President's message: Change has arrived

We’re on the eve of change. On June 15, new rules will come into force that effectively prohibit limited dual agency in BC and require you to provide more information to your clients when it comes to compensation.

These rules will affect how we all do business. While there are several key training resources available to help you understand what’s expected of you, there’ll no doubt be situations and questions that arise that our regulating bodies haven’t contemplated.

I’m a REALTOR® like you. I know these changes will require an adjustment period. We’ll work together to get through this transition.

We’re urging the Real Estate Council of BC (Council) to work with us to help build understanding within our membership in the days and weeks after these rules are in place.

It’s been a long road to get to this day. Two years ago, Council’s Independent Advisory Group (IAG) released its 28 recommendations to strengthen regulations that hold real estate licensees accountable to the public.

Our Board had been calling for many of the recommendations included in the IAG report for years. We believe in raising the bar for Realtor professionalism and I know so many of you do as well.

We’ve been frustrated, however, at certain points with how the regulator was choosing to implement these rules. At times, we needed to advocate hard to ensure the changes wouldn’t negatively affect our clients.

Our efforts contributed to multiple advocacy successes, including convincing the government to:

• revise and twice delay implementing these rules;
• abandon the so-called “double-recusal” rule that would’ve required Realtors to regularly abandon both sellers and buyers in the middle of a transaction; and
• undertake a review of our new co-regulator structure that’s been causing so much confusion.

With the implementation of these rules just days away, our focus needs to be on the future. It’s time for us to move forward. We need to turn our public reputation around. Part of that means showing our commitment to stronger consumer protection.

When proposed changes don’t make sense, we’ll be sure let the government know in no uncertain terms. However, we need to also send a message to the public that we’re intolerant of anyone who operates outside of the rules.

It’s time for us to advance our profession beyond the last few challenging years we’ve experienced.

Together we’ll get through these changes and successfully navigate our way out of this period of change and upheaval.

I encourage you to review this edition of the newsletter. It includes a wide range of tools, tips, FAQS, and insights to help you with the June 15 changes.

Sincerely,

Phil Moore
REBGV President

New rules take effect Friday — what you need to know

This Friday June 15, the Real Estate Council of BC’s (Council’s) new rules take effect. These rules effectively ban limited dual agency in BC, address how you’ll disclose remuneration to sellers, and set new education and language proficiency requirements.

Here’s a breakdown of the information and resources you need.

New forms

Council recently released these five forms, which you’ll need to use beginning June 15:

• Disclosure of Representation in Trading Services
• Disclosure of Risks to Unrepresented Parties
• Disclosure of Risks Associated with Dual Agency
• Disclosure of Expected Remuneration
• Agreement Regarding Conflict of Interest Between Clients

The guides listed below explain how to use each of the four new mandatory forms and include answers to frequently asked questions about the situations in which the forms will be required.

• Disclosure of Representation in Trading Services
• Disclosure of Risks to Unrepresented Parties
• Disclosure of Risks Associated with Dual Agency
• Disclosure of Expected Remuneration
• Agreement Regarding Conflict of Interest Between Clients

Review these guides so you’re prepared to use the new forms. You can access the guides from WEBForms on June 15 in six languages: English, Simplified and Traditional Chinese, French, Persian, and Punjabi.

Have questions?

Here are a series of resources that’ll help answer key questions you may have about these rule changes and your obligations under them:

• FAQ on ban of Dual Agency
• FAQ on disclosure of representation in trading services
• FAQ on current and former clients
• Best practices for avoiding conflicts of interest
• Five key questions to prepare for rule changes
• Three things you can do now to prepare for change

WEBForms updated

The BC Real Estate Association is updating 23 commonly used forms on WEBForms to comply with the new rules. Click here to see the full list of forms, and here to learn more about how they’re changing.  

One of the changes announced was that the Working with a REALTOR® brochure will no longer be in use as of June 15. REALTORS® will instead use Council’s new mandatory disclosure form, Disclosure of Representation in Trading Services. You’re required to make this disclosure to consumers before providing any trading services.

