Critics are calling on the B.C. government to do a better job of protecting real estate buyers in light of the results of an investigation into MAC Marketing Solutions and an incident last year in which staff made “false” statements to media.
The investigation revealed that it's legal for marketing companies and developers to have unlicensed staff at presentation centres. It also made clear that industry regulator Real Estate Council of British Columbia (RECBC) has no authority over those unlicensed staff if they work for the developer.
RECBC fined former MAC manager Nicolas Jensen $1,250 in late June and suspended him between July 9 and July 22 for his role in a scheme to dupe media in February 2013.
Jensen directed two unlicensed MAC staffers to pose as sisters who were waiting for wealthy Chinese parents to visit and buy them a condominium at Cressey Development Group's Maddox development as part of Chinese New Year celebrations, RECBC deputy executive director Larry Buttress told Business in Vancouver.
Jensen lost his job at MAC 12 days after the incident, and that loss of employment was a mitigating factor in what some, including Toronto real estate blogger Garth Turner, dismissed as an RECBC slap on the wrist.
The RECBC had no jurisdiction to take action against the unlicensed women, who posed as sisters, because the organization is limited to punishing licensed realtors and marketing companies.
The RECBC could have fined MAC, as the marketer, but its investigators chose not to levy any additional fines because Buttress said it deemed that Jensen alone directed the ruse.
Had the women worked for the developer, Cressey, instead of the marketer, MAC, RECBC could have meted out no punishment because it has no authority over developers or their staff.
“Everyone along the promotion chain should be accountable ultimately to the public,” said West End Neighbours director and Vancouver real estate observer Randy Helten. “If the RECBC is not doing that then some changes are needed [to B.C.'s Real Estate Services Act].”
Vancouver Cedar Party mayoral candidate Glen Chernen, who is a former licensed real estate broker, agreed.
“You're dealing with buyers who are making possibly the largest investment of their lives, a massive investment, and you would hope that the person dealing with them would have a certification,” he said.
“We don't know what's being said between the salespeople and the buyers in negotiations. A lot of things might be said that shouldn't be.”
Regardless, B.C.'s Real Estate Services Act and its regulations have a host of exemptions that allow non-licensed salespeople to sell real estate.
Developers support the status quo.
Cressey had unlicensed salespeople involved with projects about 15 years ago but now has no sales people, executive vice-president Hani Lammam told BIV.
Instead the company contracts all its marketing to third parties, such as MAC.
“I don't see a case for requiring all real estate transactions to involve realtors,” Lammam said. “I can go buy a home directly from an owner. I can go make a deal. I don't have to have a licensed agent involved in it.”
He added that if buyers want their own representation, they are free to bring along their own realtor.
“I don't think it's fair for the consumer to add the cost of representation when it's not necessary,” Lammam said. “Realtors are not inexpensive. So requiring everyone at presentation centres to be licensed would be an added cost.”
There are approximately 21,000 licensed realtors in B.C. It's unclear how many unlicensed sales staff are working for marketing companies and developers.
MAC owner Cameron McNeil told BIV that all of his sales employees are licensed and that the women who posed as sisters were not in sales roles but, instead, had “greeting and administrative duties.”
