IIP essentially gave internationals permanent residency

Neil Sharma
REP

Canada’s defunct Immigrant Investor Program has long been associated with foreign plundering of Canadian real estate, and believed to have exacerbated unaffordability, but report from a University of British Columbia associate professor is calling for its reinstatement.

James Tansey of the Sauder School of Business at UBC says the principal funds from the IIP, as well as interest accrued, could fund rental housing in Metro Vancouver, of which there’s a pronounced dearth.

“If we have this investor demand for immigrants wanting to move to Canada and establish themselves principally from China and Asia and have a housing problem where there’s a shortfall of investment, my proposal is the federal government should at least look at a modified version of it where deposits made fund the gaps between what it costs to build starter properties and rental properties,” Tansey told REP. “I have no issue with that capital being tied up for 10 or 15 years as a form of a mortgage, and I’d have no issue with some of that capital not being refundable and it being a cost of a program.

“We had 50,000 people in the line for that program when it was cancelled, and even 2,000 a year paying $1mln a year would be $2bln annually into the space.”

The IIP, which essentially gave internationals permanent residency in exchange for $800,000 interest-free loans, to be repaid in five years, was discontinued in 2014. However, Quebec has its own version still in operation, but the windfall is substantially lower than the federal program.

Misinformation abound, the report elucidates how paltry the IIP’s impact was on real estate. 

“If you look at all the immigrant investors that came into B.C. in one year, if every one of them bought an above-average-cost house—maybe a home for a few million dollars—the total cost of that spending would have been $500mln in Metro Vancouver,” said Tansey. “There was $37bln of residential real estate transactions last year, and if you look at the 1,100 people from the Quebec version, it’s far too few of them to have an effect. The supply side issues are much more significant and I think it’s simple economics: If the number of new household formations in Metro Vancouver is higher than the rate of housing starts, and housing is already fully subscribed, you’re always going to have more people looking for homes than there are homes available, and it’s just going to drive up prices.”

Tansey moreover alluded to a joint report released by Canada Mortgage and Housing Corporation and Statistics Canada in December that claimed foreign buyer activity in Canada is, in fact, negligible.

“Domestic demand from Canadian residential investors, CMHC showed very clearly, is playing a very big role and nobody is quite sure what the effect of immigrant investors or foreign capital is, but CMHC makes it very clear it’s a much smaller effect compared to low interest rates, household formation and economic development.”

Copyright © 2018 Key Media Pty Ltd

GEORGE trades on livability and value

Simon Briault
The Vancouver Sun

GEORGE

Project location: 3010 St. George Street, Port Moody

Project size: 173 condos and 73 townhomes with one to three bedrooms; 657 to 1,292 square feet; condos starting from $489,900, townhomes starting from mid $800,000s

Developer: Marcon Developments

Architect: Shift Architecture Inc.

Interior designer: Gannon Ross Designs

Sales centre: 3001 St. Johns Street, Port Moody

Hours: noon — 5 p.m., Sat — Thurs

Telephone: 604-469-4036

Website: marcon.ca/george

Occupancy: spring/summer 2020

It’s no secret that Vancouver is regularly rated as one of the most livable places in the world, with breathtaking scenery, big city benefits and easy access to the great outdoors. As a result – and this is also no secret – it can cost you a good chunk of money to own property there.

But Nic Paolella, director of development at Marcon Developments, the company behind a new multi-family development in Port Moody, believes there are other options outside the city that offer similar levels of livability at a much more affordable price.

“People think that as you move further out, you get fewer amenities and things to explore and in some cases that’s true,” he says. “But Port Moody is one of those places in Metro Vancouver that has a unique character and identity that makes it a really livable place. It’s really starting to emerge as a community that has a lot to offer.”

“It starts with the advent of rapid transit,” Paolella added. “Port Moody has always been a small municipality with some great attributes, but the transit options like the new Evergreen Line for SkyTrain have really improved the accessibility of that community for young people and families.”

Marcon’s GEORGE is a new multi-family 246-home project located on either side of St. George Street. The development will consist of two six-storey condominium buildings with a total of 173 homes and 73 townhomes with one to three bedrooms.

