Administrative Penalties Expanded
TAGS: Administrative Penalites Real Estate Council of British Columbia
Today, the Office of the Superintendent of Real Estate (OSRE) and the Real Estate Council of British Columbia (RECBC) announced changes to the Real Estate Rules to expand the use of administrative penalties (APs). OSRE first proposed these rule changes in September 2020, in a consultation that attracted nearly 600 responses - including a detailed submission from BCREA and all BC real estate boards.
These changes take effect on February 1, 2021. From that date, the number of contraventions subject to APs will double. These Rule changes don't introduce any new requirements; they just change what's eligible for APs and the amount of penalties that can be charged. APs will be sorted into four categories:
Category A - mostly business management infractions with low risk of harm to consumers and generally easily substantiated. First contravention, $1,000; subsequent, $2,000.
Category B - generally minor matters with no or immaterial harm to consumers, and where imposing an administrative penalty is in the public interest. First contravention, $2,500; subsequent, $5,000.
Category C - substantial duties licensees owe to clients and non-clients (e.g., section 3-3 of the Rules). First contravention, $5,000; subsequent, $10,000.
Category D (daily) - mostly minor matters that present a low risk of harm to consumers, and which have a time element. First contravention, $1,000; subsequent, $2,000. Plus, potentially $250 each day or part of a day to a maximum of $50,000.
In addition, section 3-4 of the Rules has been changed to separate acting honestly from reasonable care and skill. This will allow contraventions relating to reasonable care and skill to be eligible for administrative penalties and contraventions relating to honesty to be treated more severely.
What it means for REALTORS®
At a high level, the regulators expect expanded APs to speed up RECBC's discipline process and lead to more predictable outcomes for licensees. It should also mean that RECBC can devote more resources to serious infractions.
For an individual licensee, these are five key takeaways:
- Before RECBC levies an AP, it will use the Administrative Penalty Guidelines to make sure APs are appropriate.
- The expanded APs only apply to contraventions starting on February 1, 2021; that is, these changes don't apply to existing breaches of the Rules without the consent of the real estate professional.
- If you're found to contravene a Rule subject to APs, and you don't breach that Rule again over the course of five years, it will be removed from your record. If you are found to have breached the same Rule within five years, this will be a subsequent contravention and the higher penalty will apply.
- Within 14 days of when an AP decision is issued, a licensee can ask RECBC to reconsider the penalty.
- After reconsiderations are resolved, AP contraventions greater than $1,000 will be published on the Decision page of RECBC's website for five years.
For more information, check out these resources from the regulators:
- AP fact sheet,
- Regulators' news release,
- RECBC Administrative Penalty Guidelines (explain the process and the criteria),
- RECBC publication policy, and
- Results of the public consultation.
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