Homebuyers, sellers and real estate agents will soon need to comply with new rules that will apply to residential real estate contracts. B.C. Premier Christy Clark announced that as of May 16, 2016, anyone involved in a residential home sale will need to include a clause that will give the original seller of the home ownership of any profit made from a subsequent assignment sale.
The new rules come after the premier promised, in March, to amend how assignment sales—also known as shadow flipping—were being conducted in this western province.
Sellers can amend or remove this now mandatory new condition, if they so choose.
“Real estate consumers now have a tool to help them decide whether they want their contracts to be assignable,” says B.C. Real Estate Association (BCREA) President Deanna Horn. “Like many other provisions in the contract, buyers and sellers have the option of keeping the new paragraph, changing it or striking it out completely—but at least the conversation is more likely to happen now.”
BCREA says it supports the new rules and will help real estate agents to implement the new rules.
“These new regulations are designed to empower real estate consumers to make informed decisions in their own best interests,” says B.C. Real Estate Council Chair Marylou Leslie. “As the regulatory body responsible for administering the Real Estate Services Act, we will be working on many fronts to make sure the requirements are well understood, that licensees comply with their new obligations, and that comprehensive monitoring and enforcement programs are put into place.”
Later this month, BCREA will also begin collecting data on citizenship of buyers through the Property Tax form.