Advisory

PurposePermanent link to this section

BC Financial Services Authority is releasing proposed amendments to the Real Estate Services Rules (the “Proposed Amendments”) for public and licensee comment. The Proposed Amendments are intended to update the real estate services administrative penalty framework (the “Administrative Penalty Framework”) set out in Sections 26 and 27 of the Real Estate Services Rules (the “Rules”).

The primary focus of updating the current Administrative Penalty Framework is to:

• Include unlicensed activity;
• Ensure compliance with BCFSA investigations; and

• Ensure required disclosures are provided properly.

The Proposed Amendments would not change licensing requirements under the Real Estate Services Act (“RESA”) nor any licensee obligations.

The Proposed Amendments are intended to speed up the outcomes of compliance and enforcement processes – they will allow BCFSA to increase its focus on more complex cases while ensuring that contraventions are responded to in a fair, consistent, and proportionate way.

BCFSA is seeking feedback on the Proposed Amendments. Comments can be submitted through the Consultation Feedback Form. The consultation period will close on November 26, 2023. Additional information is available on the Consultation page. If the Minister of Finance consents to the Proposed Amendments, BCFSA intends to bring the Proposed Amendments into force in July 2024. 

Background Information Permanent link to this section

The Proposed Amendments would amend the Rules to:

• Create two new categories of Administrative Penalties, capturing failures by unlicensed persons and licensees to comply with BCFSA investigations, and unlicensed and related restricted activity¹;

• Add contraventions with respect to the improper use of required disclosures; and

• Expand the list of infractions eligible for Administrative Penalties that fit within the parameters of existing categories B, C and D in s. 26 of the Rules.

The Administrative Penalty Framework is an important part of the progressive disciplinary regime established by RESA. Administrative penalties are an intermediate step between a letter of warning and formal discipline proceedings. Administrative penalties are intended to encourage compliance with the regulatory framework and be an efficient, proportionate response to less serious contraventions. Before levying an administrative penalty, the Superintendent of Real Estate must be satisfied that a person has contravened a provision of RESA, the Regulations, or the Rules.

The current Administrative Penalty Framework, created by Sections 26 and 27 of the Rules, has four separate categories of administrative penalties with increasing penalty amounts that correspond to the level of risk or harm to the public. The designation of a provision in the Administrative Penalty Framework does not mean each contravention will automatically be resolved by an administrative penalty. BCFSA has the discretion to assess non-compliance and to determine the most appropriate enforcement process and action.

Amendments to RESA in August 2021 (the “2021 RESA Amendments”) added flexibility to the Administrative Penalty Framework by allowing BCFSA to amend the Rules to expand the use of administrative penalties for contraventions of RESA and the Regulations. Previously, only Rules contraventions were eligible for an administrative penalty and only licensees were subject to administrative penalties. Updating the Administrative Penalty Framework will enable BCFSA to enhance its efficient, effective, and proportionate disposition of RESA contraventions, including those by unlicensed individuals.

During Spring 2023, BCFSA established a technical working group of leaders from B.C. real estate organizations who provided feedback on proposed changes. Feedback from the technical working group helped inform our work.

Need for and Effect of Proposed Rules Permanent link to this section

Unlicensed activity puts consumers at risk and the need for general deterrence is high. Adding administrative penalties as a tool to enforce licensing requirements will help British Columbians have confidence in the real estate services they receive. The Proposed Amendments support a regulatory system which gives the public confidence that individuals who provide real estate services have received proper training and are competent to practice and will be penalized if they breach the requirements.

Uncooperative individuals can significantly delay investigations, increase enforcement costs, and obscure evidence. Establishing an administrative penalty for failing to cooperate with BCFSA investigations will provide additional tools to ensure cooperation.

The 2021 RESA Amendments provide broad flexibility for BCFSA to use administrative penalties for unlicensed activity and licensee contraventions. BCFSA may, by rule, designate contraventions of specific provisions of RESA, the Regulations, or the Rules as being subject to administrative penalties and establish the penalty amount that may be imposed.

Given the volume of complaints received by BCFSA, updating the Administrative Penalty Framework enables additional tools to resolve a broader set of contraventions and supports efficient processing of complaint files. Administrative penalties also provide more predictable outcomes for certain types of infractions.

Additional Information Permanent link to this section

For more information on the Proposed Amendments, please see the annotated Rules. BCFSA has developed a Discussion Paper that provides comprehensive information on the Proposed Amendments. Comments can be submitted through the Consultation Feedback Form. The consultation period will close on November 26, 2023.

Additional details about the current public consultation opportunity can be found on the Consultation page.

^{1 “Restricted activity” relates to activity by a licensee that may facilitate unlicensed activity or be similar to unlicensed activity. Examples of “restricted activity” include: an individual providing real estate services while their licence is suspended or in a category for which they are not licensed; or, a brokerage making payments to unlicensed persons or to a licensee that is licensed to another brokerage.}