Real Advice E-News Issue 31 (August 20, 2018)

Real Advice is a weekly e-newsletter helping licensees prepare for regulatory changes.

August 20, 2018

BC Wildfires: What You Need To Know

As wildfires continue to burn across BC, RECBC’s thoughts are with the thousands of British Columbians on evacuation alert, and the firefighters working to protect communities, homes and businesses.

For those people with pending real estate transactions in fire-affected areas, the situation is even more uncertain: we know that many of your clients are likely asking you questions about how the fires will affect their home insurance and their ability to close on the transaction.

RECBC is here to support you in your efforts to assist your clients in these extraordinary circumstances.

What to do if a property is no longer (or may no longer be) insurable

In some cases buyers with accepted offers who have removed financing subjects have found that insurance companies have withdrawn their approval to insure the property due to the risk of damage from the fires. When this happens the lenders may also withdraw their approval for funding of the mortgage.

If you have a client in this situation, you can advise them to:

• contact their insurance company and lender to determine any steps required for the home to be insured again,
• consider contacting their insurance broker if the initial insurer refuses coverage or there are issues with coverage to discuss their options,
• consider requesting an extension on the completion of the sale,
• seek independent legal advice, especially if they want to re-open the contract.

If you have a client who is worried about losing insurance approval, they can:

• check with their insurance provider to confirm whether the transaction will be jeopardized by an encroaching wildfire,
• consider contacting their insurance broker to discuss their options if the initial insurer refuses coverage or there are issues with coverage.

If you have a client who is facing insurance policy renewal in a potential wildfire zone, you should tell them to:

• contact their insurance broker to discuss their options, and
• consider shopping around and comparing policies from a variety of insurance providers.

For more information on this topic, see Fire/Property Insurance in the Disclosure Issues section of the Professional Standards Manual.

Put a priority on communication

As people begin to return to evacuated areas, we encourage you to reach out to your clients who are in the middle of transactions to discuss their situation.

Maintaining communications between the seller, the buyer and the licensees involved in the transaction is the best chance of resolving issues for all parties.

How to fulfill brokerage reporting responsibilities

Managing brokers in evacuated areas may have questions about how to fulfill their record-keeping responsibilities or their fiscal year-end reporting requirements. We can advise you on acceptable methods for recreating records if these are damaged by fires, and work with you on meeting reporting deadlines. We encourage managing brokers to speak with our Audit department if they have concerns or questions about their record-keeping responsibilities or their fiscal year-end reporting requirements in light of the fires: contact info@recbc.ca.

Published on Aug 21, 2018