An advisory group has been formed to look into allegations of realtor misconduct in Vancouver’s overheated real estate market, but NDP MLA David Eby is questioning whether the group will have enough power and time to investigate the issue thoroughly.
“This is a distinguished group,” Eby said, “and when they sit down and look at the job they’ve been given to do, my sincere hope is that they come back to the minister and say to do an in-depth investigation we need resources and we need powers to do this investigation — and it’s going to take longer than eight weeks.”
The advisory group was struck following an investigation by the Globe and Mail showing some Vancouver realtors are using a mechanism called an assignment contract to flip properties before the deals close, without the knowledge of the original property seller. Realtors interviewed for the story said the practice results in a price increase with each flip. B.C.’s property transfer tax does not apply until the sale finally closes.
Carolyn Rogers, B.C.’s superintendent of real estate and CEO of the Financial Institutions Commission, chairs the advisory group. It will “review the conduct requirements in place for real estate licensees in BC, and to examine whether those requirements are adequate and whether they are being effectively enforced,” according to the advisory group’s website.
The other members of the group are Howard Kushner, a lawyer with Kushner Law Group; Don Wright, president and CEO, Central 1 Credit Union; Audrey Ho, commissioner at the British Columbia Securities Commission; Bruce Woolley, a lawyer at Stikeman Elliott; Carol Geurts, associate broker at Century 21 Veitch Realty in Creston, B.C.; Tony Gioventu, executive director of the Condominium Home Owners’ Association of B.C.; and Ron Usher, general counsel, Society of Notaries Public of British Columbia.
The advisory group will have the same investigatory powers as the Real Estate Council of British Columbia and the Financial Institutions Commission, Rogers said. Finance Minister Mike de Jong originally asked the group to produce its report by the first week of April, but the group has asked for an extension to the end of May or first week of June.
The advisory group is confident it can get the work done in that time, Rogers said.
But Eby questioned whether that was possible, given that it takes the real estate council around two years to investigate one single case of improper use of assignment contracts. Eby's riding, Vancouver-Point Grey, has seen dramatic price increases and flipping activity.
Assignment contracts have their place, Eby said, when a property buyer enters into a transaction but then suddenly loses their job or gets sick and is unable to complete the transaction.
“It’s an essential tool for that that’s been exploited by unscrupulous realtors,” he said.
“One of the things that would shut down this inappropriate use of assignments overnight is if the province would close this property transfer tax loophole.”
The advisory group is in the midst of drafting the scope of its inquiry. It will have the following principle in mind, Rogers said:
“Regulators, like the public, expect realtors to act strictly in the interests of their clients at all times. Any activity that puts the realtor at conflict of interest with their client is unacceptable.”