The new Real Estate Services Act (RESA) will give B.C.'s 14,000 realtors more control over their industry and provide more protection to the public, say industry leaders.

"The last Real Estate Act was written back in the 1950s and the way that we do business has changed drastically," says Andrew Peck, president of the Real Estate Board of Greater Vancouver.

On Jan. 1, the RESA replaced the nearly 50-year-old Real Estate Act. A new Real Estate Development Marketing Act (REDMA) also took effect Jan. 1.

Peck says the new RESA reflects modern-day issues. It recognizes realtors as independent contractors, whereas the old law applied to the old days when agents were employees of real estate companies.

Andrew Peck

The new law also provides greater protection to consumers and a new organization called the Special Compensation Corp. will ensure that agency trust accounts - in which funds are held before transactions are completed - are bonded. The Real Estate Council of B.C., which regulates the industry on behalf of the provincial government, also has the authority to require that veteran realtors continue their education and training.

"Every realtor, to be able to maintain their licence, will have to be taking courses which is better for everybody," says Peck.

Predominantly, realtors need to improve their knowledge of several new provincial laws that apply to real estate, he adds. But realtors are still waiting for legislation that will allow them to form independent corporations - such as doctors and lawyers - and invest their income into the corporation for tax purposes. Such a move will enable realtors to save money, says Peck.

"It's not really a big thing for the consumer, but it's certainly helpful for the realtor, especially in years like the last couple of years," he adds. "It's been a pretty good real estate industry, but we went through tough times too, and when people are not able to corporately save their money, as opposed to individually, your levels of taxes are very different."

The REDMA now requires developers to disclose whether someone selling their properties is an employee or an independent realtor, says Peck.

Gordon Maroney, president of the B.C. Real Estate Association (BCREA), says one key aspect of the RESA is that it will allow the real estate industry to regulate itself.

"We're still doing business the way we did it Dec. 31," says Maroney. "What will change is that rules and regulations going forward - when they need to be changed to accommodate what is taking place in the marketplace - will happen much quicker. That's a huge change, because to get changes in regulations, it sometimes takes months - if not years."

If the public is concerned about realtors' ability to police themselves, the superintendent of real estate will still be in place to settle disputes, says Maroney.

The BCREA contends the new real estate services law better protects the public because it requires strata managers to be licensed (as of Jan. 1, 2006), creates a special compensation fund to protect consumers from losses due to theft or fraud committed by realtors, and gives the Real Estate Council of B.C. the authority to make disciplinary orders and freeze orders in urgent circumstances.

Maroney says the former Real Estate Act was old, outdated and prevented the industry from adapting to the future. Under the old law, lawyers and their employees did not require licences to sell real estate, says Maroney. Now, they do.

"That's a real protection to the public," he says.

The BCREA says the new real estate development marketing legislation benefits the public because a buyer can rescind an offer if a disclosure statement is not provided, a seven-day cooling-off period allows purchasers who received disclosure statements to rescind contracts, the superintendent of real estate may penalize developers who fail to file disclosure statements or provide them to buyers, and new rules clarify the pre-selling of real estate developments.

Murray Coell, B.C.'s community development minister, says the new laws spell more consumer protection and less bureaucracy for realtors.

"It's a bit of a celebration for the industry and for consumer protection as well," says Coell, whose ministry is responsible for the Homebuyer Protection Office.

"(The RESA) is clearer, easier to understand, allows for consumer protection and allows for less red tape and governance for an industry that's moving very rapidly in British Columbia right now," says Coell.

The REDMA will go hand in hand with RESA, he says. The development marketing law requires developers to be more accountable and professional among themselves while still being responsible to consumers.

"I think this was long overdue," says Coell. "I think British Columbians will be well served by the new acts in the coming years."

(Monte Stewart can be reached at monte@businessedge.ca)