As you’ll still receive and work with clients’ personal information, BCREA’s created a new standard form called the Privacy Notice and Consent form. You’ll need to have the Privacy Notice and Consent form signed by your clients and kept on file. You can review that form here.

All new and updated forms will be available on WEBForms on June 15. Remember to discard any print or electronic copies of previous versions and replace them with the updated forms. We can’t accept outdated forms as of June 15.

Rule Changes: Agency and Disclosure course

Council has collaborated with the UBC Sauder Real Estate Division to develop a new online course called Rule Changes: Agency and Disclosure. Beginning in October, you’ll need to complete this course before you can renew your real estate licence.

The course is designed to help you understand and comply with the June 15 rule changes.

Council sent you an email in the last few weeks with a link to register based on the date your licence expires. Licensees whose licences expire in October 2018 have been given the first opportunity to register.

Learn more about this new required course before registering.

Online resources

Licensee Knowledge Base

Access the Licensee Knowledge Base to view all of the different resources to help you with this change.

Managing Broker toolkit

This comprehensive broker resource contains information on maintaining electronic records under the new rules, referral fees, obtaining informed consent, issues that smaller brokerages face, and explanations of the new forms and how to use them. If you’re a broker, be sure to review this toolkit thoroughly.

How to register for Council's course on the new rules

After receiving REALTOR® feedback, the Real Estate Council of BC is allowing all real estate licensees in BC to register for the new required course, Rule Changes: Agency and Disclosure, earlier than they first planned.

A private registration link was sent to you based on the date your licence expires. Registration links were sent on the following dates:

• May 25: for October to December 2018 license renewals
• May 28: for January to March 2019 renewals
• June 1: for April to June 2019 renewals
• June 2: for July to December 2019 renewals
• June 4: for January to March 2020 renewals
• June 6: for April to June 2020 renewals
• June 8: July to September 2020 renewals

The link you received in that email is currently the only way you’ll be able to register for the course.

If you’re not sure when your licence expires, go to Council’s online Licensee Search to find your renewal date.

Course content

Rule Changes: Agency and Disclosure is a self-paced online course that takes five or six hours to complete. There are five modules:

1. A Primer on Agency
2. Disclosure of Representation in Trading Services
3. Disclosure of Risks to Unrepresented Parties
4. Disclosure to Sellers of Expected Remuneration
5. The Ban on Dual Agency and Dual Agency Disclosure

Each module consists of an introductory video, a lesson, and an assessment. You must score 70 per cent or higher on the assessment to pass each module.

Course completion and licence renewal

When you complete this course, Council will send you a completion letter. Please save this letter and include a copy of it with your license renewal application.

Cost

The course costs $75. You’ll be asked to pay this fee when you register online.

To learn more about this new course, visit Council’s website.

It’s not often black and white

If conflict of interest questions could be answered with a simple black and white, a yes or no, we wouldn’t need lawyers and the Real Estate Council of BC staff to guide us and managing brokers would sleep better at night.

The question of whether we can act for more than one party has now been dealt with by the government. In the past, the Real Estate Services Act permitted dual agency in a limited way with the informed consent of the parties. But this is no longer the case. By changing the legislation, the provincial government has inserted itself, by statute, into relationships between consenting adults by saying, “you can’t have the same agent in the same deal even if you and the other client are okay with it.”

That horse has left the barn, as they say, and as of June 15, we must consider how to deal with potential conflicts of interest as they arise.

Simply put, a conflict of interest is a situation where the duty of loyalty to your client rubs up against your own self-interest. Conflicts of interest are fact and context driven, and some are obvious, of course, like dual agency, but others may not be so easy to identify.

