Cracking down on shady real estate practices: Will a final report go far enough?
Posted June 28, 2016 7:53 am.
Last Updated June 28, 2016 7:59 am.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – It may take a lot to restore confidence in local realtors after the curtain was recently drawn back on some shady practices in our overheated housing market, but a report due out today aims to do just that.
The question is, will it be enough?
A panel appointed to look into unscrupulous practices within the real estate industry — things like shadow-flipping — will be releasing its final recommendations around noon, but some of the details have apparently been leaked.
The Globe and Mail reports the panel is pushing for public complaints to be handled by the self-regulatory Real Estate Council of BC and for enforcement and penalites to be beefed up.
Tsur Somerville with UBC’s Sauder School of Business says that’s a move in the right direction.
“Whether or not it goes far enough depends on how many resources the council has to investigate and pursue and, really, the degree to which they can actually levy meaningful penalties,” he tells NEWS 1130.
“As people have commented, when a realtor is making a six-figure commission on a property, having a $10,000 penalty isn’t much of a deterrent.”
Maximum fines for realtor misconduct will reportedly be increased from the current $10,000 to $50,000 or more.
Regardless of the coming recommendations, Vancouver-Point Grey MLA and NDP housing critic David Eby believes the panel report is a missed opportunity.
“There were a couple of things I was hoping for out of this process and one of them was that this group would take the opportunity to do an in-depth audit of the complaints process and a couple of the more notorious real estate agencies that are out there and see what’s going wrong with the system,” he says.
“Unfortunately, that’s not what happened. This will be a high-level policy report and it will be interesting to see what they found in only 15 weeks.”
Eby also feels increasing fines for misconduct misses the mark.
“The issue hasn’t been the amount of the fines — it’s whether or not real estate agents who engage in fraud are allowed to keep both their licenses and the proceeds of the fraud they are engaging in. This is incredibly offensive for families ripped off by a bad realtor. Not only does the person get to continue practicing real esate, but they also get to keep the money they made unless you go to BC Supreme Court.”
Eby says the biggest issue to be dealt with is the “culture that has evolved” at the real estate council and its “unwillingness” to punish realtors.
The Real Estate Council of BC, the Superintendent of Real Estate and members of the Independent Advisory Group examining the regulatory framework for real estate in BC will release the IAG’s final report at noon today.
