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BC gets serious about cracking down on assignment clauses

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Real Estate Professional | 24 Feb 2016, 08:15 AM Agree 0
After a report surfaced about the prevalence of assignment clauses in British Columbia’s housing market, the province’s real estate board has stepped in and promised action
  • Erik | 24 Feb 2016, 10:52 AM Agree 0
    This is a Joke let the market take care of it self, who is going to pay the sellers the money lost because Gov't regulation crashes the market.
  • | 24 Feb 2016, 10:56 AM Agree 0
    Thank goodness for investigative reporting and the Globe and Mail for uncovering this scandal!
  • Investor | 24 Feb 2016, 11:14 AM Agree 0
    Erik, do you understand without regulations .....against assignments ......this is to curb this type of real estate speculation will get way out of control....may force real estate prices to crash harder in B.C
  • James | 24 Feb 2016, 12:19 PM Agree 0
    What a useless waste of time, more regulation for the nanny state. People have been making money on a rising real estate market since 1965, that's what the flippers are doing. Getting rid of them will not change real estate prices. IT WILL NOT. I am a real estate investor, I am not a flipper. I invest long term and I use assignment clauses because the offer is made in my active company, and on completion I form a new company or put it into one of my other holding companies. It is a business decision at that point. This BS regulation will just get in my way of providing low cost, good condition, affordable rentals to the market, which is what I do.
  • Mark | 24 Feb 2016, 01:03 PM Agree 0
    I agree with James and Erik. I don't see how assigning contracts fuels speculation. Why does the government think they need to "fix" every aspect of our lives. Perhaps artificially low "government controlled" interest rates are part of the speculation problem.
  • Tony | 24 Feb 2016, 01:17 PM Agree 0
    They need to stop foreign money , mainly Asian money, from causing the biggest RE bubble in Canadian history. Stop letting them launder money using our real estate and paying nothing in speculation taxes at the same time. Toronto is not far behind Vancouver also.
  • mike m | 24 Feb 2016, 01:37 PM Agree 0
    Australia has introduced some time ago the following - Only NEW house (never occupied) can be purchased by FOREIGN buyer.
    They can't buy older houses.
    If they do, and get caught - severe penalty in thousands of $$ is imposed and said property must be sold immediately on open market.
    This leaves "used" 1 year houses for domestic purchasers.
    Not judging whether it is good or bad, just saying what others are doing to solve problem.
  • | 24 Feb 2016, 02:41 PM Agree 0
    Any agent who is going to buy a property from their own client and flip it for more is doing a huge disservice to their client. It is our job as agents to get the most amount of money for our client, NOT ourselves! As far as I am concerned those agents who would do this should no longer have the ability to represent clients or worse. It makes me sick... Assignments are needed in certain situations but this is abuse, of the worst kind! Agents with this practice are the problem, not the clauses in the contract.
  • Tony | 24 Feb 2016, 02:44 PM Agree 0
    At least Australia is doing something, this Federal and BC government is completely clueless . You know its bad when doctors are leaving Vancouver because they cant afford a house LOL.
  • | 24 Feb 2016, 02:56 PM Agree 0
    Too many realtor don't really understand faduciary duties that they own their clients nor they really care more than half of the realtors can't even explain faduciary duties or give examples on how to act in certain situations. Most realtors only looking after their own pocket not their clients best interest. They got their real estate license because they think it's easy money. They themselves don't see or believe in the value of a realtor. These people getting into real estate only hurt our industry and give us a bad name. Everyone should be interviewed before given license if that can be done.
  • nick | 24 Feb 2016, 03:23 PM Agree 0
    In ontario law suits would be flying everywhere. I have a legal and ethically obligation to let my seller know the value of the property. If it getting flipped prior to closing for much more money then obviously i was negligent in giving them the market value. This is actionable and you can bet that lawyers would have a field day with my errors and omissions insurance. BC obviously does not follow these same rules.
  • Commercial Guy | 25 Feb 2016, 09:39 AM Agree 0
    The loophole being exploited , making the whole business legal, is they are using straw buyers to actually contact and buy the affected properties - assistants etc., and then buying the contract from them under the assignment clause. The original owner is never the agent's client so there is no fiduciary relationship with the ripped off owner. This allows the the agent to skate scot free no matter what.

    There is no way to change this without hurting some class of the public.

    The ridiculous price mark-ups being paid are from a class of buyer that simply wants to park money in Canada so they have the cash on hand to buy outright without a mortgage and therefore no bank appraisals are done. They would like to make money but they are happy with a return of negative 50%

    Yes you read that right - some of them only want to ensure that no matter what happens they can rely on getting half of their money back!

    If you ban assignments then the folks who need it the most i.e. "working Canadians" will be hurt the most - folks whose financial situation changes from a death, injury or job loss before closing.

    Flips and assignments are common in Ontario where I have practised for 29 yrs in the commercial realm and I have intimate knowledge of some of them - an agent relative of mine helped set the case law in Canada around an agent's duty to his client with expert testimony in a swindle in the 1980's

    I have personally used assignment clauses when a commercial client personally buys for a company that has not yet been formed, forms it, then assigns on closing - never having made an extra dime as an agent personally on the many assignments I have written
  • | 25 Feb 2016, 01:09 PM Agree 0
    I am waiting for this... This agent should be held accountable!
  • | 29 Feb 2016, 04:46 PM Agree 0
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