This morning CREB announced that the hotly contested non-reporting of conditional sale rule that was implemented late in 2011 will remain in effect.
- For background, see original post: Rules Amended For Conditional Sales, December 31, 2011
- You can read the debate Calgary agents had on LinkedIn here, including a well thought out opening post from a previous CREB president as to why he was opposed to the non-reporting rule.
As you can see from the comments, the vast majority of agents (including myself) were opposed to the non-reporting rule.
Memo sent today from the CREB:
Your Board of Directors met yesterday, and one of the important decisions voted on was the rules around the reporting of pending sales.
As many of you know, there has been a great deal of controversy over this matter since Rule 19 was introduced in January 2012. Hearing those concerns, your Board of Directors has wrestled with the issue, and referred the matter back to the Professional Standards Steering committee.
Your board asked the committee to look at all options and come up with a solution that works for our members, while also keeping them in compliance with the Real Estate Act.
We heard members loud and clear. And for that reason the committee spent a lot of time researching the issue, consulting with members, monitoring comments on LinkedIn, seeking clarity from RECA and holding discussions with our own legal counsel. In that research, it became abundantly clear that reverting to the “old” – pre-2012 – rule is not an option available to us.
Therefore, after much debate, your Board of Directors has accepted the committee’s recommendation that the current rule stands – that members must allow the decision to report the conditional sale of a property up to the lawful instruction of the seller.
There is one important change. In its analysis of the comments since the rule came into effect, it became clear that many members are confused about how this rule plays out in practice. In fact, some members have been misleading their fellow REALTORS® over the status of a pending sale. This is wrong, and we are putting processes in place to inform our members about best practices.
Your board has authorized the creation of a new form that will require sellers to make a choice on whether their property status is A, P or U. More detail on this form, which is effectively immediately, is available on CREBLink.
One of the key considerations was protection of our members from potential proceedings by the provincial regulator. RECA has said that it believes the practice of mandatory reporting of pending sales breeches the rights of the seller to provide lawful instruction to his/her agent and forces the agent to breech his or her fiduciary duties to the seller.
It is also important to recognize that, while CREB® can make and enforce rules, those rules cannot supersede legislation. Provincial law always takes precedence.
Your board of directors cannot – and will not – make a decision that will put members at risk of legal proceedings. We received a very clear signal from RECA that mandatory reporting was potentially putting our members at risk of sanction.
While some members believe we should lobby RECA to change its interpretation of the act, it is unlikely such lobbying would lead to a change in position by RECA. There is nothing, however, to prevent member lobbying for amendments to the act, while complying with the current legislation.