Personal Real Estate Corporation Guidelines

Guidelines
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  • Guidelines

    BCFSA’s Guidelines provide a practical application of the information and give suggested best practice guidance to assist real estate professionals. These guidelines provide BCFSA’s interpretation of RESA and all other applicable legislation.

    In addition, BCFSA’s Guidelines may be a useful information source for the general public looking for information about standards of conduct for real estate professionals.

Purpose

These guidelines will assist you to set up and manage a personal real estate corporation in compliance with the relevant requirements.

If you are thinking about licensing a personal real estate corporation, you are strongly encouraged to carefully review these practice guidelines, as well as the relevant sections of the Real Estate Services Regulation regarding personal real estate corporations. You should also discuss the matter with your managing broker. There are additional reporting requirements for personal real estate corporations, as well as additional costs associated with the licensing.

  1. How to name a personal real estate corporation.
  2. How to advertise a personal real estate corporation.
  3. How to receive remuneration as a real estate corporation.
  4. Providing rental management and strata management services as a personal real estate corporation.

Guidelines

How to Name a Personal Real Estate Corporation

The legal name of your personal real estate corporation must include:

  • The legal name, a recognizable short form of the legal name, or the licensee name of the controlling individual; and
  • The term “personal real estate corporation”.

For example, for a controlling individual whose legal name is Robert Smith, the legal name of a personal real estate corporation can be one of the following:

  • Robert Smith personal real estate corporation (legal name and the term “personal real estate corporation”)
  • Rob Smith personal real estate corporation (recognizable short form and the term “personal real estate corporation”)
  • Rob Smith personal real estate corporation (recognizable short form name of the controlling individual as registered with BCFSA and the term “personal real estate corporation”)

How to Advertise a Personal Real Estate Corporation

If you advertise a personal real estate corporation, you must only use the licensee name of the personal real estate corporation in your advertising. This includes advertisements in social media, other print advertising, television and radio. It is not you, as an individual, who are providing the services on behalf of your brokerage, but rather your personal real estate corporation.

When licensing a personal real estate corporation, make sure that the legal name of the personal real estate corporation is the name in which you wish to advertise. Using the term PREC is not permitted. You must use the entire “personal real estate corporation” term.

BCFSA is aware that some MLS® systems, due to space limitations in their data fields, are not able to show the full licensee name of a personal real estate corporation and show the abbreviation “PREC”. For this reason, BCFSA has adopted the following administrative policy:

  • Documents generated by an MLS® data base may use an asterisk after the name of the related controlling individual so long as that asterisk is displayed in an easily readable way elsewhere in the document followed by the term “personal real estate corporation.”
  • For example, an MLS® generated advertisement identifying the licensee name of ‘Susan Wong Personal Real Estate Corporation’ could display that name in the following manner:

Susan Wong*

with the term “*personal real estate corporation” being displayed in an easily readable way elsewhere in the advertisement or document.

This policy applies only to advertisements or documents that are generated by an MLS® database. All other documents or forms of advertising which identify a personal real estate corporation must do so using its licensee name. In the above example, this would be:

Susan Wong Personal Real Estate Corporation

Advertising of a personal real estate corporation must comply with BCFSA’s advertising requirements. Click here for more information on advertising.

How to Receive Remuneration as a Personal Real Estate Corporation

As a real estate professional, you may only receive remuneration through the brokerage you are licensed to. When you operate under a personal real estate corporation, it is your personal real estate corporation that is providing the services and therefore the corporation is the entity which must be paid by your brokerage.

In situations where you have formed a team, the distribution of remuneration must be done by the brokerage; that is, the licensed team members (or their respective personal real estate corporations) must be paid separately by the brokerage, not by one of the team member’s personal real estate corporations.

Visit Remuneration Information here for more information.

Providing Rental Property Management Services and Strata Management Services as a Personal Real Estate Corporation

The Real Estate Services Rules (“Rules”) allow a real estate professional to provide certain real estate services without RESA applying to you in respect of those services. These include providing rental property management services with respect to rental property that you or your family own, and providing strata management services to a strata corporation in which you are the owner of a strata lot.

These exemptions are not available to personal real estate corporations. A personal real estate corporation can only provide rental property management services to real estate it owns in its name through the brokerage with which the personal real estate corporation is licensed.

Relevant Cases

Case #1: Failure to Identify Name of Personal Real Estate Corporation in Advertising

The individual licensee and his personal real estate corporation published advertisements that did not clearly indicate the individual licensee’s or the personal real estate corporation’s licensee names.

Contraventions: Sections [Duty to act honestly and with reasonable care and skill], [Licensee names must be indicated] and [Restrictions and requirements related to advertising generally] of the Rules.

Read the full case

Managing Broker Considerations

If you are a managing broker who has personal real estate corporations licensed with your brokerage, you must ensure that remuneration is paid to the personal real estate corporation, and not directly to the controlling individual. Remuneration can be paid to the controlling individual from the personal real estate corporation if all the requirements of the Real Estate Services Regulation (“Regulation”) are met.

If you are a managing broker who has a personal real estate corporation, you must ensure that you are paid through your personal real estate corporation when providing real estate services.

Applicable Section of RESA/Real Estate Services Regulation/Real Estate Services Rules

  • Section 25, Real Estate Services Rules, Personal real estate corporation must give notice of business changes
  • Section 33, Real Estate Services Rules, Duty to act honestly
  • Section 34, Real Estate Services Rules, Duty to act with reasonable care and skill
  • Section 38(3), Real Estate Services Rules, Licensee names
  • Section 39, Real Estate Services Rules, Licensee names must be indicated
  • Section 40(3), Real Estate Services Rules, Restrictions and requirements related to advertising generally
  • Section 94, Real Estate Services Rules, Management of rental real estate owned by licensee
  • Section 95, Real Estate Services Rules, Management of rental real estate owned by licensee’s family
  • Section 96, Real Estate Services Rules, Management of strata corporation by licensee who is an owner
  • Section 10.2, Regulation, Personal real estate corporations
  • Section 10.3, Regulation, Corporate qualifications
  • Section 10.4, Regulation, Licensing of personal real estate corporation and its related controlling individual
  • Section 10.5, Regulation, Application for personal real estate corporation licence
  • Section 10.6, Regulation, Relationship between personal real estate corporation and controlling individual
  • Section 10.7, Regulation, Corporation must maintain attributes
  • Section 10.8, Regulation, Licences of corporation and controlling individual to reflect each other
  • Section 10.9, Regulation, Application of discipline and enforcement provisions

Definitions

Affiliated person: in relation to a controlling individual, means

  1. the spouse of the controlling individual,
  2. a child of the controlling individual,
  3. a corporation, all of the shares of which are beneficially owned by one or more of the controlling individual and the other individuals referred to in paragraphs (a) and (b), or
  4. a trust, all of the beneficiaries of which are one or more of the controlling individual and the other individuals referred to in paragraphs (a) and (b)

Controlling individual: in relation to a personal real estate corporation, means the individual who is the sole voting shareholder of the personal real estate corporation

Personal real estate corporation: means a corporation that is licensed in accordance with this Part

Personal real estate corporation licence: means a licence issued to a corporation in accordance with this Part