The Office of the Superintendent of Real Estate (OSRE) has postponed introduction of controversial legislation regarding dual agency and disclosures in real estate transactions.
But now realtors are calling for a separation of the regulations as they relate to commercial and residential real estate.
In a February 9 bulletin to all B.C. real estate licensees, the OSRE said it “is aware of the considerable concern from industry surrounding the implementation of the new rules and the impending implementation date.”
The Real Estate Consumer Protection Rules ban dual agency, where a real estate agent acts for both the buyer and seller, and increases mandatory disclosure of agents’ remuneration on a transaction. It was originally scheduled to come into force on March 15; the new date for implementation is June 15.
The date change follows publication of “New ‘Dual-Agency’ Rules Sowing Seeds of Confusion” (Business in Vancouver issue 1475; February 6-12) that reported on widespread confusion and fear in the residential real estate industry over how the Real Estate Council of BC (RECBC)was planning to interpret and enforce the new regulations.
Fines of up to $250,000 can be levied on individual agents found to have broken the rules, with brokerages liable for penalties of up to $500,000.
The Real Estate Board of Greater Vancouver supports higher standards that protect the public, president Jill Oudil told BIV.
“We’re concerned, however, about the compressed timing for implementation and the potentially negative impacts these rules could have on consumers the way they’re currently being interpreted.”
According to the BC Real Estate Association, approximately 5% of residential real estate transactions in B.C. involve a dual agency, but the new regulations will affect every agent-assisted property sale in the province.
Commercial real estate agents are particularly concerned because the legislation would prohibit an agent from selling a property to a potential buyer with whom they have had dealings in the past.
The RECBC defines this as “double recusal,” meaning the agent could have confidential information about both the buyer and the seller.
That wouldn’t work in the tight-knit commercial real estate market, said Ron Emerson, a veteran commercial real estate agent with Cushman & Wakefield in Vancouver.
He said that, unlike the housing market, commercial real estate involves a much smaller group of buyers and sellers, and agents often deal with the same parties repeatedly.
“Imagine how that would work for a company like Beedie Development Corp., as an example,” he said. “Everyone has worked with them at some point because they are one of the largest landlords in Metro Vancouver and the Fraser Valley. It just doesn’t make sense.”
Emerson said the OSRE should separate the regulations for commercial real estate and residential agents.
“We deal with business-to-business individuals, not residential, which seems to have the most problems.”
Emerson added that remuneration is already transparent to buyers and sellers in any commercial real estate transactions.
“Everyone knows how much we are making. Typically that is the first thing to get ground down.” •