A panel that was set up to examine whether unscrupulous real estate agents are taking advantage of British Columbia’s overheated housing market will look into “shadow flipping” and other practices that have come under scrutiny in recent months, according to terms of reference released Tuesday.
The province’s superintendent of real estate assembled an eight-member panel last month to examine the behaviour of agents and how the B.C. Real Estate Council, the self-regulating body for the profession, handles allegations of misconduct.
The panel’s formation followed an investigation by The Globe and Mail into shadow flipping, formally known as contract assigning. The practice involves arranging a property sale and then finding a new buyer willing to pay more before the deal closes.
A two-page document listing the panel’s terms of reference says it will “examine issues identified in recent public commentary relating to the conduct and practices of real estate licensees and their associates that pose risks to consumers and the wider public interest.”
Those issues include contract assignments; dual agency, in which an agent is acting on behalf of both a seller and a buyer; conflict of interest and disclosure; misleading advertising; and predatory sales practices.
The panel will accept written submissions and issue recommendations to improve enforcement and protect the public, the document says.
The group, which is being led by Superintendent of Real Estate Carolyn Rogers, is expected to issue an interim report in April and a final report by the end of May.
The B.C. government has been under increasing pressure to respond to the rising cost of housing, including concerns that foreign investment is driving the market. The most recent provincial budget included measures to track foreign ownership, as well as modest tax measures to encourage the construction of new housing.
However, the province has so far left questions about the conduct of agents to the B.C. Real Estate Council, though Premier Christy Clark has previously said the government is prepared to act if the self-regulating agency fails to adequately address the problem.
The terms of reference are “remarkably comprehensive for the relatively limited jurisdiction of the [B.C.] Real Estate Council,” NDP MLA and housing critic David Eby said on Tuesday.
“They haven’t tried to read very narrowly what they’ve been asked to do … they left themselves a lot of room.”
The next step for the panel should be to ensure it has the resources – in terms of staff and funding – to investigate the concerns outlined in its terms of reference, he said.
“They really need to make sure that they have the auditors they want and the expert advice they need to do this job properly – and the government may have to step in to fund some of that, to make sure it is done properly.”Report Typo/Error
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