British Columbia’s real estate regulator says its two-year investigation into questionable training tactics at New Coast Realty did not uncover enough evidence to discipline the large Vancouver-area brokerage firm, whose owner was found by The Globe and Mail to be giving agents dubious instructions on how to deal with clients.
The Real Estate Council (REC) of B.C. announced Thursday that its complaints committee determined the regulator could not prove any clients were put at risk by agents at New Coast taught questionable tactics by owner Ze Yu Wu, who was not licensed as a realtor or listed as the firm’s managing broker.
The high-profile investigation was launched immediately after audio of a October, 2015, seminar was obtained by the Globe and published in April, 2016. On the tape, Mr. Wu was heard giving tips such as how to spur a quick sale by lying to a client and telling them that the first offer will be the best one they get. A council spokesperson said it was unable to secure the original recording of this session nor find the person who recorded it.
Still, the council retained experienced lawyer Len Doust to oversee the investigation from its outset and investigators attended the brokerage, interviewed various current and former New Coast agents and reviewed and analyzed a large number of files and transaction records. The council said it could not release the terms of Mr. Doust’s initial retainer letter nor his final report to council because they are both privileged legal documents.
Though no further discipline will be meted out to New Coast, which at its peak employed 445 agents and grossed hundreds of millions of dollars in sales each year, the REC said it had disciplined 10 of the firm’s agents as part of the sprawling investigation.
Rosario Setticasi, New Coast’s managing broker and chief compliance officer, said the company is “pleased” with the council’s decision.
“The findings of the investigation have revealed no wrongdoing on the part of the brokerage,” Mr. Setticasi said in a statement Thursday.
He added that in the past two years the company has developed stringent new processes and procedures to satisfy the conditions voluntarily agreed upon with the council and also provide clients with service that is above the industry’s standard.
Tony Gioventu, executive director of the Condominium Home Owners Association of BC, said the alleged violations and complaints that arose at the time obviously had to be prosecuted under the standing rules and procedures and did not gain the benefit of the changes to penalties, disciplinary procedures or reporting requirements.
Mr. Gioventu, who was part of the independent panel that precipitated the overhaul of how B.C.'s real estate industry is regulated, acknowledged the conditions imposed upon New Coast and its agents significantly curtailed the activities that arose and protected the public much more. However, he said the council still has room to improve its oversight of real estate agents, managing brokers and their firms.
A Globe investigation into more than 100 of the council’s disciplinary proceedings showed real estate agents in Metro Vancouver faced fines and suspensions that were dwarfed by the hefty commissions they earned in B.C.'s superheated housing market. The council has since increased its maximum disciplinary penalty from $10,000 to $250,000 for each contravention, but no hearings into misconduct occurring after these new rules kicked in two years ago have been concluded.
The Real Estate Council of B.C.'s decade of self-regulation, which gave the body full control over licensing, regulation and discipline, was ended in 2016 by former premier Christy Clark after The Globe revealed widespread problems in the industry. The body was restructured to ensure that the majority of members come from outside of real estate, whereas in the past, just three of 17 members were from outside the sector.