Submitted by:
REAL ESTATE COUNCIL OF BRITISH COLUMBIA
JULY, 2005
The Real Estate Council of British Columbia (“Council”)
has a mandate to protect the public by enforcing the licensing and licensee
conduct requirements of the Real Estate Services Act. The Council’s
areas of responsibility include:
-
Licensing real estate representatives, associate brokers,
managing brokers and brokerages engaged in real estate sales, rental management
and strata management services
-
Monitoring and enforcing entry qualifications
-
Investigating complaints against licensees
-
Ensuring compliance with the legislation
-
Conducting disciplinary hearings and imposing
administrative penalties or disciplinary sanctions
Effective January 1, 2006 strata management companies and
their strata property managers must be licensed under the Real Estate
Services Act. As part of the process, all strata managers (with a few noted
exceptions), including their related companies, will need to apply to the
Council for a licence before January 1, 2006. If the strata management company
meets the “grand parenting” provisions, they will be issued a temporary licence
subject to meeting applicant-screening criteria and completing any required
education courses and/or examinations. Grand parenting means a person who was
providing strata management services for a period of at least three months
before January 1, 2006.
There is
provision for a self-managed strata corporation to be exempt from the licensing
requirements when an owner is providing the strata management services. The
owner is limited to managing no more than two strata corporations, provided the
owner owns a strata lot in each of the strata corporations. This applies, for
example, where the treasurer of the strata council deposits the strata fees and
may have signing authority on behalf of the strata corporation. A strata
caretaker employed by a strata corporation or a caretaker employed by a
brokerage providing strata management services is also exempt from the
licensing requirements so long as certain conditions are met.
The obligations for strata management service providers
under the Real Estate Services Act, Regulations, Rules and Bylaws are
considerable. For example, all strata management companies must set up separate
trust accounts for each strata corporation they manage. Where they hold
contingency reserve funds (“CRF”) or special levies, another separate trust
account must be established by the brokerage for the strata corporation. Two
signatories are required for the CRF/special levy trust account and the Council
Rules specify who may be a signing authority. Proof of these accounts is
required with all applications for brokerage licensing. Every month, the
brokerage will have to provide the strata corporation with a copy of the
statement for each trust account within 30 days after receiving it from the
savings institution.
Strata
Corporations should note that the Council Rules stipulate content for
management service agreements. These agreements must: describe what types of
funds are held in trust; stipulate the authority to make withdrawals from trust
accounts; clarify signing authority; specify authority to enter into contracts;
outline the specifics of accounting statements provided; describe what records
will be kept; and outline provisions for disclosure of information. Strata
management companies will need to ensure that these provisions are in place
before January 1, 2007.
What will the role of the Council be once strata managers become
licensed? To clarify, the Council cannot enforce the Strata Property Act
or take action to enforce the Strata Property Act against strata owners
and strata corporations. For example, if an owner has a complaint that the
strata corporation is over-spending in relation to their budget, that matter is
not within the scope of the Council’s mandate. Areas where the Council can
investigate, based upon a complaint include allegations that a licensee may
have:
· Contravened the Real Estate Services
Act, Regulations, Rules or Bylaws
· Breached a
restriction or condition of their license
· Conducted
activities that constitute wrongful taking or deceptive dealing
· Demonstrated
incompetence in performing any activity for which a license is required
· Engaged in
conduct that is contrary to the best interests of the public
· Undermined
public confidence in the real estate industry
· Brought the
real estate industry into disrepute.
For more
information about the Real Estate Services Act, Regulations, Bylaws and
Rules please refer to the Council’s website at www.recbc.ca. Additional
information about the new licensing requirements for strata managers, including
a list of frequently asked questions, will be placed on the Council’s website
in the near future. In the meantime, if you have any question, please do not
hesitate to email the Council at info@recbc.ca.