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.
The over 30 recommendations address current concerns with BC’s red-hot 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 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, according to a press release.
The paper incorporates findings from seven focus groups with consumers and realtors, years of survey data, and a thorough analysis of economic and secondary literature, including impacts of attempted interventions in the housing market worldwide.
The catalyst for the move was the province’s newly introduced -- and highly controversial -- "cooling off period" (more on that later).
Aerial image of Stanley Park, Coal Harbor and Vancouver, BC, Canada
“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 in a statement. “As the voice of BC’s 24,000 Realtors, we want consumers to have full confidence in real estate transactions.”
BCREA’s recommendations 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,” reads the release. “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.”
"Cooling Off Period" Could Have Consumer Consequences
BCREA says it supports measures to increase consumer protection in real estate transactions, but that 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, says BCREA.
“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.”
According to BCREA, an analysis of cooling off periods in other global jurisdictions has shown the policy to be “ineffectual at best.”
The cooling off period was announced on November 4, 2021 without broad consultation from the housing sector, says BCREA.
“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.