The Real Estate Services Act (British
Columbia) ("RESA") creates the regime that requires a
person to be licensed prior to being permitted to provide
"real estate services" in British Columbia to or on
behalf of another, for or in expectation of payment. "Real
estate services" include trading services, strata management
services, and rental property management services.
On March 25, 2015, amendments to RESA came into force that will
have a direct impact on RESA licensees.
The four (4) material changes to RESA implemented by this latest
amendment are summarized as follows:
1. The definition of "strata
management services" has been amended to include
"enforcing bylaws or rules of a strata corporation."
This amendment broadens the licensing
requirements by stating that any individual, partnership or
corporation who is enforcing the bylaws or rules of a strata
corporation and expects payment in exchange for these services is
caught by the definition of "strata management services,"
and thus is providing "real estate services." These
individuals, partnerships or corporations must be licensed and will
be regulated by RESA unless exempted by the regulations.
2. The definition of "trade in
real estate" now explicitly includes "the assignment of
contracts for the purchase, sale, or lease of real estate, or a
transaction in relation to such an assignment."
This amendment now makes it clear
that services related to contract assignments are included as a
3. Licensees engaged by a brokerage
must now pay real estate-related referral fees that they receive to
their brokerage. The brokerage must pay those fees, and any
referral fees paid directly to it by a third party, into their
brokerage trust account.
Referral fees will include money that
is held or received by a licensee for recommending the products or
services of a home inspector, a mortgage broker, a notary public, a
lawyer, a savings institution or any other person in a business,
profession or occupation relating to real estate.
Referral fees will now be treated the
same as any money received from, for or on behalf of a principal
for real estate services, as well as money held or received as
payment for real estate services. The brokerage will determine when
or whether the referral fees are to be paid out to the licensee as
part of the licensee's remuneration, as money may be withdrawn
from a brokerage trust account to pay licensees who are entitled to
4. Licensees and brokerages are not
required to pay money that is held or received by them into a
brokerage trust account if the following conditions are
a) the money is in the form of a
cheque, draft or money order and is payable to a third party;
b) the licensee's only action in relation to the monetary
instrument is to deliver it to the person entitled to the payment;
c) the delivery is done "immediately."
This provision streamlines how money payable to a third party is
to be handled by licensees and brokerages. In the past, all money
received was to be paid into a brokerage trust account unless a
specific exception was available. The exception required a
separate, written agreement between the parties. This new provision
provides a simpler method to bypass the brokerage trust account in
order to directly transfer money to a third party.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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