B.C.’s real estate regulator is investigating alleged realtor misconduct in the flipping of pre-construction condo units in Vancouver’s hot market and wants the province to start tracking the activity following a recent Globe and Mail investigation.
The Globe found select realtors and speculators who buy multiple condos have preferential first access to some of the most sought-after units in Vancouver, through private deals with developers.
The probe, published this week, also discovered a significant number of industry insiders − particularly realtors − are buying then flipping condos themselves for six-figure profits, further squeezing tight supply and driving up prices for ordinary buyers.
Erin Seeley, executive director of the Real Estate Council of British Columbia, said on Tuesday that creating a registry of who is buying and selling units before towers are built, as a bill now before the legislature proposes, would help the regulator target those agents who flip these properties without properly disclosing their own stake in them.
“This is an issue that isn’t tracked through land asset sales and it’s not necessarily as open as it could be,” she said. “We’re taking this seriously and, per our mandate, we are following up with an investigation to provide a fair process and refer to discipline if we can.”
Ms. Seeley said she could not confirm which licensees or which allegations the council is investigating, but added that complaints often centre around an agent not properly disclosing their financial interest in the sale of a unit during what can be an intense, high-stakes transaction for the buyer.
“It’s often the communication around the [remuneration disclosure] form that’s the key,” she said. “It’s not just filling out the paper work, but did the consumer understand.”
New forms with plainer language will be introduced in the middle of June, she said, which should make it easier for buyers to understand if a realtor has an interest in the investment property, which is legal.
Several realtors who don’t have preferential access to new condos told The Globe they would like access to pre-sale data, so they can tell clients what’s been bought and sold and for how much. They also want developers to be compelled to give the public equal access to all units.
Ms. Seeley added that as a regulator it was out of her purview to weigh in on B.C. Finance Minister Carole James’s recent comment that she is open to studying whether the province should force developers to make pre-construction condo units available to all potential buyers at the same time and the same price.
The Office of the Superintendent of Real Estate, which oversees the real estate council, did not return requests for comment Tuesday.
However, the head of the B.C. Real Estate Association, a trade group for roughly 23,000 agents in the province, said it would consider opening up the whole pre-sale market to any buyer.
Chief executive Darlene Hyde said on Tuesday that her organization, which guards access to the lucrative MLS system, was troubled by the allegations uncovered by The Globe and wants to work with the provincial government to close any regulatory loopholes.
“The whole situation it’s just a little murky,” she said. “We stand by a strong regulator and we stand by an informed public.”
The BCREA also supports efforts to track pre-sale information, increase transparency and enforce higher penalties against unethical realtors.
The Real Estate Council’s decade of self-regulation, which gave the body full control over licensing, regulation and discipline, was ended in 2016 by then-premier Christy Clark after The Globe revealed widespread problems in the industry.
The body was restructured to ensure the majority of members come from outside of real estate and is still working to modernize its public complaints and disciplinary processes.