The sa国际传媒 government has admitted that letting the real-estate industry regulate itself was a bad idea. Homebuyers and sellers will be better protected now that the province has taken back the power.
When it came to fixing problems with the industry, Premier Christy Clark went even further than an independent advisory group recommended.
Last Tuesday, the group suggested a string of improvements to the way the sa国际传媒 Real Estate Council polices real-estate agents. On Wednesday, Clark said enough is enough and stripped the council of its regulatory authority.
The job posting for a new superintendent of real estate went up the same day.
That kind of swift, sweeping action is rare. Compare it to the government鈥檚 insistence that everything is just fine when it comes to mining regulation after the Mount Polley tailing-pond disaster.
The pressure to do something about sa国际传媒鈥檚 Wild West housing market has been growing steadily, so the government clearly saw a need to act. Ministers knew the public would back them up, and the more decisive the action, the stronger the backing would be.
Revelations about such practices as shadow-flipping, where agents transfer sales agreements several times before a deal closes, left ordinary British Columbians with the impression that somebody was making out like a bandit 鈥� and it wasn鈥檛 them.
The new policy will do little to make housing in Victoria and Vancouver more affordable, which is the main complaint from the public. However, the reported abuses by a few real estate agents begged for correction.
Taking over regulatory responsibility was just the most dramatic of Clark鈥檚 promises. Others were equally important, however, including raising fines to $250,000 for individuals and $500,000 for brokerage firms, ending the practice of one agent acting for both buyer and seller, seizing commissions from rule-breakers, improving complaint procedures and giving non-industry members a majority on the sa国际传媒 Real Estate Council.
Industry representatives say they are ready and willing to work with the new rules. Which raises the question: Why didn鈥檛 they deal with the bad apples themselves when they had the power?
Did they not see that allowing the abuses to go on would undermine their reputation and invite strong action from government? If they did, they didn鈥檛 give much indication of it.
It鈥檚 a reminder of the dangers of self-regulation in industry. While it might work in some fields, in too many areas the fox ends up running the henhouse. Foxes aren鈥檛 evil, but they are foxes.
Those in the industry go into self-regulation with the best of intentions, but they can鈥檛 escape the inevitable conflict between their duty to investors and their obligation to the public. Profit is not a dirty word, but a business鈥檚 primary purpose is financial strength, not public service.
To remove those conflicting loyalties, we give regulatory power to those who don鈥檛 have a direct financial interest. It might not be perfect, but it gives citizens greater faith that the rules are being enforced the same way for everyone.
Clark鈥檚 changes will give us more confidence that the playing field is level.