“Being outside the city, it’s of course much more affordable,” Paolella said. “It’s also super livable. You have easy access to lots of different parks and opportunities for outdoor recreation. Within a few minutes, you can get into an amazing network of trails for hiking and biking. The core of Port Moody itself has some vibrant retail and commercial amenities already and that’s only going to increase, particularly in the Moody Centre neighbourhood where our project is located.”

The amenities, restaurants and stores already in place include Saint Street Grill, Rocky Point Tap House, The Boathouse Restaurant, Port Moody Station Museum, Starbucks, 7-Eleven, Namoo Sushi, Oxygen Yoga and Fitness, Aroma Indian Restaurant and Cake-Ya. GEORGE will be within walking distance of a brand new middle school and an elementary school.

“With the way the city of Port Moody plans to grow, you’re actually going to have more low-rise condos and townhomes a lot closer to transit stations than you see elsewhere,” Paolella said. “In Coquitlam and Burnaby, the lower-density homes are further away from transit because they’re prioritizing highrises near to the stations. It’s pretty unique that you can be living in a townhome and walk right out your door and be at the SkyTrain station in just a few minutes.”

Port Moody’s Rocky Point Park is also a short stroll away. Amenities include a recreational pier, a seasonal outdoor pool, a skateboard park, a playground, a spray park, wildlife viewing areas and opportunities to watch local artists doing their work. (Port Moody is known as ‘the city of the arts’.)

Paolella said he expects many more commercial offerings to be added to the Port Moody mix, along with more multi-family housing from high-end developers.

“We’re totally renewing the streetscape of St. George Street and at the same time, we’ll be doing a significant enhancement to Dallas Creek, which runs through the centre of the block,” he added. “This will involve restoring the creek and creating a preserved riparian area. With that, we’ll also be putting in a public pocket park as well.”

The homes at GEORGE will include all the luxury finishes and amenities you’d expect from a big-name developer. Buyers will get three colour patterns to choose from, nine-foot-high ceilings and laminate flooring throughout kitchens, dens, living and dining areas. The condos will have stacked, front-loading washers and dryers. In the townhomes, they’ll be side by side.

Kitchens feature appliance packages by Samsung: 32-inch refrigerators, 30-inch ranges with convection and self-clean ovens and 24-inch Energy Star dishwashers. There are three cabinet styles to choose from, quartz countertops, matte black faucets and under-cabinet recycling units. Bathrooms include Chelini under-mounted sinks, deep soaker tubs, frameless glass shower enclosures and solid quartz countertops.

Prices at GEORGE start at $489,900 and homes range in size from 657 to 1,292 square feet. Completion is expected in the spring/summer of 2020.

“Port Moody is so worth exploring,” Paolella said. “In today’s climate, where people are doing some careful research to find out what makes sense for them, this community has a lot going for it. Right now, I would genuinely tell people that if you’re looking for a home that has great value in a place that’s really livable, you should look no further.”

© 2018 Postmedia Network Inc.

CREA cuts home sales forecast as May sales reach 7-year low

The Vancouver Sun

The Canadian Real Estate Association is now expecting an even bigger decline in home sales this year as the latest statistics showed the crucial spring homebuying season came to a lacklustre end in May.

The industry association which represents about 100,000 real estate agents across Canada said Friday is forecasting home sales this year to fall 11 per cent compared with a year ago to 459,900 units this year.

This downward revision is from the 7.1 per cent decline the association forecasted in March.

CREA said the decrease reflects weaker sales in B.C. and Ontario, amid heightened housing market uncertainty, provincial measures aimed at cooling the market, high home prices, supply shortages and a new mortgage stress test introduced this year.

The stress test could have a heightened impact going forward since the central bank metric used to assess homebuyer’s eligibility inched up, raising the bar higher, said CREA’s chief economist Gregory Klump.

“Now with that qualifying mortgage rate having crept up … the stress test is expected to have a more binding impact,” he said in an interview.

