Government Services Committee

GA49

Newfoundland and Labrador — Committees

Department Name Service NL September 2019 Real Estate Trading Act, 2019

Department Name • Real Estate Trading Act introduced in 1965 • Review undertaken in 2012 – no amendments at that time • Commitment to new review in Minister’s mandate letter and The Way Forward • Newfoundland and Labrador Association of Realtors (NLAR) conducted own consultations, released “What We Heard” and Recommendations • Engagenl.ca survey conducted, “What We Heard” document released Overview

Department Name • To adopt the term “broker” in place of “agent” as is the norm in six other provinces • Bill would replace the term “agent” with “broker” – s. 2(1)(

c) Change “agent” to “broker”

Department Name • To provide more stringent requirements to register as a real estate broker or salesperson • Bill would allow the Superintendent to set the form of the application- 7(1)(a) • A criminal background check and other information would be required – s. 7 • Licensees would have to notify the Superintendent of information changes– s. 12(f) • Regulations would prescribe the requirements, qualifications and conditions for issuing licences and allow the Superintendent to modify licence requirements by modifying the application form requirements – s. 47 • The Minister would set fees and establish forms – s. 48 Licensing requirements

Department Name • To allow for continuing education requirements for real estate brokers and salespersons • The Superintendent would have authority to prescribe continuing education requirements – s. 5(1)(

b) Continuing education

Department Name • To allow salespersons to establish and operate a personal real estate corporation, similar to other independent contractors in other industries • Bill would allow establishment of personal real estate corporation – s. 10 • A personal real estate corporation could apply for a licence – s. 9 • A licence could be issued to such a corporation – s. 6(1)(e) • Proclamation would be subject to addressing Service NL’s IT system changes Incorporation

Department Name • To require real estate brokers and salespersons to maintain errors and omissions insurance to protect professionals whose clients could claim damages as a result that professional’s negligent actions • Bill would require errors and omissions insurance – s. 7(1)(f) • Amount of insurance to be set in Regulations. $1 million is industry standard Errors and omissions insurance

Department Name • NLAR has a code of conduct for its members but there is no legislative requirement today • Bill would allow the Superintendent to establish a Code of Conduct – s. 5(1)(a) • Further details to be provided in Regulations, including ability for Superintendent to suspend, revoke or cancel a licence for a breach of the Code – s. 47 Code of conduct

Department Name • To establish restrictions on salespersons providing real estate and mortgage brokerage services • Bill would restrict a licensed real estate salesperson from providing real estate services and mortgage brokerage services to the same client or related business transaction – s. 28 Conflict of interest

Department Name • To establish disclosure requirements regarding referrals by real estate brokers and salespersons for related services such as mortgage or inspection services • Bill would provide for disclosure where a referral may be made for a fee, remuneration or benefit – s. 20 • Code of Conduct expected to provide further details Referrals

Department Name • To create a real estate recovery fund to protect consumers from financial loss in cases where a broker or salesperson is convicted of an offence, has a civil judgment made against them, or declares bankruptcy • To replace current bond requirements over time • The Bill would create the fund, to be financed by industry participants and managed by Service NL – s. 25 • Regulations would set out how licensees would contribute to the fund, and the administration of the fund – s. 47 Recovery fund

Department Name • To streamline the release of trust deposits, where the conditions in a purchase and sales agreement have not been met • Bill would allow the deposit to be released according to the terms of the contract signed – s. 26(4) • Bill would enable the Superintendent to direct the disbursement of the deposit – s. 26(4)(e) • Further details to be reflected in Regulations – s. 47 Trust deposits

Department Name • To establish a mechanism for disbursement of aged trust deposits without going to court • Bill would allow Superintendent to adjudicate disputes over trust deposits – s. 27 • Bill would allow unclaimed trust money held for more than two years to be paid into the Real Estate Recovery Fund – s. 27 • Regulations to enable the Superintendent to make decisions on disputed trust deposits – s. 47 Aged trust deposits

Department Name • To establish administrative fines and conditions for minor infractions, and provide authority to publish administrative decisions • Bill would allow for administrative fines to be assessed by the Superintendent for specific contraventions of the Act – s. 35 • Maximum fine would be $10,000 – s. 36(1)(c) • Specific contraventions and time, amount and manner of payment of fines would be set in Regulations – s. 47 Administrative fines & penalties

Department Name • To increase fines under the Act from the current range of $1000 to $2000, to strengthen the regulatory system and promote greater compliance • Bill would increase maximum fine for individuals or incorporated bodies to $50,000 where the person is found guilty of an offence for contravention of the Act – s. 45 Court-imposed fines

Department Name • To allow the Superintendent to issue orders to correct a situation deemed not in the best interest of the consumer • Bill would allow the Superintendent to issue an order to suspend or cancel a licence, impose conditions on a licence, pay a fine up to $10,000, or some other order prescribed in the Regulations – s. 36 • Appeals of Superintendent’s orders could be made to existing Financial Services Appeal Board Orders

Department Name • Provide for appointment of the Superintendent and Deputy Superintendent by the Minister, rather than Lieutenant-Governor in Council – s. 4 • Plain language amendments – throughout Act • Reorganization and modernization – throughout Act • Coming into force January 1, 2020 except sections dealing with recovery fund and personal real estate corporations, which would be proclaimed once administrative measures are in place – s. 54 Housekeeping and proclamation

Department Name Thank you

Document details

Collection	Newfoundland and Labrador — Committees
Citation	GA49
Type	committee
Volume / chapter	committees standingcommittees govservices ga49 presentation from service nl on real estate trading act 2019 september 17 2019
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	cdd626787ed1d4a7967cf6bf13d9c277ea60cd74

Source file is stored in the law ingest library (pdf).