Regulator's investigation into New Coast Realty ends without discipline

A brokerage at the centre of a controversy that transformed real estate regulation in British Columbia will not face any discipline in connection with allegations of improper training techniques.

The Real Estate Council of B.C.announced the end of itstwo year investigation into New Coast Realty this week with a finding that there was insufficient evidence to warrant disciplinary action.

The council has issued 10 fines and five suspensions against people licensed or formerly licensed by New Coast.

But the RECBC says an investigation overseenby veteran lawyer Len Doustdetermined there wasn't enough evidence that "training provided by the owner and practices at the brokerage put consumers at risk."

Allegations based on a tape recording

The investigation began in 2016 after reports in the media about the practice of "shadow flipping" in which agents allegedly pocketed multiple commissions on the same property through the assignment of a contract for a higher price before the finalization of a sale.

"Media accounts were published alleging that training practices at the brokerage by its owner, who did not hold a real estate licence, could be putting real estate consumers at risk," the council said in a statement.

"Many of these allegations were based on a tape recording made at a training session that was provided to a newspaper reporter by an unidentified person."

At the time the allegations were made, New Coast issued a rebuttal of the allegations and claimed it followed all necessary rules and regulations.

The council imposed sweeping conditions on New Coast pending the outcome of its investigation, includingthe appointment of a managing broker approved in advance by the RECBC.

Further discipline may be expected

According to the council, investigators reviewed "a large number of files" at the brokerage and investigated the conduct of current and former New Coast licensees.

They "reviewed and analyzed translations and interpretations of the tape recording, including the explanations provided by the brokerage for the comments in the tape," the council's statement said.

They also sought to identify the individual who recorded the training session.

The RECBCsaid confidentiality provisions in the Real Estate Services Act prevent the discussion of investigations that did not or have not yet resulted in disciplinary action.

The council noted the disciplinary action it has taken against former and current New Coast licensees during the course of the investigation.

The most recent of those was a 45-day suspension in June against Jing(Sandra) Li for misconduct revealed through a series of transactions that included contract assignment.

A few months before that, another real estate agent was fined $2,000 for drawing up a contract forcing a buyer to display a New Coast Realty Sold sign for a year after the possession date.

The RECBCsaid further disciplinary actions may be expected against other licensees.

The controversy around New Coast Realty ultimately sparked a public discussion that led to theprovincial government's decisionto end self-regulationof the real estate industry.