The updated forecast on Friday came as CREA reported actual home sales in May hit a seven-year low as they fell 16.2 per cent compared with a year ago.

The national average price for homes sold in May was just over $496,000, down 6.4 per cent from a year ago. Excluding the Greater Toronto and Greater Vancouver areas, the average price was just over $391,100, down two per cent.

This drop in sales activity capped off the key spring homebuying season, as March, April and May are typically the most active months in any given year. National home sales activity in March and April were down 22.7 per cent and 13.9 per cent, respectively, according to CREA numbers.

Combined sales for the three-month period fell to a nine-year low, CREA said Friday.

The association on Friday again pointed the finger at a new stress test introduced at the beginning of the year for uninsured mortgages, which has cut the amount that certain homebuyers are able to qualify for.

“The stress test that came into effect this year for homebuyers with more than a twenty per cent down payment is continuing to suppress sales activity,” said CREA President Barb Sukkau, in a statement.

As of Jan. 1, the Office of the Superintendent of Financial Institutions requires buyers who don’t need mortgage insurance to prove they can make payments at a qualifying rate of the greater of two percentage points higher than the contractual mortgage rate or the central bank’s five-year benchmark rate. There was an uptick in sales at the end of 2017, as buyers looked to lock in mortgages before the revised underwriting guidelines took effect.

The bar was raised even higher in May when the central bank’s five year benchmark rate rose from 5.14 per cent to 5.34 per cent. The Bank of Canada uses the posted five-year fixed mortgage rates at the Big Six banks to calculate the benchmark rate. The central bank’s benchmark rate increased, in turn, after all the Big Six banks raised their posted five-year fixed mortgage rates in the preceding weeks, reflecting the higher borrowing costs associated with a recent rise in government bond yields.

Despite the double-digit decline, CREA’s latest figures support the notion that markets are stabilizing after the volatility at the beginning of 2018 related to the tightened mortgage rules introduced on Jan. 1, said TD economist Rishi Sondhi.

“On balance, this was a better-than-expected report,” he said in a research note. “Sales were effectively flat during the month — their best turnout so far this year. Meanwhile, listings increased for the third time in four months, pointing to somewhat improved confidence on the part of sellers as prices edged higher for the second straight month.”

CREA said it is expecting home sales activity to “strengthen modestly” in the second half of 2018, even though interest rates are expected to rise further.

It takes about six months after a new policy change for homebuyers to re-examine their options under new parameters, said Klump.

“They have to go shopping again in a new price point,” he said. “In part, the modest improvement in the second half of this year reflects the lifting of that uncertainty, as people re-evaluate how much a mortgage they can qualify for, what homes are in their price range.”

Also, in the large markets of Toronto and Vancouver, demographics such as strong immigration will continue to support housing demand and a modest recovery in the coming months, said Robert Kavcic, senior economist with BMO Capital Markets.

“The underlying fundamentals are actually quite still strong … Eventually we’re going to bottom out and see sales push higher again, but not to the kind of frothy levels we saw at one point in 2016 and later in 2017.”

© 2018 Postmedia Network Inc.

New Rules to Profoundly Change How REALTORS? Work With Consumers

BCREA

On June 15, 2018, changes to Rules under the Real Estate Services Act that dictate how REALTORS® work with consumers will come into effect. The Rules, mandated by the Office of the Superintendent of Real Estate (OSRE) and finalized on April 27, 2018, have been amended to ensure that REALTORS® make adequate disclosures, so that consumers can make informed decisions.

“BCREA, together with the Real Estate Council of British Columbia (RECBC), has been hard at work to update the Applied Practice Courses for new licensees. BCREA has also been updating its continuing education courses and nearly two dozen standard legal forms that have been impacted by the changes,” said British Columbia Real Estate Association (BCREA) CEO Darlene Hyde. “The new rules governing real estate practices mark a significant shift in how REALTORS® in BC work with their clients. It’s important that consumers know what to expect when the changes come into effect.”

