B.C. superintendent of real estate denies ignoring 'shadow flipping'

VANCOUVER - British Columbia's superintendent of real estate is denying that she has failed to take action on "shadow flipping," saying she only learned of specific allegations from the media last week.

See Full Article

Carolyn Rogers said her office has not received any complaints in recent years about the assignment clause, which involves a real estate agent selling the same home multiple times before the sale closes to drive up the final price and collect several commissions.

"The first I had heard it had become an issue and there were concerns about it was just over the last few days," she said in an interview Wednesday.

"But it's not a practice we're unfamiliar with and it's not a practice that we've been ignoring."

Opposition New Democrat housing critic David Eby has accused Rogers and the Real Estate Council of B.C. of turning a blind eye to what he calls fraudulent and unethical behaviour by some Metro Vancouver real estate agents.

But Rogers said she and the council moved quickly to launch an investigation this week following the reports. She will chair and appoint an independent advisory group to come back with interim recommendations in April.

She noted the assignment clause in contracts is not new and her office issued a consumer alert in 2008 warning that in a hot housing market, purchasers might transfer their contracts to other buyers at a higher price.

Rogers, a former public servant and financial-services professional, has held the position for six years. Her office is independent of the council and its mandate is to protect the public.

The superintendent's office reviews the council's enforcement decisions, including those on contract assignments. It's unclear why those decisions didn't alert Rogers to any concerns about shadow flipping because she declined to comment on specific decisions.

She said the scope of the investigation has not yet been set but it will include a broad look at business practices and standards. Allegations have also emerged that some real estate agents are not properly reporting transactions to a federal anti-money laundering agency.

"I think the concerns that have been raised extend beyond shadow flipping," Rogers said. "They come down to whether or not Realtors are acting in the interests of their client and acting not just in a way that meets the letter of the law, but meets a high ethical standard."

Rogers said she doesn't know whether shadow flipping is widespread in Metro Vancouver but she hopes the review will help to determine the scale of the problem.

Darcy McLeod, president of the Real Estate Board of Greater Vancouver, said it's not new or surprising that people are profiting from assigning contracts in a heated real estate market. He said the board had not received any complaints about shadow flipping.

"The quote-unquote widespread problem isn't generating any complaints," he said.

"The notion that realtors are driving up prices with this practice doesn't really make sense either, because ultimately it's the buyer in the end who decides what price they're willing to pay for a property."

The Real Estate Council of Ontario said it is not seeing the same trend play out in that market.

"To the degree that we hear about assignment clauses - and it is rare - they have usually involved new construction houses and condos, not resales that have not yet closed," registrar Joseph Richer said in a statement.

The Ontario body noted that agents have an obligation to disclose if they have a financial interest in the purchase or sale of a home.

"If the same brokerage were representing both the buyer and the seller in a transaction, and the buyer intended to assign the purchase to another buyer, the brokerage would have to inform the seller."

- With files from Alexandra Posadzki in Toronto



Advertisements

Latest Economic News

  • Judge overturns $417M award against Johnson & Johnson in ovarian cancer case

    Economic CBC News
    A judge on Friday tossed out a $417-million US jury award to a woman who claimed she developed ovarian cancer by using Johnson & Johnson talc-based baby powder for feminine hygiene. Los Angeles County Superior Court Judge Maren Nelson granted the company's request for a new trial, saying there were errors and jury misconduct in the previous trial that ended with the award two months ago. Source
  • Long-term future of Bombardier's other commercial aircraft unclear: analysts

    Economic CTV News
    MONTREAL -- Bombardier's strategic C Series partnership with Airbus should put it on stronger financial footing but it remains unclear what fate awaits its other commercial aircraft. The Montreal-based transportation company remains burdened by more than US$9 billion of debt and wants to regain its leading position in the high-margin business jet market. Source
  • Questions and answers on proposed ban on laptops in luggage

    Economic CTV News
    WASHINGTON -- First the U.S. government temporarily banned laptops in the cabins of some airplanes. Now it is looking to ban them on from checked luggage on international flights, citing the risk of potentially catastrophic fires. Source
  • So, who in Canada actually applied to be Amazon's next HQ2?

    Economic CBC News
    Amazon's announcement earlier this year that it wants a second headquarters set off a flurry of interest from cities across the continent, all eager to be a new home to the biggest online merchandise seller in the world. Source
  • Nature's Mix removes cancer claim from granola label after Marketplace investigation into 'superfoods'

    Economic CBC News
    Nature's Mix, a company that makes granola with quinoa that it markets as a "superfood" and that included a nutrition label that claimed quinoa "prevents cancer" has removed the claim after a Marketplace investigation. The old nutrition label on Nature's Mix Superfood Granola with quinoa listed a series of purported health benefits associated with the grain: energy booster, sleep aid, controls blood sugar, curbs food craving, weight control, lower cholesterol, prevents cancer. Source
  • So, which Canadian cities actually applied to be Amazon's next HQ?

    Economic CBC News
    Amazon's announcement earlier this year that it wants a second headquarters set off a flurry of interest from cities across the continent, all eager to be a new home to the biggest online merchandise seller in the world. Source
  • Yellen says Fed's extraordinary policies may be needed again

    Economic CTV News
    WASHINGTON -- Federal Reserve Chair Janet Yellen on Friday defended the central bank's extraordinary efforts to fight the Great Recession and said they might be needed again. During the recession, the Fed pushed short-term interest rates to zero. Source
  • Half of Tim Hortons franchisees in Canada join unsanctioned group

    Economic CTV News
    Less than a year after it was created, a group looking to raise Tim Hortons franchisees' concerns over the chain's management has recruited half of all of Tim Hortons Canadian franchisees into its ranks. The Great White North Franchisee Association president David Hughes said in a letter sent to all franchisees that half of the chain's franchisees have shown they support the significant issues the group publicizes. Source
  • Hudson's Bay CEO Jerry Storch leaving company

    Economic CBC News
    Jerry Storch is stepping down as chief executive of Hudson's Bay Co., the retailer announced after the close of stock markets on Friday. Storch will depart effective Nov. 1 and return to his firm, Storch Advisors, HBC said in a release. Source
  • Pokemon to say goodbye to Nintendo 3DS

    Economic CTV News
    The twin release of Pokemon Ultra Moon and Pokemon Ultra Sun in Nov. 2017 will be the core franchise's last appearance on Nintendo 3DS, paving the way for a shift in focus to other formats. Source