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Administrative Penalties Under the Real Estate Services Act
Under the Real Estate Services Act (“RESA”), the Superintendent of Real Estate (the “Superintendent”) can issue Administrative Penalties for individuals or business entities when they fail to comply with RESA, the Real Estate Services Regulation (the “Regulation”), or the Real Estate Services Rules (the “Rules”). Administrative penalties are often used to address minor or moderate non-compliance and are used to encourage compliance and to intervene in active non-compliance.
As of July 1, 2024, administrative penalties may be issued to address non-compliance for both licensed, or unlicensed, individuals or entities. This page provides information about administrative penalties and about the procedures that BCFSA has in place to issue administrative penalties.
When Administrative Penalties Are Used
In instances where the Superintendent is satisfied that one or more provisions of RESA, the Regulation, or the Rules designated under section 26 of the Rules has been contravened, the Superintendent may consider issuing an administrative penalty.
In determining whether to issue an administrative penalty, the Superintendent may consider a variety of factors, including whether:
- The contravention involved a material degree of harm to a client, consumer, or other member of the public;
- The contravention involved harm to the reputation of the real estate industry;
- The contravention was an isolated incident;
- The contravention was unintentional or inadvertent and an ordinary standard of care would have prevented its occurrence;
- The individual or business entity promptly took available and reasonable steps to correct or remedy the contravention when the matter was brought to their attention;
- There is no evidence that the individual was acting other than in good faith;
- The contravention is easily substantiated, or the individual responsible has acknowledged committing the contravention;
- The individual benefitted materially from putting a client or consumer at risk;
- The individual derived or would have reasonably expected to derive, directly or indirectly, any economic benefit from the contravention;
- The imposition of an administrative penalty in the circumstance would serve the public interest and is likely to satisfy to aims of specific and general deterrence;
- Imposing an administrative penalty rather than recommending the issuance of a Notice of Hearing is not likely to diminish public confidence in the regulatory framework; and
- The cumulative effect of the collection of contraventions precludes the contraventions from satisfying any of the above considerations, where there are multiple contraventions eligible for an administrative penalty, the contravention occurred concurrently or in close proximity to one another.
The Administrative Penalty Framework
Administrative penalty provisions are set out in sections 56 and 57 of RESA and in sections 26 and 27 of the Rules.
Under section 56 of RESA, BCFSA has the authority to designate sections of RESA, the Regulation, or the Rules as being subject to administrative penalties and establish the amount of the penalties.
Sections 26 and 27 of the Rules indicate which contraventions of RESA, the Regulation, and the Rules are subject to administrative penalties and the prescribed amounts.
Categories of Administrative Penalties and Administrative Penalty Amounts
As of July 1, 2024, there are six categories of administrative penalties that can be used to address contraventions of 107 sections of RESA, the Regulation, and the Rules. This section provides information about the six categories of administrative penalties.
| Category | Description of Designated Contraventions | Penalty Amounts |
|---|---|---|
| Category A | Business infraction with a low risk of harm to consumers. The majority of contraventions in category A related to duties and responsibilities of the brokerage. | First contravention = $1,000 Subsequent contravention = $2,000 |
| Category B | Cover a range of licensee responsibilities, including disclosure requirements. Category B penalties generally include misconduct related to minor matters where there is no material harm for consumers. Contraventions are generally related to licensee responsibilities to keep BCFSA or their managing broker informed about changes to their business. | First contravention = $2,500 Subsequent contravention = $5,000 |
| Category C | Category C contraventions are related to the substantial duties that a licensee owes to their clients and also include the failure to act with reasonable care and skill under section 34 of the Rules, which can apply to non-clients as well. Contraventions in this category may include a higher level of risk for consumers. | First contravention = $5,000 Subsequent contravention = $10,000 |
| Category D | Category D contraventions are related to requirements for licensees. Penalties issued under Category D include a daily penalty to encourage timely compliance and the provision of accurate information. | Base penalty amounts: First contravention = $1,000 Subsequent contravention = $2,000 An additional $250 penalty applies for each day or part of a day that the contravention continues. |
| Category E | Category E penalties can apply to licensees and also to unlicensed individuals and entities. Category E also includes a daily penalty to encourage prompt compliance. Contraventions are related to failure to comply with a BCFSA investigation or with a BCFSA review of brokerage accounts or other records. | Base penalty amounts: First contravention = $1,000 Subsequent contravention = $5,000 An additional $1,000 penalty applies for each day or part of a day that the contravention continues. |
| Category F | Category F contraventions are related to BCFSA licensing requirements and related restricted activities. Contraventions in this category can apply to both licensees and to unlicensed persons. | Category F includes a range of penalties, rather than a prescribed amount. The flexible approach allows the Superintendent to consider many factors in determining an appropriate penalty and the unique circumstances of each case. Between $5,000 and the maximum amount for a first contravention. Between $10,000 and the maximum amount for a second contravention. |
Administrative penalty amounts are set out in section 27 of the Rules. The penalty amount may be impacted by previously imposed penalties and escalating penalties will be imposed in circumstances of subsequent contraventions. In the case of Category D or Category E contraventions, the method of calculation for daily administrative penalties is set out in the rules and is discussed in greater detail in the examples provided on the Administrative Penalty Process page.
Issuing Administrative Penalties When Multiple Contraventions Are Eligible
In circumstances where the Superintendent is satisfied that an individual or an entity has two or more contraventions of RESA, the Regulation, or the Rules designated as being subject to administrative penalties, the Superintendent may impose an administrative penalty for each separate contravention. Prior to doing so, the Superintendent will consider:
- Whether the contraventions, when taken together, are sufficiently serious that they should be addressed through enforcement action initiated through a Notice of Hearing; and
- Whether the contraventions, considered together, indicate a level of carelessness on the part of the individual or the brokerage that may pose a risk to members of the public.