REALTORS®, consumers and conflicts of interest One of the changes is a ban on dual agency. Dual agency occurs when a REALTOR® represents more than one party in a real estate transaction. That can be a buyer and a seller, two or more buyers, or a landlord and a tenant. The ban was recommended by RECBC’s Independent Advisory Group in 2016. Exemptions will be possible in limited circumstances. Under the prohibition on dual agency a real estate agent cannot represent two clients with competing interests at the same time. 

REALTORS®, consumers and compensation From June 15, REALTORS® are required to make more disclosures on the commissions they receive on transactions. Once the amendment comes into effect, a REALTOR® must give the seller a copy of the disclosure form before presenting each offer or counter-offer from potential buyers. This form explains how the commission will be shared with other brokerages involved in the transaction (the buyer’s brokerage) and any other payments the REALTOR® expects to receive as a result of the transaction. 

BCREA and the 11 member boards have been working with RECBC and OSRE to make these changes as seamless and as transparent as possible. We are actively working to educate REALTORS® on the implications of these changes so they can continue to serve consumers with integrity and professionalism when the Rule changes come into effect.

“These changes will profoundly alter for the foreseeable future the way consumers initially interact with their REALTOR® and the ban on limited dual agency will have a negative impact on consumer choice with respect to their selection of REALTOR® in some circumstances,” said Hyde. “BCREA has done its utmost to facilitate the transition to the new Rules and we stand behind a strong regulatory regime, informed and knowledgeable customers and professional REALTORS®.”

Copyright ©2018 BCREA

Blockchain, a secure digital record keeping

Ian Martin
REP

Blockchain technology is popping up everywhere and rightfully so. From start-up venture to public blue-chip companies, vast resources are being channeled toward implementing a blockchain strategy.

You can spend days, weeks researching how blockchain is going to change business modeling, in particular commerce. There is a lot of deja-vu happening going back to the late 1990’s when entrepreneurs and businesses were chasing how to embrace the new internet. The race is on and we’re still in the very early days.

First off, let’s make one thing absolutely clear: do not confuse blockchain with cryptocurrency. There are over a thousand cryptocurrencies that have been born, and it is because of these that blockchain technology has surfaced.

So what is blockchain?

Blockchain is a secure, open platform technology where digital records can be stored, shared and verified without the threat of fraud or tampering.

It is a huge game changer in how commerce, record keeping, content, manufacturing, voting, identity, etc. will be managed and verified. The commonality in all of these applications is that blockchain will provide the ability to exchange at a faster frequency with 100% security, at lower cost, 24/7. Delivering on this vision is what is being figured out right now, hence the race to define the industry’s future leaders.

Within real estate, there are multiple blockchain application possibilities. To start, there is the transfer of property between a buyer and seller. This involves a financial transfer of funds, title transfer, legal conveyance, mortgage financing, strata and condo records, appraisals, assessments, land surveys, and inspections. For the majority of transactions, there is also the listing and sales processing through the real estate boards, currently operated through the MLS. All of this is just surrounding the exchange of property.

Other real estate related applications are data sources, government records, land development, ordinances, assemblies, refinancing, zoning, licensing, regulators…the list goes on. I can confidently state that as an industry, we all believe there’s room for greater efficiency across these departments and applications. Each require verified access to data and record keeping, and if they can be faster, at less cost, available anytime, without the threat of tampering, it’s hard to argue against that.

An associated term you will hear often is what is called ‘smart contracts’. Smart contracts are the security around each transaction, allowing for full transparency without the threat of tampering or fraud. In a real estate transaction, blockchain will provide the proof of ownership and smart contracts will process the transfer of assets with reduced threat of litigation. Access to this information can be made available to anyone, or encrypted should you wish to limit access.

So, who are the first movers in real estate looking to claim ground in the blockchain revolution? Venture capital is hovering and placing their bets. Governments and small to large companies around the world are embracing blockchain technology. The UK government plans to move the country’s land registry to blockchain by 2022. In the U.S., entrepreneurial companies like Propy, Imbrex, ShelterZoom, Ubitquity, Smartrealty and Harbor are all out of the starting blocks looking to carve out their position in real estate with various business models. Digitizing land titles, sales transactions, government records, MLS, fractional real estate investments are all on the horizon.

