The Premier just announced at 12:45 that they government will be taking action based on the report delivered on the industry yesterday.
A few major highlights:
- DUAL AGENCY will be abolished
- REC will be dissolved and regulation assumed by the SUPERINTENDANT OF REAL ESTATE.
- FINES will be increased to $250k for Realtors and $500k for brokerages.
If you are on a TEAM, the announcement on Dual Agency will likely cause the most issues… but remember, that old “sub-brokerage” model… some thought should be given again to that structure (now… in combination with designated agency) for larger teams where the new dual agency prohibitions will be an issue.
Given the tone of the news conference, more announcements are forthcoming.
Love to chat more, but it’s the end of June and I got files to close,
As Dorie the realtor would say… Just keep listing… listing… listing
Kelowna Real Estate Lawyer, Peter Borszcz
Effective today, the province has introduced new regulations governing Realtors. They didn’t change the law of the contract (where assignments are expressly allowed under the Law and Equity Act), but require that more drafting and disclosure be made by Realtors.
All Realtor drafted contracts (residential and commercial) should contain the following:
- this contract must not be assigned without the written consent of the seller; and;
- the seller is entitled to any profit resulting from an assignment of the contract by the buyer or any subsequent assignee..
(Note: These are the official statements and I note this “drafting” is quite poor, some contractual definition of PROFIT and ASSIGNEE is required).
In the event these terms are NOT in the contract the Selling Licensee is required to disclose this to the Seller in writing with the following form:
There remains a discussion to be had on how this effects Limited Dual Agency –the presence or absence of the “Assignment Provisions” may in some factual circumstances relate to a discussion of a party’s “motivation”… if that is the case, the Realtor should consider whether LDA is a viable option (note: in my opinion, I think we are also going to see LDA rule changes arising out of the committee work that is currently ongoing).
The REC council FAQ is a great source of more detailed info:
Have a great week!
This week I had the pleasure of working with a great group of first time home buyers. They were looking an older home in a very desirable area of Kelowna. This home was one of only a small handful of properties in their price range in the area, so it was a true “diamond in the rough”.
When the home inspection revealed that there was a modest amount of mould in the attic due to a detached bathroom vent, the buyers were heartbroken.
(note: above picture illustrative only)
Lawyers are not home inspectors or contractors and therefore we cannot provide professional advice on the “quality of a premises”. Together with their professional Realtor, we recommended an secondary air quality inspection.
It is important to remember that all home inspectors are generalists, where the home inspection reveals a potential issues, Buyers should be encouraged to get secondary professional advice on that issue to manage and quantify the problem.
The results of the air quality test showed that the mould issue was not extending beyond the small area of the attic space and that the home’s air quality was good. The first time home buyers were, of course, elated, and along with their thanks shared a bit of their celebration with the firm…. as they sabre’d a bottled of bubbly… congrats guys 🙂
Written by Kelowna Real Estate Lawyer Peter Borszcz
Here in Kelowna there are several reasons an individual may require a Power of Attorney (POA) when preparing to sell his or her property. A Power of Attorney is a legal documents that grants to a person (sometimes called the “Attorney”) the right to sell and dispose of the assets of the Donor (the person granting the power of attorney). Although there are many circumstances where a Power of Attorney can be useful, some of the most common situations are:
- families where spouses are working overseas/ out of town (including military duty)
- adult caregivers of elderly persons needing to manage their everyday financial and property affairs
- real estate agents who act under the terms of a specific and limited Power of Attorney to complete a real estate deal (for example when their clients are on vacation)
When the time comes to transfer land using a POA, a lawyer is going to be looking for certain criteria in order to establish the validity of the POA.
- ascertaining the true identity of the parties involved;
- make inquiries to ensure the POA has not been revoked;
- ensuring that the ORIGINAL must be filed with the Land Title Office with a DF#;
- ensuring that the POA was properly witnessed by an OFFICER under s.42(3) of the Land Title Act;
- ensuring the POA has sufficient powers to transfer land; and,
- ensuring that the attorney must be at least 19 yrs old.
The flexibility of allowing another person to make financial and legal decisions for someone else can make Power of Attorney a useful tool in real estate transactions. Contact email@example.com to find out more.
Effective Feb. 17, 2016:
- Newly Build Home Exemption:
- housing up to $750,000 will be exempt from Property Transfer Tax.
- Details: http://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/understand/exemptions/newly-built-home-exemption
- New Tax on High Value Transfers:
- The Property Transfer Tax rate will increase from 2% to 3% on the portion of fair market value over $2 million.
This generally refers to ASSIGNING a contract, which is a legal process whereby Purchaser #1 “sells” its contract to Purchaser #2.
This is legal because, once subjects are removed from the deal (and the contract is binding), the Purchaser has an equitable interest in the property from that date. This can occur months in advance of closing. The Purchaser (with binding contract in hand) then will gain if the property appreciates OR will lose if the property depreciates. (In the Kelowna real estate market I have seen both occur)
It is also this equitable interest that allows Purchasers to sue for specific performance of real estate contracts and demand conveyance of the property to them if a Seller refuses to complete.
Altering this principal of British Columbia real estate law would dramatically change many aspects of real estate law in this province and would not be prudent legislative policy. A better practice would be for real estate buyers and sellers to work with all their professional advisors – lawyers, realtors, appraisers and accountants – early in the process to get well rounded independent advice.
Written by Kelowna Real Estate Lawyer Peter Borszcz