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Real estate complaints surge Vancouver Sun


Blog by Ian Watt | December 13th, 2007


 
Derrick Penner
Vancouver Sun

The Real Estate Council of British Columbia received a record number of complaints from the public in 2006-07, and during this calendar year has punished a record number of realtors for misconduct.

As of this week, the council, the self-governing body for the province's realtors, had handed out 90 penalties that include reprimands, fines, licence suspensions of up to 180 days and outright licence cancellations. That number was up nearly 50 per cent from the 65 disciplinary decisions handed down in 2006.

Four realtors voluntarily gave up their licences this year in order to avoid disciplinary action.

The most serious misconduct uncovered by the council included misappropriating money from trust accounts, forging signatures on documents, as well as falsifying offers and failing to properly manage brokerage business.

The rising number of complaints can likely be traced back to B.C.'s hot real estate markets, according to Maureen Coleman, the council's senior compliance officer.

"There has been a record number of real estate transactions throughout the province in recent years," Coleman said.

"So the more deals that are written, the more opportunities there are for things to go wrong, or for things to be misunderstood by the consumer."

Public complaints in the council's 2006-07 reporting year, which ended June 30, hit 543, an 18-per-cent increase from the previous year, and a whopping 76 per cent more than the 308 complaints it received in 2004-05.

Coleman added that some of the increase can be attributed to the council's efforts to make the public more aware of its role.

The council only took over full disciplinary authority for realtors from the provincial Financial Institutions Commission (FICOM) in 2005.

Coleman said the council cracks down hardest on financial matters, even meting out suspensions to realtors who are simply late putting deposit cheques into their brokerage's trust accounts.

"One of our primary concerns is consumer protection," Coleman said. "Protection of trust money is absolutely at the top of the list."

Misappropriating money in trust accounts figured in the case of Debra Jo Acheson, with the Delta firm Dedicated Property Management.

Acheson's licence to be a strata manager was cancelled, according to the council's decision, because she misappropriated funds held for her own use and deceptively took money from the term investments of clients and deposited it into trust accounts, characterizing them as owner contributions to the accounts.

Chilliwack realtor Chrystale Ashworth had her licence suspended for a year on a misappropriation allegation, but also for negligence and incompetence in providing real estate services. She was also ordered to pay $13,728 in council enforcement costs.

Ashworth appealed the council's decision to the Financial Services Tribunal, but instead of overturning the decision, the tribunal increased the suspension period to 16 months.

In its most recent batch of decisions, the council suspended Vancouver realtor Paul Song Wu's licence for 180 days for forging a sales contract in the name of another agent at his brokerage without that agent's knowledge, and faking a purchase offer in the name of a fictitious person, which he then signed using the fake name.

Wu then presented the fake offer to his client and advised the client not to make a counter-offer, hoping he wouldn't be found out.

Earlier this year, Wu had his licence suspended for 60 days for misconduct, negligence and incompetence.

Coleman said the council refers any complaints that involve criminal activity to FICOM, which has the power to conduct criminal investigations.

"Percentage wise, [criminal matters] are not a big percentage of our complaints," she added. "If we would have five complaints forwarded to FICOM in a year, that would be a reasonable ballpark."

Coleman said dual agency, where a realtor acts for both the buyer and seller of a property in a transaction, has been one of the council's biggest sources of complaints.

Although it sounds like a conflict of interest, B.C.'s real estate legislation allows a realtor to act on both sides, as long as they remain neutral.

And it is one reason that the council has made a course on understanding dual agency a required part of its mandatory professional development program for realtors.

Coleman added that cases where a realtor becomes a part of the transaction, either buying or selling, and doesn't withdraw from representing the other party or at least advise the other party to get independent advice, is another area where realtors commonly run afoul of the rules.

"As a principal to the transaction, it's impossible that you would be neutral to your own interests," Coleman said.

More common complaints, she added, are cases where realtors fail to disclose information about properties that could be considered material to a transaction, such as whether or not a house was used in a marijuana growing operation, or once had an oil tank in the back yard.

While complaints have been on the rise over recent years, Coleman said that since the end of June, which is the commission's fiscal year-end, complaints seem to have levelled off, and she anticipates to have received a similar number by June of next year.

depenner@png.canwest.com

RECORD DISCIPLINE

More transactions in B.C.'s hot real estate markets have meant more troubles. The Real Estate Council of B.C., the realtors' self-governing body, has logged a record high number of complaints in the 2006/07 reporting year, which ended June 30. And in calendar 2007, the council meted out a record number of disciplinary penalties. The numbers are below.

Complaints

(RECBC year-end June 30)

2006/07: 543

2005/06: 461

Disciplinary penalties

(Calendar year)

2007: 90

2006: 65

2005: 60

2004: 63

Source: Real Estate Council of British Columbia

ONLINE

For the list of all 90 disciplinary decisions, visit: http://www.recbc.ca/complaints/disciplinary-2007.htm