Updated real estate rules will better protect consumers: industry association

A draft bill to update the 55-year-old legislation governing the real estate industry offers more protections for both consumers and real estate agents, says the head of an industry association.

"We're still trying to govern our industry the way it was written in 1964," said Bill Stirling, CEO of the Newfoundland and Labrador Association of Realtors, after a public hearing of the government services committee Monday at the House of Assembly in St. John's. The committee isreviewing the draft Real Estate Trading ActMonday.

"It's time to modernize, it's time to bring our legislation into the new millennium, into the digital economy," said Stirling.

The push to change the rules comes after the 2016 collapse of Exit Realty on the Rock, which left more than 160 unpaid debts totalling more than $1.8 million on the books as part of the company's bankruptcy. Those owed money include more than 50 real estate agents owed nearly $440,000 combined.

Exit Realty on the Rock owner Anne Squires pleaded guilty earlier this year tocounts of fraud, theft, forgeryand breach of trust.

An agreed statement of facts filedat Newfoundland and Labrador Supreme Court in St. John's on Monday detailed how Squires faked sales agreements some for non-existent properties to bilk half a million dollars out of acompany that advances commissions to real estate agents.

Lessons learned from Exit Realty

Stirling said in June that the lessons learned in Exit Realty's collapse would inform the legislative changes now in the works. On Monday, he said the recommendations for those changes includestronger protections for both consumers and real estate agents around conflict resolution and dispute resolution on deposits when a transaction doesn't close.

"There's a whole pile of modernization, both for the consumer and for the professionals in the industry," Stirling said.

The Newfoundland and Labrador Association of Realtors submitted several suggestions for the bill to the committee, including the automatic return of deposits if a good-faith conditional offer falls through, the creation of a recovery fund for disputed trust deposits, and the addition of random spot audits by Service NL staff.

Stirling spoke highly of the process of developing the new legislation, which he hopes will be passed this fall.

"Any time you can engage stakeholders in the development and the discussionof new legislation, Ithink that makes for better governmentand better legislation, better rules for how we organize," he said.

The previous Liberal government tabled a bill to update the act in the spring, but the provincial election was called before it could be passed.The government services committee is expected to submit a report after the next legislative session begins Nov. 4.

Read more from CBC Newfoundland and Labrador