Probe launched into alleged fraud, insider trading by Vancouver real estate agents

VANCOUVER - The independent office charged with overseeing the British Columbia real estate market will investigate allegations of fraud and insider trading by some Metro Vancouver real estate agents, the provincial government said Monday.

See Full Article

Superintendent of Real Estate Carolyn Rogers will work with an advisory group being set up by the Real Estate Council of B.C. to look into concerns raised by media reports and Opposition politicians, said B.C. Minister Peter Fassbender.

“The reason we have an independent superintendent's office is that they are charged with ensuring that best practices are in place,” he said in an interview.

“Any regulatory changes that might be required will be brought forward, and so we are encouraging that any issues that come up be directed to the superintendent or to the real estate council, to make sure the public is protected on every front.”

The government dismissed calls from the Opposition New Democrats to launch a formal arm's-length inquiry. Fassbender said the superintendent is independent and the government will take “very seriously” any recommendations that are issued.

Fassbender said the government will also be taking measures in the upcoming budget intended to address concerns about housing supply, pricing and affordability.

NDP housing critic David Eby claimed Monday that some real estate agents have been avoiding property transfer and capital gains taxes while exploiting a clause in contracts that allows for a series of home flips, increasing the final price by hundreds of thousands.

He also alleged that some real estate agents have been helping clients hide the foreign origins of money used in transactions by putting the broker's location instead of the purchaser's address on federal anti-money laundering forms.

“Both of these independent issues would be serious enough on their own,” Eby said at a news conference. “But together, with so many widespread reports coming from different sources, they lead us to the inevitable conclusion that oversight of the real estate industry in British Columbia is woefully inadequate.”

He said the province has fallen “asleep at the switch” and could be losing millions in tax revenue, while allowing realtors to have an unfair advantage in insider trading and defeat anti-money laundering protections.

“There are many Realtors who conduct themselves professionally ... and are valued members of our communities,” he said. “Their reputations are directly impugned by this kind of conduct.”

Eby sent two letters in January to the Real Estate Council of B.C., which regulates licensed agents, after a real estate agent came forward as a whistleblower.

He outlined allegations that some agents and investors were exploiting a clause that permits contracts to be sold multiple times before the closing date.

The practice allows agents to enjoy what's called a “lift,” or an increase in price each time the contract changes hands, as well as a commission on each sale. Only the final buyer pays the property transfer tax.

The council initially declined to investigate, stating in a Jan. 19 letter to Eby that “no specifics have been provided that would suggest that your informant's concerns are warranted.”

But in a statement on Monday the council said it was deeply concerned by the allegations. An advisory group will investigate whether the so-called assignment clauses are being used appropriately and develop recommendations to increase enforcement and oversight, it said.

“We realize that this is an urgent matter and expect to announce the members of the multi-stakeholder advisory group within the coming two weeks,” it said.

The group will report back to the council with initial recommendations in 60 days.

The Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, is the federal agency responsible for policing attempts to launder money in Canada. Realtors are required to fill out a FINTRAC form for every transaction.

Using the broker's Canadian address on the form instead of the purchaser's foreign address reduces the level of risk perceived by FINTRAC as they do their audits, Eby said.

Renee Bercier, speaking for the federal agency, said it is legally barred from commenting on any information it has received or enforcement actions it has taken.

“That being said, FINTRAC considers the allegations made to be serious.”



Advertisements

Latest Economic News

  • Why do you need a pet insurance, right here, right now

    Economic 24news
    Many Canadians would consider their pets as a part of their immediate, granular, family. Although some professionals think it’s not healthy, that’s the way life is in the twenty first century; There is a steep decline in the birth rate globally, with Japan leading the pack, and pets are filling in the void.
  • 'Archaic' liquor laws in B.C. hurt consumers, whisky distributor says

    Economic CTV News
    VANCOUVER -- An Alberta-based whisky distributor says "archaic" liquor policies in British Columbia are limiting the range of products consumers can access. Robert Carpenter with the Scotch Malt Whisky Society says B.C. bars have long skirted rules that prevent them from buying unique products at private liquor stores that aren't carried at government stores. Source
  • With a deep tech talent pool, Toronto could hit Amazon's 'sweet spot' with bid for new HQ

    Economic CBC News
    Toronto faces stiff competition in its bid to court Amazon, but some Canadian tech experts agree that among the 20 cities short-listed as potential locations for the company's second headquarters, Toronto might just hit "the sweet spot. Source
  • HBC's Lord & Taylor to lay off 200 in U.S. operations move

    Economic CTV News
    WILKES-BARRE, Pa. -- Lord & Taylor has announced that it will be laying off about 200 people at a Pennsylvania distribution centre as it moves some operations to a new location about 80 kilometres away. Source
  • Four things to watch for in the Canadian business world in the coming week

    Economic CTV News
    TORONTO -- Four things to watch for in the Canadian business world in the coming week: Time to have "the talk"? Alimentation Couche-Tard's hosts its first-ever investor day on Monday. The large convenience store chain, which operates as Circle K outside Quebec, recently said it hasn't given up hope of selling cannabis as some Western Canadian provinces turn to the private sector for over-the-counter sales. Source
  • Canadian tech CEOs disappointed Amazon won't be coming to their cities

    Economic CTV News
    CALGARY -- Tech sector entrepreneurs whose Canadian cities were snubbed by Amazon in its search for a second corporate campus say they are disappointed, despite fears they would have seen increased competition for scarce skilled talent. Source
  • Rogers sales tactics and the 'Tide pod challenge': CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Rogers employees reveal sales pressures A number of Rogers employees have come forward about how they are coached to upsell customers. Source
  • Macron says U.K. can't keep full access to E.U. post-Brexit

    Economic CTV News
    LONDON -- French President Emmanuel Macron has suggested that Britain is likely to negotiate a unique relationship with the European Union before it leaves the bloc next year, while stressing that any agreement must be consistent with EU rules. Source
  • Retrofitting suburbia: Old shopping malls can be saved by their parking lots

    Economic CBC News
    Aging shopping centres, built decades ago as beacons of fashion and free parking on the suburban fringe, are gradually becoming relics on a sea of inner-city asphalt. But rather than tinker at the margins to squeeze the last nickels out of old stores, some retailers are doing something dramatic with their biggest asset: land. Source
  • Want to understand the problems with minimum wage? Talk to people who earn it

    Economic CBC News
    There are more than a million Canadians who work minimum wage jobs — they make up 8 per cent of the country's salaried employees. The hourly rate they earn varies across the country, from a low of $10.85 in Nova Scotia, to Alberta where the minimum wage is set to increase to $15 in October 2018. Source