Investigations into money laundering in real estate and concerns over other shady property practices have led the B.C. government to hand regulatory oversight for the industry to a different organization.
Instead of being overseen by the Office of the Superintendent of Real Estate and the Real Estate Council of BC, the BC Financial Services Authority (BCFSA) is to become the single regulator for real estate.
The BCFSA, which officially became a Crown agency on November 1, is already in charge of regulating mortgage brokers, private pension plans and financial institutions.
The B.C. Ministry of Finance said in a statement November 12, “By including real estate regulation within the responsibility of the BCFSA, the Ministry of Finance is simplifying and integrating regulation of the B.C. financial services sector, resulting in increased consumer confidence and opportunities to streamline investigations and enforcement.”
The recommendation to create a single real estate industry regulator, to prevent problems falling through the cracks, was central to both the Real Estate Regulatory Structure Review of September 2018 and the Expert Panel on Money Laundering Report of May 2019.
The existing regulatory system was previously described as “Swiss cheese” by the boss of the B.C. Real Estate Association — meaning that it had so many holes, it had become easy for money launderers or other unscrupulous people to take advantage.
The new integrated regulatory system aims to better protect the public by closing those gaps, according to the ministry. Finance minister Carole James stated, “Buying a home is one of the most significant purchases people make in their lifetime, and by working together, the BC Financial Services Authority, Office of the Superintendent of Real Estate and the Real Estate Council of BC can combine their expertise to better protect consumers.”
Both the Office of the Superintendent of Real Estate and the Real Estate Council of BC — which are currently responsible for real estate licensing, conduct, investigations and discipline — will be “integrated” into the BCFSA.
Both organizations said that they welcomed the move to streamline real estate regulation, and the opportunity to work together for the benefit of the public.
Elain Duvall, chair of RECBC, said, “Today’s announcement is good news for both real estate consumers and the sector as we combine expertise in one regulator. As we work towards the establishment of a single regulator, public protection will continue to be the Real Estate Council of British Columbia’s primary focus.”
The Ministry of Finance said it is hoping to bring forward legislation for the changes in fall 2020, with the completed integration of the financial services and real estate regulator not anticipated until spring 2021.