B.C. real estate advisory group releases terms of 'shadow flipping' review
Terms include investigation into misleading advertising, predatory sales practices and contract assignments
An advisory group convened by the Real Estate Council of B.C. says it will examine the current rules governing real estate practices that have led to allegations of so-called "shadow flipping."
The group released its terms of reference Tuesday with a pledge to look into misleading advertising, coercive or predatory sales practices and the assignment of contracts.
"The Advisory Group understands that this is fundamentally about strengthening protection for consumers," said Carolyn Rogers, the group's chair and the superintendent of real estate, in a written release.
"We're committed to maintaining a tight focus on the public interest as it relates to licensee conduct and the regulation of that conduct."
Rogers said the eight-person group will look into the current rules that have caused concern among potential buyers and sellers, including misleading advertising, coercive or predatory sales practices, and the assignment of contracts.
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The group will also look at how the rules are administered, and what the requirements and professional standards are for licensed realtors throughout the province.
The group was convened after a Globe and Mail investigation uncovered the practice under which sales contracts are reassigned, in some instances multiple times, before the sale of a home is closed.
The investigation revealed that those involved in the shadow flipping can avoid paying the property transfer tax by reassigning the sales contract before the final sale.
The advisory group is scheduled to provide an interim report to the Real Estate Council of B.C. by April 8, and a full report with recommendations is expected by the end of May.
With files from Canadian Press