one of the advisory group’s members and executive director of the Condominium Home Owners’ Association of B.C.
The panel found the current council was not prepared to regulate an industry where business models had dramatically changed as real estate became a vehicle for speculative investment.
Under the new oversight structure, the superintendent will be able to make new rules to “respond to changes quicker,” Mr. Gioventu said.
The government will also reconstitute the council with a majority of non-industry appointees, who must pass a skill-based eligibility assessment. Currently, only three government-appointed members represent the public’s interest, while the other 14 seats are elected positions held by realtors and other industry insiders.
Vancouver MLA David Eby, the opposition’s housing critic, said he doesn’t know why the government is taking so long to make these structural changes, which he said do not go far enough.
“What I’ve said repeatedly is: They need to take a firehose to that organization,” Mr. Eby said. “They need new investigators, new staff and a new board because there has been too many years of letting corrupt real estate agents off the hook.”
The council will continue to license realtors, educate the public and agents about the industry as well as mete out discipline of realtors who break the rules. A Globe investigation earlier this year found the council’s fines amount to little more than the “cost of doing business” in Metro Vancouver’s real-estate market, where agents faced a maximum penalty of $10,000, but often gained much larger commissions.
Soon, unscrupulous realtors will face potential fines of $250,000 for wrongdoing – and up to $500,000 for brokerage firms.
At the same time, the council is hiring a new executive officer, with current head Robert Fawcett, who has led the organization for three decades, expected to retire in the coming months. The council is also hiring two more investigators and another liaison to join Maureen Coleman in helping the public and members of the industry understand the rules and regulations.
The new superintendent will also be able to force the council to investigate a particular matter as well as have a committee review why a complaint file was closed without disciplinary action.
The government has committed to a review of the new regulatory regime within 18 months.
-Courtesy of the Globe and Mail, published August 28th, 2016