Annual Report 2016
recbc.ca
Contents About this Report 1 About the Real Estate Council 1 Message from the Chair 2 Message from the Executive Officer 3 Educating and Licensing Professionals 5 Protecting the Public 10 Engaging with Consumers and Licensees 18 Our Vision 21 Governance and Staff 23 Financials — Financial Review 25 — Auditor’s Report 26
About This Report This report describes the work and activities of the past year, highlighting key accomplishments in furtherance of the Real Estate Council’s mandate. It reflects the hard work and dedication of many individuals—staff members, Council members, and volunteers on the Council’s many Committees and Advisory Groups—who have committed their time and expertise to safeguarding the public interest in real estate transactions. Statistics in this report cover the period from July 1, 2015 to June 30, 2016 unless otherwise noted. Throughout this report, you will find references to "Looking Ahead" activities. These are initiatives the Council will be implementing as a result of recommendations received from the Independent Advisory Group convened by the Council in 2016 to review the regulatory framework for licensed real estate professionals in BC. Note: Due to changes in data collection practices, year-to-year comparisons are not always available.
About The Real Estate Council of British Columbia The Real Estate Council of British Columbia regulates licensed real estate professionals to protect consumers and serve the public interest. We license the more than 23,000 individuals and brokerages engaged in real estate sales, rental property management and strata management; we set and enforce standards for entry qualifications; we monitor and maintain standards of practice through our proactive Office and Records Inspection Program; we investigate complaints against real estate licensees on behalf of the public; and we discipline licensees who have breached the Real Estate Services Act and committed professional misconduct.
Real Estate Council of British Columbia | annual report 2016
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Message from the Chair On behalf of the members of the Real Estate Council of British Columbia, I am pleased to present our Annual Report for the year ended June 30, 2016. During the course of this year, significant changes to the regulation of the real estate industry in British Columbia were initiated. In February 2016, the Council took steps to enhance consumer confidence in the real estate industry by announcing the creation of an Independent Advisory Group to review the regulatory framework and the standards of conduct for licensed real estate professionals. Marylou Leslie, Council Chair 2015–16
The Council will remain focused
The recommendations of the Independent Advisory Group, submitted in its Final Report in June 2016, will further strengthen the Council’s ability to regulate, demanding the highest levels of professional practice from licensees and enabling the Council to impose disciplinary penalties that are better aligned with infractions and with the realities of today’s market. The Council, working in partnership with government, the Office of the Superintendent of Real Estate, and consumer and industry stakeholders, is actively engaged in putting these recommendations into practice, a number of which help to further objectives identified in the Council’s strategic planning sessions in October 2015. In July 2016, legislative amendments to the Real Estate Services Act were passed to replace the Council’s governing board and increase oversight by and accountability to government. I am confident that in the months and years ahead, under the new governance framework to be introduced in the fall of 2016, the Council will remain focused on its priorities—protecting the public interest by enforcing the standards of conduct for licensed real estate professionals.
public interest by enforcing
I would like to express my gratitude to the members of the Council for their support during the past year, to the staff of the Council for their hard work and commitment, and to the many volunteers who have contributed to the work of the Council as Advisory Group or Committee members.
the standards of conduct for
Sincerely,
on its priorities—protecting the
licensed real estate professionals.
Marylou Leslie chair
About Marylou Leslie Marylou has been a full-time REALTOR® since 1989. As a longstanding volunteer committed to enhancing the professionalism of the real estate industry, Marylou has been an active member of the Fraser Valley Real Estate Board since 1991. She was elected to the Real Estate Council of British Columbia in 2011 and became Chair of the Council in 2015.
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Real Estate Council of British Columbia | annual report 2016
Message from the Executive Officer The past year has seen the Real Estate Council of British Columbia respond to a variety of challenges and changes arising from the unprecedented growth of the real estate market. The Council, building on our Robert O. Fawcett, nearly 60 years of experience in Executive Officer regulating the conduct of real estate professionals, continues to make changes that enable us to meet the demands of a rapidly evolving industry, and to provide consumers with the strong regulation, transparent processes, and accessible services and resources they need and deserve. It has been my honour to serve as the Executive Officer of the Council since 1995. Later this fall, I will be retiring. As I look back at the Council’s achievements over the past twenty-one years, I am proud of our record of achievements, and of our commitment to high standards of education, investigation, regulatory transparency, and efficiency.
Council will see changes to its governance structure and rule-making ability, but will gain new enforcement tools.
The Council’s many accomplishments over its long history have been founded in the recognition that as a regulator it must continuously adapt to keep pace with industry changes, and with the changing needs of consumers. The Council has never stood still, and the past year was no exception. In September 2015, the Council and its education providers, the University of British Columbia and the British Columbia Real Estate Association, were recognized for the excellence of the education programs provided to real estate licensees with the Pre-Licensing Education Award and the Post-Licensing Education Award from the Association of Real Estate License Law Officials. The Council successfully concluded its 2012-2015 strategic plan and initiated a planning process to identify strategic priorities over the coming three to five years. That process will help guide our direction and focus for addressing key opportunities and challenges. Following several months of research, environmental scans and stakeholder interviews, culminating in a two-day planning workshop in October 2015, the Council began the development of a strategic plan that will articulate the Council’s goals and objectives in the following core areas: • Ensuring that real estate education mandated by the Council fully equips licensees with the skills and knowledge to provide competent real estate services and comply with legislated requirements. • Enhancing public protection through measures to promote the industry-wide development of high levels of professional competence. • Enhancing public protection by increasing the reach and effectiveness of the Council’s consumer awareness resources and associated outreach efforts. • Ensuring the Council’s disciplinary measures are achieving the desired effectiveness. We look forward to further developing these strategic goals and initiatives in the months ahead, integrating them with the ongoing work of implementing recommendations from the Independent Advisory Group.
