A panel investigating misconduct by B.C. real estate agents is calling for much more punitive fines to a maximum of $250,000 for individuals, from the current $10,000, and to $500,000 for brokerages, from the current $20,000.
“These will be applied for when individual agents or firms do not treat a consumer fairly,” Carolyn Rogers, B.C.’s superintendent of real estate, who led the panel, told a Tuesday morning press briefing that released a long-awaited report.
It follows widespread outcry over unsavoury practices, including so-called shadow flipping and double-ended deals, that take advantage of both buyers and sellers in an “unprecedented” hot market for an agent’s own gain.
“The current regime was set for transactions of homes, not investments,” said Rogers. “Houses are no longer just homes. They are investments and this has put pressure on a regime that has not changed.”
Fines for administrative infractions such as late filing or breaches in record-keeping will be raised from $1,000 to $50,000.
In addition, the report calls for the “disgorging” of any ill-gotten gains obtained by an agent via fraudulent ways to be returned to a client in a process that would involve the courts, said Rogers.
Critics and experts, mindful of the immense commissions and bonuses made by agents in a single deal, have been pushing for agents found guilty of fraud to pay back any money instead of merely facing a maximum fine.
The report–months in the making–makes 28 main recommendations. Of these, 21 were directed to the Real Estate council, a self-regulating organization, and seven to the government.
Also on the list in Tuesday’s report is a recommendation that the Real Estate Council of B.C. — a self-regulated, provincial organization tasked with overseeing the industry — should increase the number of publicly appointed members from 3 out of 17 to 50 per cent.
Currently, there is a blurring of responsibilities and reporting lines. Public complaints about agents often get taken to B.C.’s private real estate boards because they run and control access to the proprietary Multiple Listing Service, a database that holds information essential for any agent conducting business.
Some of these, including the Greater Vancouver real estate board, have, in recent months, increased their maximum fines. But their investigations or disciplinary decisions remain behind closed doors so it has not been possible to see how they have been handled, if at all, in some cases.
A committee to implement the report’s recommendations will be headed by Dave Peerless, who said he will be appointing members in the next few weeks.