VANCOUVER – British Columbia’s real estate industry no longer deserves the privilege of self-regulation and will have that authority stripped away, Premier Christy Clark announced after a damning report concluded the sector had lost the public trust.
Clark said Wednesday the province will hire a new superintendent of real estate, who will take over the rule-making, oversight and disciplinary powers that have been held by the Real Estate Council of B.C. since 2005.
“The real estate sector has had 10 years to get it right on self-regulation and they haven’t,” Clark told a news conference. “So we are going to end the right of the real estate sector to self-regulate.”
The announcement comes a day after an independent advisory group tasked with restoring consumer confidence in the industry released a report with 28 recommendations, including hefty fines for misconduct.
The report did not make a recommendation on self-regulation, but it said such a regime works when members of the profession hold themselves and each other to a higher standard than anyone else.
“Each member of a self-regulating industry needs to be part of the compliance regime and report misconduct promptly,” it said. “The independent advisory group found this culture is lacking in the real estate industry.”
Clark said the report showed self-regulation of the industry must end because consumers are being put at risk and the reputations of honest agents are being tarnished.
She said the government will take immediate action on all the recommendations, including prohibiting a single agent from acting for both the buyer and seller in a transaction and raising maximum fines to $250,000 for individual Realtors and $500,000 for brokerages.
The province will also revamp the industry-funded real estate council and replace 50 per cent its members with people from outside of the industry.
The council said in a statement that it is “ready, willing and able” to work with the government to implement the steps announced Wednesday.
The province already has a superintendent of real estate, Carolyn Rogers, but she is set to leave for a job in Ottawa at the end of July and has long had other duties as head of the Financial Institutions Commission of B.C.
The new position has already been posted and will be solely focused on real estate, Clark said.
Rogers said she was pleased the province would implement all the recommendations and establish a dedicated superintendent of real estate.
David Eby, housing critic for the Opposition New Democrats, has been calling for an end to self-regulation of the industry for months.
“It’s common sense based on the findings of the report,” he said. “It’s clear that this was a failed regulator.”
But Eby criticized the premier for not making an announcement on affordability, and accused her of failing to address the underlying issues of speculative investment, foreign capital, money laundering and tax evasion.
Earlier Wednesday, the NDP called on the province to launch a task force of police, Crown prosecutors and auditors that would investigate and prosecute fraud and money laundering in the housing market.
Clark said the province was already taking action to crack down on criminal activity. She promised to announce new actions to tackle affordability guided by six principles: increasing housing supply; linking communities through smart transit; supporting first-time homebuyers; protecting consumers; increasing rental supply and improving affordability for the middle class.
The premier has been criticized for not addressing foreign ownership in these principles, and she said Wednesday that everything was on the table.
“We are considering all the suggestions that have come from citizens, local governments, that we’ve learned from other jurisdictions,” she said. “All of those things are on the table. Nothing is off.”