In Canada, Polymath out of Toronto is building an exchange platform using blockchain to securitize investment assets including real estate into security tokens (ST’s). These are different than utility cryptocurrencies like Bitcoin or Ether because they will be regulated and backed by an investment asset, then traded amongst retail and institutional investors.

In Vancouver, there’s start-up IMBY, who are looking to tokenize real estate property and then make it available for consumers to buy and sell within an exchange platform. Canada currently sits third in the world in blockchain start-ups, but keep in mind, as Canadians we tend to be very methodical and particular on regulations. Hence, slow to adopt.

For any new blockchain company in real estate, it will take investment and ingenuity to educate and convince government authorities and industry stakeholders to trial, support and adopt. What we have learned in real estate, particularly in Canada, is that embracing change and adopting technology can be challenging, but worthwhile. This is where entrepreneurial companies will excel as they seek to solve these challenges that will make processes better, faster and cheaper.

The eventual winners will be those that demonstrate and provide the most trust in their brand promise. Keep in mind, that big companies like IBM, Microsoft, Amazon, Google, etc. are all massively investing in blockchain technology to keep ahead and remain relevant. It is and will be the next big business revolution. It’s exciting to follow and I’m sure the next Facebook, AirBnb or Expedia is incubating right now.

Copyright © 2018 Key Media Pty Ltd

Dual agency is coming to an end

BCREA

On June 15, 2018, changes to Rules under the Real Estate Services Act that dictate how REALTORS® work with consumers will come into effect. The Rules, mandated by the Office of the Superintendent of Real Estate (OSRE) and finalized on April 27, 2018, have been amended to ensure consumers have a thorough understanding of their relationship with their REALTOR®, particularly when it comes to conflicts of interest and remuneration.

“Since the new Rules were finalized six weeks ago, BCREA has been hard at work to update our Applied Practice Courses for new licensees, continuing education courses and nearly two dozen standard legal forms that have been impacted by the changes,” said British Columbia Real Estate Association (BCREA) CEO Darlene Hyde. “The new rules governing real estate practices mark a significant shift in how REALTORS® in BC work with their clients. It’s important that consumers know what to expect when the changes come into effect.”

REALTORS®, consumers and conflicts of interest One of the changes is a ban on limited dual agency. Limited dual agency occurs when a REALTOR® represents more than one party in a real estate transaction. That can be a buyer and a seller, two or more buyers, or a landlord and a tenant. The ban was recommended by the Real Estate Council of British Columbia’s (RECBC) Independent Advisory Group in 2016. Exemptions will be possible in limited circumstances.

As part of the Rule amendments, a REALTOR® will inform a consumer at the beginning of their working relationship that the REALTOR® may be required to stop representing the consumer mid-transaction if a potential conflict of interest arises. A conflict of interest can occur, for example, when a buyer who the REALTOR® has previously represented makes an offer on a property belonging to a seller the REALTOR® is currently representing. In such instances, the REALTOR® may be required to refer the seller to another REALTOR®.

REALTORS®, consumers and compensation From June 15, consumers can expect that REALTORS® will make more disclosures on the commissions they receive on transactions. Consumers are most likely to notice the impact of this Rule change when it comes to multiple offer scenarios.

Once the amendment comes into effect, every time an offer or counter-offer is made to a seller, the seller’s REALTOR® will be required to present the seller with a completed disclosure form that explains exactly how much remuneration the REALTOR®’s brokerage will receive.

This form will also explain how the commission will be shared with other brokerages involved in the transaction (the buyer’s brokerage) and any other payments the REALTOR® expects to receive as a result of the transaction. 

BCREA and the 11 member boards have been working with RECBC and OSRE to make these changes as seamless and as transparent as possible. We are actively working to educate REALTORS® on the implications of these changes so they can continue to serve consumers with integrity and professionalism when the Rule changes come into effect.