Here’s are a few tips to help you in the new world of conflicts of interest and to stay on top of your game:  

• Since we have a duty to disclose all material information to our clients, we must disclose real (and I would suggest perceived) conflicts of interest. Once disclosed, we must ask our clients for their instructions. As mentioned, the government has said we can’t act for more than one client in the same transaction.
• With myriad potential conflicts of interest lurking, our brave new world requires us to be fully prepared. Relying on standard practices is a great way of dealing with conflicts. I suggest you focus on these with vigour until we’re all familiar with the new way of doing things. At the moment, our regulator has its “tolerance for conflict meter” set at one increment above zero. You don’t want to be the first, second, or even the third unfortunate soul through the Council’s regulatory system on this. Over time, and with disciplinary decisions being published, we’ll have a better sense of where our regulator sits on conflicts of interest, when they’re triggered, and how we must resolve them. Until then, “when in doubt, disclose.” Ask for instructions and then document what you’ve done.  
• Council’s five new forms adequately address conflict of interest. I've been pleasantly surprised by how easy they are to read and understand. Maybe some will think the new forms put lipstick on a pig, but for me, they make it easier to think black/white, yes/no in most situations, and they’ll do the job if they’re used for their intended purpose and at the appropriate time.
• If you haven’t already done so, it’s time to retool your assembly line. Review what you think, say, and do with each client and potential client you encounter. Consider the various situations that can pop up on the road to a consummated listing or deal. Review your standard scripting. Do your scripts have any language about how future conflicts of interest will be dealt with—because you’re sure to encounter some along the way. Why not get them out on the table early with your clients? That way, when conflicts arise they’ll be easier to deal with than if you have to explain them from scratch.

Let’s consider some scenarios, now, that you may be faced with that require an updated approach:

• A former client wants to make an offer on your listing, using you to write the offer.
• A current client (under contract) is interested in one of your listings or wants to see a property you’ve already shown to another client.
• A close relative wants to make an offer on your listing or wants to see a property you’ve already shown to another client.
• You’re standing in line in front of a show suite with your three buyers, all of whom want one-bedroom units in that building.
• A potential buyer comes to your open house, says she’d like to write an offer, and tells you she'll give you the listing on her place if your seller accepts her offer.
• An unrepresented buyer asks you whether he should insert a subject-to-financing clause in the offer you’re writing for him on your listing.
• You’re an expert in a particular neighbourhood. Local residents and potential buyers regularly contact you about the neighbourhood. A big part of your listing presentation focuses on the long list of contacts you have who want to buy in the area.

How will you handle these situations? Do you know how to avoid conflicts of interest?

Here are my suggestions:

• Integrate conflict of interest language into your presentation scripting. Identify what a conflict is; give examples and explain how these will be handled if they occur.
• Develop a list of trusted colleagues (at least three) to whom you'll refer conflicted parties.
• Brokers: Consider developing an office policy on dealing with double-recusal situations so your REALTORS® have a standard to follow. For example, if two buyers are represented by the same Realtor, with buyer #1 having made an offer on a property and now buyer #2 wanting to do the same, which buyer is going to be released? The policy might be to stick with the buyer who wrote first with buyer #2 being released and referred out. If the Realtor has already explained this possibility in advance and can point to an office policy, the conversation will be much easier.
• Take Council’s new online agency course as soon as you're able.

When in doubt, slow down, remind yourself who your client is, and review the situation in the context of your duties of loyalty, confidentiality, and disclosure. If you do, the correct course of action will likely present itself to you. If it doesn’t, don’t take action until you've spoken to your managing broker. I can’t imagine a client would be upset if you say you need time to speak to your manager to ensure you do the right thing.

Deferring property taxes, building affordable market and rental homes, and accelerating building permits

Deferring property taxes

Property taxes are due in early July. If you have clients struggling to make ends meet, they may be eligible to defer their property taxes.

Learn more.

Housing forum 2018

Throughout BC, more and more residents struggle to buy or even rent a home. Are there solutions?

A few hundred stakeholders – builders, developers and REALTORS®, got together to listen to what the experts have to say.

Learn more.

New accelerated building permit pilot program

We all know that housing supply isn’t keeping up with demand. The City of Vancouver’s latest solution is to build homes faster through a new accelerated development permit pilot program.

Learn more.

New Rental Housing Task Force wants to hear from you

If you or your clients own rental units – from secondary suites in homes to multi-unit downtown apartment buildings – the newly appointed BC Rental Housing Task Force wants to hear from you. Here’s how you can provide advice online or in person.

Learn more.

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