Minister of Finance
Office of the Superintendent of Real Estate
Real Estate Council of BC
British Columbia Real Estate Association
Kamloops and District Real Estate Association
I am licensed as a realtor, as well as a mortgage broker and have 12 years of experience also specializing in predominately income producing properties. I have very great concerns about the proposed restrictions on the dual agency concept, in particular, on income producing properties. If one investigates the practice of knowledgeable purchasers in regards to their choice of realtors when investigating an income producing property, there are generally two classifications of purchasers being as follows:
- Use of “Favorite Realtor”, and
- Use of the “Listing Realtor”.
The first category is normally a relationship between a purchaser and salesperson, over a period of time. Most often the salesperson has demonstrated a high degree of knowledge and trustworthiness.
The second category is quite interesting in that many prospective purchasers prefer to communicate with the listing salesperson as typically, the listing salesperson is far more knowledgeable of the particulars of the property than any other salesperson.
Under the “Favourite Realtor” scenario, where a salesperson investigates the information on an income producing property that is listed with a different realtor, that inquiring salesperson may not understand some of the factors that may be inherent with the subject property and/or may fail to inquire into some of these matters. So, in my view, the current system does have some flaws.
As I understand the proposed restriction of the dual agency concept, the listing salesperson may not represent the two parties. He may suggest that the prospective purchaser contact a different realtor to represent him or acknowledge that the listing salesperson will prepare any documentation but will not represent or advise the purchaser in any manner. I understand that the listing salesperson, under this provision, could prepare an offer, considering “reasonable” conditions for the benefit of the purchaser, but would hold no fiduciary responsibility or obligation, to the purchaser. In such an event, it may be advisable to suggest to the purchaser that he obtain legal advice on the agreement itself. In any event, the listing salesperson is restricted from communicating with the purchaser. In this case, are the parties being properly represented and does any potential liability exist? I also ask, does the Superintendent of Real Estate have any liability? In the event it was deemed that the listing salesperson should have communicated an important matter to the purchaser, could the listing salesperson join the Superintendent in the action?
Punish the most likely less then 100 realtors who are the cause of this implementation of change, due to shadow flipping, non-disclosed commission(s) or remuneration(s); by them receiving an immediate mandatory 10-year real estate licence suspension. All fees and profit received as part of the infraction are the penalty payable plus an additional sum which you have determined plus all investigation costs incurred OR in leu of, accept a 1-year prison term. Harsh action requires an even harsher reaction, not handholding.
By utilizing Limited Dual Agency, at least the parties to the transaction will have representation; instead of both parties consenting to single recusal and one party to not too having representation. Or even worse, both parties being forced to seek out unknown agents. In my opinion the new rules would NOT protect consumers further but will create a greater disservice; by providing and enabling such avenue with the proposed changes, the risks of being an unrepresented party in a real estate transaction. With good intention, but surely does not seem to be the better choice to protect the consumer.
As a prime example, an explanation from the website of the Real Estate Council of B.C. notes, “licensees should remember that dealing with unrepresented buyers creates significant risks for the licensee, the unrepresented buyer and the licensee’s client.” So how does this offer greater protection to the consumer?
In conclusion, and please understand, I am not a lawyer, nor am I attempting to supply a legal opinion, it is my opinion that, any action that could be commenced by a damaged party as a result of your contemplated statute, would most likely result in a joint action, where the province could conceivably be held as the sole contributor to any such liability and there by liable for all costs. I, with all due respect, strongly suggest that you give further consideration to your proposal.