“These changes will profoundly alter for the foreseeable future the way consumers initially interact with their REALTOR®,” said Hyde. “BCREA has done its utmost to facilitate the transition to the new Rules and we stand behind a strong regulatory regime, informed and knowledgeable customers and professional REALTORS®.”

For more information on the Rule changes, visit Council’s Knowledge Base.

Copyright ©2018 BCREA

The Teranet-National Bank National Composite House Price Index has confirmed stabilization

Steve Randall
Canadian Real Estate Wealth

A national measure of home price variations has confirmed stabilization following a downward trend through the second half of 2017.

The Teranet-National Bank National Composite House Price Index was up 1.0% in May compared to April, almost in line with the 1.1% average monthly gain for May during the past 20 years.

Victoria led the gains (1.8%) followed by Ottawa-Gatineau (1.7%), Toronto (1.3%), Winnipeg (1.3%) and Vancouver (1.0%).

There were also increases for Edmonton (0.7%), Quebec City (0.6%), Hamilton (0.4%), Calgary (0.4%) and Montreal (0.3%) while Hamilton saw no change.

“It is true that this stabilization was accompanied by a shift of price momentum in favor of condos in Toronto and Vancouver. Given the high price level for other types of dwellings in these cities, rising interest rates and tighter mortgage underwriting standards, this shift should not be surprising,” the report says.

However, it notes that there has not been a decline for other property types in these markets. Elsewhere, markets have regained most of the ground lost in the first quarter.

“Given that interest rates are likely to continue to increase, a relapse of home prices over the next few quarters cannot be ruled out. But their resilience so far suggests that price declines would then be limited in scope,” the report adds.

The index shows percentage gains and losses based on an index value of 100 in June 2005.

Copyright © 2018 Key Media Pty Ltd

Coco Oakridge to take its place in a revitalized Vancouver neighbourhood

Mary Frances Hill
The Province

Coco Oakridge

What: 57 one- to three-bedroom homes

Where: 5733 Alberta Street

Residence sizes and prices: One to three bedrooms, 520 to 1,610 sq. ft, one-beds from $819,900; two-beds from $1,299,900; three-bed townhomes from $1.8 million

Developer and builder: Keltic Canada Development

Sales centre: 5844 Cambie Street

Hours: noon — to 5 p.m., Sat — Thurs

Telephone: 604-428-7533

What makes a vibrant, healthy community? Variety, for starters. A great community is one where anyone of any background can feel at home. At Keltic Canada Development’s Coco Oakridge, a condo community planned for Vancouver’s Oakridge area, Cristina Oberti’s design team therefore created interiors with a universal appeal. “Variety is essential for creating diversity in a community, particularly when it comes to designing for emerging districts and neighbourhoods,” says Oberti, principal of Cristina Oberti Interior Design Inc.

Coco Oakridge will be a high-end project that appeals to professionals and young families who need an urban lifestyle, but prefer to live a “more relaxed lifestyle, beyond the downtown core,” she says.

The project that will include 57 homes is a boutique offering compared to some of the neighbouring residential buildings planned for the area. The revitalized surrounding Oakridge community will comprise 10 towers scaling up to 44 storeys, housing for residents of varying incomes and plenty of amenities and green space.

While the name of the project is a play on Cambie-Oakridge, according to marketer Dave Bauman of Magnum Projects, Oberti says the style of famed women’s wear designer Coco Chanel, known for her chic tailoring, was also a huge influence in her choices of finishes and materials.

“When most people think of Coco Chanel and her designs, they think of classic silhouettes and clean lines,” Oberti says. “But above all, Coco Chanel was a modernist. It was this aspect of her talent that we wanted to highlight in our work [in the interiors].”

Oberti opted to go for uncomplicated silhouettes and resilient, understated materials. “We chose straight, angular forms and coupled them with contrasting materials such as wood, marble and stone. The variations in the wood and stone finishes add a sense of luxury while also providing softness to the otherwise structured furnishings, almost like fabric [would].” That variation is reminiscent of the materials and fabrics of Coco Chanel’s own creations, which have been hailed for their utility and integrity.

