Updated real estate rules will better protect consumers: industry association
Provincial legislation governing the real estate industry dates back to 1964
A draft bill to update the 55-year-old legislation governing the real estate industry offers more protections for both consumers and real estate agents, says the head of an industry association.
"We're still trying to govern our industry the way it was written in 1964," said Bill Stirling, CEO of the Newfoundland and Labrador Association of Realtors, after a public hearing of the government services committee Monday at the House of Assembly in St. John's. The committee is reviewing the draft Real Estate Trading Act Monday.
"It's time to modernize, it's time to bring our legislation into the new millennium, into the digital economy," said Stirling.
The push to change the rules comes after the 2016 collapse of Exit Realty on the Rock, which left more than 160 unpaid debts totalling more than $1.8 million on the books as part of the company's bankruptcy. Those owed money include more than 50 real estate agents owed nearly $440,000 combined.
Exit Realty on the Rock owner Anne Squires pleaded guilty earlier this year to counts of fraud, theft, forgery and breach of trust.
An agreed statement of facts filed at Newfoundland and Labrador Supreme Court in St. John's on Monday detailed how Squires faked sales agreements — some for non-existent properties — to bilk half a million dollars out of a company that advances commissions to real estate agents.
Lessons learned from Exit Realty
Stirling said in June that the lessons learned in Exit Realty's collapse would inform the legislative changes now in the works. On Monday, he said the recommendations for those changes include stronger protections for both consumers and real estate agents around conflict resolution and dispute resolution on deposits when a transaction doesn't close.
"There's a whole pile of modernization, both for the consumer and for the professionals in the industry," Stirling said.
The Newfoundland and Labrador Association of Realtors submitted several suggestions for the bill to the committee, including the automatic return of deposits if a good-faith conditional offer falls through, the creation of a recovery fund for disputed trust deposits, and the addition of random spot audits by Service NL staff.
Stirling spoke highly of the process of developing the new legislation, which he hopes will be passed this fall.
"Any time you can engage stakeholders in the development and the discussion of new legislation, I think that makes for better government and better legislation, better rules for how we organize," he said.
The previous Liberal government tabled a bill to update the act in the spring, but the provincial election was called before it could be passed. The government services committee is expected to submit a report after the next legislative session begins Nov. 4.
With files from Mark Quinn