A case in point on this topic is the recent temporary license suspension placed on Re/Max Tumbler Ridge Realty with respect to their accounting of client funds held in trust.
This suspension by the Real Estate Council of BC (‘RECBC’) has once again put this agency in the position of having only two real estate offices – at least for now.
The Real Estate Council is a regulatory agency established by the provincial government. Its mandate is to protect the public by enforcing the licensing, and licensee conduct requirements of the Real Estate Services Act.
According to RECBC, the issues that prompted the Council to take this action were from Re/Max Tumbler Ridge clients who had recently communicated with their office to voice their collective complaints.
As this case is currently under investigation, it remains to be seen what the upshot will be. Detailed information on the case is not readily available at this time, due to the investigative process underway.
Having said that, we would like to bring this matter to light, and share our knowledge and viewpoints on the subject of client trust monies.
To begin with, real estate agents commonly hold money in trust for clients; as with
- Deposits for the Purchase of Homes or Property; and, most commonly,
- Rent Collections (handled by Property Managers)
When a real estate company engages in property management functions on behalf of their clients, they collect rent, deposit it in a trust account, and then pay property expenses on behalf of those clients.
Due to this suspension, the local Re/Max is“prohibited from providing real estate services to, or on behalf of any member of the public, as a result of this order. This suspension is in accordance with Section 45 of the Real Estate Services Act, and remains in effect until further notice.”
This could be a very large matter, or a relatively small one. Not being able to account for clients’ trust monies can be as simple as having the money, but not properly accounting for it, up to actually stealing the funds.
It is not as common that licenses are suspended over minor transgressions. If a Real Estate Council auditor discovers bad accounting by honest people, it is unlikely that a temporary or permanent suspension will occur. From that point of view then, the suspension points to something that is perhaps more serious.
The Real Estate Council takes the accounting for trust monies seriously, as does the real estate industry in general. Once the investigation has completed, the results will become available to the public.
The Council can suspend licenses, fine agents, and require education. They can also refer the matter to the police if warranted.