B.C. finance minister moves toward single real estate regulator in bid to curb money laundering
The journey to one regulator for realtors and real estate transactions, however, will take until 2021 to complete.
Creating a single regulator for B.C.’s real estate sector was a key recommendation of several reports aimed at cracking down on money laundering in the sector, including the Maureen Maloney report released in May.
Getting there is going to take more time, however, as Finance Minister Carole James on Tuesday unveiled plans to table legislation for the new regulator to be in place under the newly created B.C. Financial Services Authority by the spring of 2021.
“But it will take some time to transition to make sure that the Crown corporation is ready to take on that responsibility,” James said. “For example, we don’t want to have a gap in disciplinary hearings.”
“We also need to give the financial services agency some time to get up and running,” she added.
In the meantime, oversight and enforcement of regulations in the real estate sector remain the joint responsibility of the province’s Superintendent of Real Estate and the Real Estate Council of B.C., but James said those agencies are under instructions to work more closely.
“It’s not that the systems in place aren’t doing their job,” James said in an interview. “We believe there are efficiencies to be gained from having them under a single regulator.”
B.C. has been under pressure to deal with money laundering in the province’s real estate market, which Maloney’s expert panel estimated to be a $5-billion problem in 2018, which inflated home prices by five per cent.
The province created the B.C. Financial Services Authority as a Crown agency, which has an independent board of directors, with the Financial Services Authority Act to take over from the Financial Institutions Commission under the Ministry of Finance.
The new authority came into force Nov. 1 to continue regulation of B.C.’s mortgage brokers, private pension plans and financial institutions, including credit unions, that are under provincial control.
“Bringing real estate regulation within the new B.C. Financial Services Authority is an important step towards modern, effective and efficient regulation,” said authority chairman Stanley Hamilton, professor emeritus in real estate at UBC’s Sauder School of Business.
B.C. Superintendent of Real Estate Michael Noseworthy said the change should make for better consumer protection “to increase public confidence in the broader financial services sector.”