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British Columbia Unhappy B.C. real estate clients face daunting complaint process

Sandy Croley, sitting with her mother Lynn in Grimsby, Ont., is still waiting for resolution of a B.C. real estate complaint.

Michelle Siu/The Globe and Mail

Resentment still simmers within Janet Mackenzie, who says the real estate industry's self-regulating body cheated her of justice three years ago after an agent forged her signature while trying to get a higher commission.

The Real Estate Council of British Columbia investigated her complaint, stemming from a 2011 allegation involving a Vancouver condo bid, and after a year-and-a-half-long process suspended the agent for almost four months and ordered him to pay the enforcement costs. The same agent was later caught viewing a property during the suspension. He was suspended last year for another two months and agreed to pay for another council investigation.

The cost to him: $2,500 for the two probes into his wrongdoing, plus the commissions he may have lost while suspended.

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The commission he stood to gain if his fraudulent offer had not fallen through: $10,000.

"It was clear to me all along that they were seeking to protect him rather than to protect my interest – the public's – which is supposed to be (the council's) mandate," says Ms. Mackenzie, a regulatory affairs executive now living in Burnaby.

Those wronged by any of the province's 22,769 licensed agents have some choices: They can pursue costly and lengthy civil suits or they can ask their local police force to investigate if they have well-documented evidence of egregious cases of fraud or theft.

But the main mechanism for recourse, the Real Estate Council, can present a daunting and lengthy process for the average person, critics say. And those worried about the professional in charge of what may be the most important purchase of their life can face many hurdles in their efforts to assess their agent's track record.

"The whole system isn't set up to enable the victim," Ms. Mackenzie says.

The council advises potential complainants to try resolving the issue directly with their agent, then to contact the agent's managing broker, and if that fails, to lodge an official complaint with the council.

In January, Maureen Coleman, the council's former head of investigations, was moved into a position aimed at advising consumers and agents how to navigate the complaint process better. In the first four months of this year, Ms. Coleman and the council have responded to more than 1,000 public inquiries, compared to 639 complaints last year.

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The complaints have in part been spurred by media reports examining the industry and noting that average penalties for unscrupulous agents have amounted to what some characterize as a slap on the wrist in B.C.'s superheated housing market. Eighty-nine agents were disciplined in 2015, with about half avoiding repercussions other than paying the cost of the investigations and enrolling in a remedial course.

The council has pledged to accept any upcoming recommendations on improving its complaints and disciplinary processes from an independent advisory group. On Friday, the group submitted its interim report to the council and the council is to meet with the province next week to brief Finance Minister Mike de Jong on the report's contents.

In a statement, Carolyn Rogers, chair of the advisory group and CEO of the province's Financial Institutions Commission, said only that the group has made "substantial progress" on issues such as increased misconduct penalties, potential conflict of interest and predatory marketing and sales, among other matters.

While the council urges people with complaints to deal directly with their agent and brokerage first, Sandy Croley said what comes next when they do not co-operate has become a lengthy exercise in futility for her.

Ms. Croley said she had no idea what to do when her agent simply did not pay her back the $3,000 he had agreed to cut from his commission as part of their deal to sell her Port Coquitlam townhouse for a lower price last summer.

Ms. Croley had already moved back to Ontario to be with her ailing mother when the deal was completed at the lower price but with paperwork that gave her agent his original fee. However, Ms. Croley had an e-mail thread that spelled out his plan to repay the $3,000.

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Over the course of several months, she says that the agent refused to pay up, citing money troubles. In the meantime, Ms. Crowley had to get a bank loan and borrow from her mother to pay the bills after her move.

Eventually, the agent's managing broker established a payment plan of $200 a month that started last November. But receiving the money was difficult and Ms. Croley filed a complaint to the council at the end of February. The agent agreed to pay the remaining $2,000 via a money order, but that still had not been resolved as of earlier this week.

The agent threatened Ms. Croley with legal action if she disclosed his name to The Globe and Mail. However, The Globe has seen Ms. Croley's correspondence with the agent over the payment plan.

"I didn't want to report anyone, I wanted to be able to work it out with them, but it just got to this point where I was getting nowhere," she says. "There were several times I was just going to give up [trying to get the money back.]"

She doesn't know if her complaint will result in any discipline or how long it will take, but a Globe investigation into all of last year's decisions found the majority of cases took more than a year from complaint to punishment.

Ms. Mackenzie, who has interpreted legislation and worked in the political realm as part of her career, says that, in the current system, it is very challenging for the average consumer to find out if their real estate agent has a bad track record.

