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The Globe and Mail

Vancouver realtors urge stricter action against unprofessional conduct

Keith Roy, a real estate agent with Remax Select, would like to see larger fines for unprofessional conduct among his industry peers.

Rafal Gerszak/Rafal Gerszak

Some real estate agents in Metro Vancouver's booming housing market say they want the Real Estate Council of B.C. to take much stronger action than it has in the past against agents conducting themselves unprofessionally, whether it's through increased fines or harsher suspensions.

Their comments come as new numbers show there are more real estate agents in Greater Vancouver than ever before.

Christopher Hughes, a real estate agent with Maxxus International Real Estate Group, said in an interview that he would like to see the real estate council – which regulates licensed agents – take a far stricter approach.

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"As a self-regulatory organization they should really put suspensions in place and make an example of people – and they don't do that. They really don't," he said.

A continuing Globe and Mail investigation into Metro Vancouver's real estate market this week found several recent sales in which brand new and seemingly vacant houses – some staged with furniture – were marketed to buyers as "owner-occupied" and, therefore, "no GST" required.

The Canada Revenue Agency has told The Globe it is auditing cases of possible GST evasion on new-house sales. It is also investigating cases of undeclared capital gains or income, many involving homeowners who evade taxes by declaring investment properties as principal residences.

An earlier Globe story into so-called shadow flipping prompted the province's Superintendent of Real Estate and the real estate council to launch a review. Shadow flipping involves arranging a sale and then finding a new buyer willing to pay more for a given property before the deal closes. Assigning contracts is legal, but controversial. Speculators who profit in this manner don't pay property transfer taxes, because the property technically does not change hands until the deal closes.

Mr. Hughes, who has been an agent for nearly 25 years, said for some, a suspension appears to have become just "the cost of doing business." "[The agents] made maybe $50,000 or $100,000 and they get nothing for a fine," he said. "You can build that into your business model.'OK, I'm going to get suspended for seven days. So what?'"

The length of suspension the real estate council can hand out is open-ended. However, in cases involving 18 people posted by the council in December, in one rare instance one had his licence cancelled. Three others resulted in suspensions – one was two weeks, one was three weeks and the other was one month. Six of the 14 people who were not suspended received reprimands with no fine. The other eight received reprimands, plus fines of between $1,000 and $5,000.

The council can issue a maximum fine of $10,000 plus costs for an individual real estate agent.

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Keith Roy, an agent with Remax, said he'd like to see larger fines. "That would scare realtors from engaging in unethical behaviour," he said. Mr. Hughes said he'd also like to see the council make it so agents can no longer represent both the seller and buyer in one transaction.

The Real Estate Council of B.C., when sent a list of questions by The Globe about its disciplinary process, said it had no comment. The council last week issued a bulletin to licensees that said those who put their financial gain ahead of a client's interests will be investigated and face discipline.

Maureen Coleman, the council's professional standards adviser, earlier told The Globe she felt its punishments were adequate. "I think most people if they were suspended without pay for their source of employment, it is considered serious," she said.

The Real Estate Board of Greater Vancouver, in numbers released to The Globe this week, said it had 12,447 members – or real-estate agents – at the end of January. That's compared with just over 11,000 three years ago, and just over 10,000 in January, 2011.

The University of British Columbia's Sauder School of Business, which is the primary licensing school for real estate in this province, saw enrolment in its real estate courses climb to 4,619 students in 2014-15 – up from 2,835 students in 2012-13. A spokesperson said the numbers have fluctuated in recent years. The student total in 2010-11 was 4,044.

Darcy McLeod, president of the Real Estate Board of Greater Vancouver, said its membership increase shows the market is very active. Mr. McLeod said while there are some who believe the punishment handed out by the council has not been severe, those who have been subject to discipline might disagree. He said the board does not believe the council has been too passive.

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Editor's note: An earlier version of this article included a list of disciplinary decisions by the Real Estate Council of B.C. It did not include the rare instance of one who had his licence cancelled.

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