Bathrooms include marble vanity countertops, herringbone wall tiles and marble shower bases.

Oberti also chose luxury brands Scavolini and Gaggenau for the suites’ kitchens and bathrooms, brands are favoured for their understated durability and elegance.

“Both brands put design at the forefront of what they do, so although their products are primarily functional and serve very specific purposes, they nevertheless are beautiful to look at,” she says.

© 2018 Postmedia Network Inc.

The ban on B.C. real estate agents “double ending” comes into force Friday June 15

Joannah Connolly
Western Investor

Strict rules in B.C. starting Friday June 15 to give buyers, sellers more transparency

The ban on B.C. real estate agents “double ending” – representing both a buyer and a seller in a real estate transaction  – comes into force Friday June 15, along with other strict regulatory changes.

The practice, known in the industry as limited dual agency, also includes agents representing two or more buyers vying for the same property, or rental agents representing both a landlord and a tenant. The ban on limited dual agency aims to avoid conflicts of interest when the agent is working on behalf of their client.

The new rules also may require agents to stop representing a client if other possible conflicts of interest occur. For example, if a potential buyer makes an offer on a property listed by an agent who has previously represented that buyer, the agent may have a conflict of interest and be required to refer the listing to another agent. This conflict could mean the listing agent potentially has confidential information about both the seller and the buyer.

Darlene Hyde, CEO of the British Columbia Real Estate Association, said in a statement, “The new rules governing real estate practices mark a significant shift in how REALTORS® in B.C. work with their clients. It’s important that consumers know what to expect when the changes come into effect.”

Realtors will also be required to let their clients know exactly how much commission they will receive, each time an offer is received on a listing. This means that in multiple-offer situations, with every offer that comes in to the seller, the agent will have to submit a disclosure form detailing how much commission they would receive were the offer accepted. This form will also have to include how the commission would be split with the buyer’s agent, plus any other payments the agent expects to receive.

Hyde added, “Since the new rules were finalized six weeks ago, BCREA has been hard at work to update our Applied Practice Courses for new licensees, continuing education courses and nearly two dozen standard legal forms that have been impacted by the changes. We stand behind a strong regulatory regime, informed and knowledgeable customers and professional REALTORS®.”

Agents confused

Not all agents have been as supportive, with some calling for adjustments to the rule changes when they were announced in February, which resulted in the Office of the Superintendent of Real Estate postponing implementation from March 15 to June 15.

Residential agents have expressed confusion over which of their team members they are allowed to refer a listing to, should they have to recuse themselves over a conflict of interest. 

“Everyone is so confused,” said Matt Kerr, an agent with Re/Max Real Estate Services in Vancouver, back in February. “I have also heard that there has to be a physical wall in the office between you and any agent you recommend to a former client. It is bizarre.”

The new rules are particularly onerous in smaller markets, where longtime agents may have worked with many local buyers, said Sunshine Coast real estate agent Gordon Clayton of Re/Max Oceanview Realty in Sechelt.

Commercial real estate agents are also particularly concerned because the legislation would prohibit an agent from selling a property to a potential buyer with whom they have had dealings in the past.

That wouldn’t work in the tight-knit commercial real estate market, Ron Emerson, a veteran commercial real estate agent with Cushman & Wakefield in Vancouver, said in February.

He said that, unlike the housing market, commercial real estate involves a much smaller group of buyers and sellers, and agents often deal with the same parties repeatedly.

“Imagine how that would work for a company like Beedie Development Corp., as an example,” he said. “Everyone has worked with them at some point because they are one of the largest landlords in Metro Vancouver and the Fraser Valley. It just doesn’t make sense.”

However, the rules have not been amended to exclude commercial transactions or those serving niche markets since those complaints were made. The RECBC website makes it clear: “The Real Estate Services Act and the new rules do not distinguish between residential and commercial real estate transactions.”

It adds, “Regardless of whether you specialize in marinas, ranch lands, mobile homes, supermarkets or other kinds of specialty properties or niche markets, the agency and disclosure rules will apply to the services you provide.”

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