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The council's decisions rarely show up on the first page in Google search results and the disciplinary posts remain online in perpetuity only if they involve the harshest, and rarest, penalties, such as such as licence suspensions longer than a year, the maximum fine of $10,000 or a licence cancellation. More than half of all the council's cases result in reprimands or fines of less than $2,000, which, under council policy, are posted to its website for a year and then removed.

Marilee Peters, a council spokeswoman, said the agency is updating its online search tool so anyone can find an agent's current licence status as well as any ongoing discipline they face. But there are no plans to post all disciplinary decisions indefinitely.

B.C.'s 11 real estate boards, which guard access to the Multiple Listing Service, also mete out discipline to their members, but these decisions are private.

Dan Morrison, president of the 12,500-member Real Estate Board of Greater Vancouver, said his organization primarily deals with issues between agents and has no immediate plans to make its disciplinary decisions available to the public.

"We're not government-regulated, we're a private member organization," he said. "The purpose of our decisions is to educate our members about conduct."

Bound by board rules, real estate agents must not negatively affect the reputation, prospects or business of other agents, which stops agents from warning clients about unethical colleagues, said Sylvia Roberts, who sold properties in Surrey for 25 years.

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Ms. Roberts said she could tell her managing broker – but not her clients – when a rival agent at her brokerage began stealing listings from her and ripping off elderly clients through double-end deals in Surrey's Campbell Heights area during the late 1990s.

At a 2008 Real Estate Council of B.C. disciplinary hearing, a committee found the agent had committed numerous acts of "deceptive dealing" with a handful of clients and suspended his licence for 180 days, ordered that he enroll in several remedial courses and made him pay back $7,453 to cover enforcement costs.

"He should lose his licence for life because he's so crooked," Ms. Roberts says of the longtime agent, who is licensed through to December of next year. "We don't need that in the profession."

Ms. Mackenzie's agent was later fined $10,000 for his forgery by the Real Estate Board of Greater Vancouver, but Ms. Mackenzie did not find out about that until The Globe informed her of the board's decision, obtained through a leaked document.

"There are [agents] that thumb their nose at the rules because they know nothing will happen to them or if it does it will be behind closed doors," Ms. Mackenzie says. "And no one knows, so it doesn't really impact them professionally – that's the problem."

Enter your agent's last name in the CanLII online database to see whether they have received any disciplinary penalties in the past decade: http://www.canlii.org/en/bc/bcrec/index.html

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The Globe and Mail has analyzed the Real Estate Council of British Columbia disciplinary actions against 89 real estate agents last year. Of those licensees, just fewer than half faced no repercussions other than a reprimand and an order to pay for the investigation of their misconduct, which typically was assessed at $1,500. Another quarter of those agents were suspended for periods ranging from a week to a year, with an average length of six weeks.

Here are three random examples of those who were disciplined.

Short suspension

June, 2015

  • Agent: Hsin Ju (Amy) Tsao
  • Allegation: That she tried to sell her own condo, but did not disclose to the buyers – real estate agents from Alberta – that she was also the registered owner.
  • Penalties: By agreement, Ms. Tsao was suspended for 14 days, fined $2,500, ordered to pay enforcement costs of $1,250 and enrolled in a remedial course.
  • Agent’s comment: “[My managing broker] gave me the wrong instructions and I was a new [agent]. I didn’t know I had to disclose [that], it’s not like I did it on purpose. We were not trained at all for all this stuff. My manager was supposed to tell me ‘No, you cannot do an open house for your own property because blah, blah, blah.’”

Reprimand and fine

August, 2015

  • Agent: Trevor William Maxwell Inglis
  • Allegation: That he failed to act honestly and with reasonable care and skill when he negotiated a drop in price with the listing agents of a North Vancouver home. The council found Mr. Inglis told the seller’s agent that his client had no offers on their own home, which they needed to sell before purchasing. But that was not true, the council found, and instead his client had already entered into a contract to sell their home.
  • Penalties: By agreement, Mr. Inglis was reprimanded, fined $6,000, ordered to pay enforcement costs of $1,250 and enroll in a remedial course.
  • Agent’s comment: “I’ve been doing this business now 35 years. That was the very first time I ever had any issues whatsoever. In all honesty, I was protecting my client’s interest. [I had lots more] written documentation that the real estate council had a look at, but they didn’t use it.”

Longer suspension

October, 2015

  • Agent: Tracy-Allan James Schwartz
  • Allegation: The agent failed to act in the best interests of his client when he lied about getting a sample from a home tested for asbestos. The council found the buyer was told there was no asbestos, but upon renovating the house, the buyer discovered insulation containing asbestos.
  • Penalties: By agreement, Mr. Schwartz was suspended six months and ordered to pay enforcement costs of $1,500.
  • Agent’s comment: Mr. Schwartz, still suspended, could not be reached for comment.
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