Real estate reforms put consumers first
B.C. eliminates dual agency to protect buyers and sellers, write Micheal Noseworthy and Robert Holmes.
Consumer rights are fundamental to society, and strong consumer-protection regimes help build and sustain a healthy economy.
B.C. is about to enter a new era of strengthened consumer protection in real estate. Under new rules in effect starting today, real estate agents can no longer act for both a buyer and a seller in the same deal.
It’s a simple but fundamental change that will have profound benefits for consumer protection.
By banning this practice, called “dual agency,” we’re eliminating conflicts of interest that until now have been tolerated in the real estate industry. As regulators with a consumer-protection mandate, our goal is for every homebuyer and seller to feel confident that the real estate agent representing them is focused on achieving their individual goals and best interests.
As regulators, we’ve seen the downside of dual agency: sellers who worry that they sold for too little, buyers who feel they may have paid too much, clients who suspect that their dual agent may have unfairly given the other client more information or advice than they received.
Even when dual agency is done right, with integrity and good intentions, each party gets less advice and fewer services than if they were separately represented. Real estate consumers have a right to expect more.
Think back: Just two years ago, controversy erupted about the real estate industry in B.C. Allegations of unethical conduct by real estate agents were making headlines. The public was furious at the suggestion that industry insiders were lining their own pockets and driving up property prices.
The Real Estate Council asked an independent group of experts to examine the issue and suggest solutions.
Their verdict? A few bad agents were damaging the reputation of the vast majority of dedicated, well-trained and committed industry members. There was a troubling lack of transparency in the industry. Regulation was not seen as effective. Penalties for misconduct were small and considered simply as part of the “cost of doing business.” And dual agency was “fundamentally inconsistent” with the undivided loyalty agents are supposed to owe their clients.
Real estate consumers, the group argued, needed more information to make truly informed decisions about the biggest transactions of their lives.
The industry needed more effective regulation, and more significant penalties for real estate agents who breached their duties. In particular, the group strongly recommended that dual agency be banned in B.C.
The suggested reforms were immediately endorsed by government and the opposition. Industry groups voiced their support.
“The proposed changes are progressive and we support their speedy implementation” said the Real Estate Board of Greater Vancouver.
The B.C. Real Estate Association called it “a welcome step in increasing consumer protection.”
After extensive, further consultations, the superintendent of real estate has now put these recommendations into rules that will be enforced by the Real Estate Council of B.C.
An exemption to the ban has been established for remote locations where it’s simply not feasible for buyers and sellers to be represented by two separate real estate agents. In that situation, the exemption allows dual agency so that consumers at least have access to limited representation.
As these reforms take effect, B.C. will be a leader across North America in consumer protection. As a seller, you’ll know your agent is working to get you the best price. When you’re buying, you can be confident your agent’s only goal is to get you the home you want at a price you can afford.
There’s more ahead. We are continuing to work at restoring consumer confidence in real estate. We will, of course, consult with government and industry.
Your views are important, too. We welcome your feedback on these new measures, and on our work to ensure all real estate consumers are well-protected and able to count on knowledgeable real estate agents working in their best interests.