BRITISH COLUMBIA – The British Columbia Real Estate Association (BCREA), with support from the province’s real estate boards, has published a white paper and series of sweeping recommendations for the BC government aimed at addressing current concerns with the province’s housing market, the real estate transaction process and consumer protection.
The white paper, called A Better Way Home: Strengthening Consumer Protection in Real Estate, offers more than 30 recommendations spanning four areas: addressing housing supply issues, enhancing consumer protection in real estate transactions, evolving the real estate sector and contributing to the creation of a world-leading regulatory structure. It incorporates findings from seven focus groups with consumers and realtors, years of survey data, and a detailed analysis of economic and secondary literature, including the impacts of attempted housing market interventions worldwide.
“BCREA shares consumer and government concerns that current housing market conditions are untenable. Our recommendations include long-term measures to create more housing options for British Columbians, as well as immediate steps to give consumers in the market today more peace of mind,” says BCREA Chief Executive Officer Darlene K. Hyde. “As the voice of BC’s 24,000 Realtors, we want consumers to have full confidence in real estate transactions.”
BCREA’s recommendations to support consumer confidence in real estate transactions include:
- Giving buyers time to research a property before making an offer by introducing a mandatory “pre-offer period” of a minimum of five business days from when a property is first listed. During this period, offers cannot be made.
- Helping consumers make more informed decisions in multiple offer scenarios by collaborating with real estate sector stakeholders to establish a process that balances offer transparency for buyers with privacy concerns.
- Ensuring prospective buyers have immediate access to relevant information by making property disclosure statements mandatory and available upon listing.
- Mandating that all documents related to strata transactions are made available with the listing, including strata bylaws, depreciation reports, status of contingency funds, strata council correspondence and the Form B.
- Raising entry qualification standards for new licensees to ensure consumers are supported by a profession that is evolving along with the changing market.
While A Better Way Home is based on years of feedback, data and market analysis collected by BCREA and regional real estate boards, we have published it in response to the government’s announced plans to introduce a mandatory “cooling off period” in real estate transactions as soon as this spring. We are deeply concerned that this decision was made without first conducting thorough public consultations with the real estate sector and consumers, a problem statement or supporting rationale.
BCREA supports measures to increase consumer protection in real estate transactions, but it must be done in a way that is evidence-based, regionally nuanced and considers buyers, sellers and changing market trends. Without these best practices, policies are likely to result in unintended negative consequences for consumers and the real estate market as a whole.
“A ‘cooling off period’ is not the answer to alleviating the stresses consumers are currently facing in real estate transactions,” adds Hyde. “It won’t stand the test of changing market conditions, regional market differences and doesn’t equally serve buyers and sellers. It also does nothing to address the root of BC’s housing affordability problem; namely, lack of supply.”
An analysis of “cooling off periods” in other global jurisdictions has shown the policy to be ineffectual at best. The provincial government announced plans for a “cooling off period” in real estate transactions on November 4, 2021, without broad consultation with the housing sector. BCREA strongly believes that consumer interests are best served when the government invites in-depth input from housing sector stakeholders before announcing potential policies.
“With access to extensive data and expert analysis on housing market conditions, on-the-ground insights into consumer experience, close working relationships with other housing sector stakeholders, and a commitment to enhancing consumer confidence in the Realtor profession, BCREA is uniquely positioned to support the government in identifying a ‘better way home’ for all British Columbians,” says Hyde.
“The BC Northern Real Estate Board supports BCREA’s recommendations to enhance consumer protection and improve housing affordability. The “cooling off period” recently announced by the BC Government was made without consultation from the real estate sector and appears to be a “one-size-fits-all” solution based on current market conditions in specific parts of the province.
“However, markets conditions vary across time and geography, especially in the north where there are currently buyer, seller and balanced markets. A poorly planned policy could undermine consumer protection in the face of a swiftly changing environment. We ask the government and regulator to review BCREA’s recommendations and to consider the protection of all consumers, both buyers and sellers, regardless of where they reside,” said Alex Goseltine, Executive Officer of the BC Northern Real Estate Board.