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This year marked the tenth anniversary of the introduction in BC of the licensing of strata managers. When the Council began regulating strata management professionals under the authority of the Real Estate Services Act in 2006, BC was the only jurisdiction in Canada to do so. In the years since, we have been proud that other provinces have looked to the Council’s model of regulation as they establish licensing regimes for strata managers. In January 2016, the Council increased the accessibility of its guidance for licensees and for consumers by introducing a Professional Standards Advisor position to answer inquiries and provide informational resources. New additions to our legal, compliance, and audit departments increased our ability to monitor, investigate and discipline in the public interest. Most notably, in February 2016, the Council took the initiative to create an Independent Advisory Group (IAG) to review standards of conduct for real estate licensees in BC, and to make recommendations to enhance the Council’s ability to protect the public. As a result of legislative amendments made in response to the recommendations, the Council will see changes to its governance structure and rulemaking ability, but will gain new enforcement tools, including higher maximum penalties and increased accountability for managing brokers. As the Council prepares a swift and effective implementation of the recommendations of the IAG, in partnership with the Superintendent of Real Estate and with the support of the Ministry of Finance, I am confident that the organization is well equipped to meet the challenges ahead.
I am confident that the organization is well equipped to meet the challenges ahead.
I would like to thank all the past members of the Council, both elected and appointed, for their dedication and commitment to protecting the public interest and delivering efficient and effective regulation of licensed real estate professionals. I would like to thank Marylou Leslie and Susan Lynch in particular, for their tireless stewardship throughout the past year as Chair and ViceChair of Council. Finally, I want to express my enormous gratitude to the hard-working staff of the Council, who diligently carry out the important day-to-day work of regulation, respecting both the licensees whom we regulate and the public whose interest it is our duty to safeguard. Sincerely,
Robert O. Fawcett executive officer
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Real Estate Council of British Columbia | annual report 2016
Educating and Licensing Professionals Establishing requirements for the foundational licensing education program and continuing education program, to promote regulatory compliance, consumer protection, and competent, knowledgeable and professional service.
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educating and licensing professionals
Licensing Education Program Before applying to become licensed to provide real estate services, applicants must successfully complete a licensing education program mandated by the Council. The Real Estate Council determines the competency requirements that all applicants must meet educationally in order to qualify for licensing, and works with its partners in course delivery, the University of British Columbia and the British Columbia Real Estate Association, to ensure that the licensing education program upholds current best practices of adult education. For 58 years, the University of British Columbia has administered the real estate licensing education for the Real Estate Council. British Columbia is the only jurisdiction in Canada to engage a university to oversee licensing education. As a result, BC’s new licensees are considered to be among the best prepared in North America. Requiring no less than ten weeks to complete, the licensing courses delivered by the Real Estate Division, Sauder School of Business, at the University of British Columbia, are designed to provide learners with the fundamentals for practice and to equip them to understand
how they may apply those fundamentals in order to comply with the legislated conduct standards as licensed real estate professionals. Prospective applicants must also pass a licensing examination in order to successfully complete a licensing course, before proceeding to the next phase of the licensing education program. Individuals who wish to provide trading services are further required to complete a six-month Applied Practice course including mentorship before receiving their permanent licence. The Applied Practice course, administered by the British Columbia Real Estate Association on behalf of the Council, prepares learners for the realities of practice by focusing on the regulatory requirements and providing hands-on practical experience.
Looking Ahead > The Council will be initiating a comprehensive review of educational programming, including licensing course curriculums, continuing education, testing requirements, and English language proficiency requirements.
Successful Completion of Licensing Examination Broker’s Licensing Examination: 92 Rental Property Management Licensing Examination/Rental Property Management Supplemental Examination: 276 Strata Management Licensing Examination/Strata Management Supplemental Examination: 151 Trading Services Licensing Examination/Trading Services Supplemental Examination: 2,248
Successful Completion of Applied Practice Course Residential Trading Services Applied Practice Course/ Commercial Trading Services Applied Practice Course: 2,153
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Real Estate Council of British Columbia | annual report 2016
educating and licensing professionals, continued
Continuing Education As part of the Council’s commitment to competent practice and public protection, all licensees are required to complete mandatory continuing education during each licence term. The Council’s Relicensing Education Program requirements ensure that real estate licensees maintain the skills and knowledge necessary to provide clients with competent service and to comply with the requirements of the Real Estate Services Act and other legislation that may impact their practice.
Looking Ahead > The Council will implement competency-based assessments for mandatory continuing education in order to test licensees’ understanding and ability to implement course content.
In 2015, 11,559 licensees completed a Legal Update Course in fulfillment of the Relicensing Education Program requirement.
11,559 Licensees completed the mandatory Legal Update Course
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educating and licensing professionals, continued
Licensing Qualified Applicants Before making a decision to grant a licence, the Council reviews an applicant’s credentials, including education, training, and relevant experience. The Council also requires a criminal record check and background information on the applicant’s financial history, to
ensure that each applicant meets the Council’s Good Reputation requirements. The Council carefully considers any investigations, disciplinary actions or practice restrictions from other regulatory bodies to ensure that only qualified, competent and ethical applicants become licensed to provide real estate services to BC consumers.
Total Licensees Representatives
20,373
Associate Brokers
1,625
Managing Brokers (including sole proprietors)
1,368
Total individuals Brokerages (including branch offices)
23,366 1,489
(Figures calculated as of June 30, 2016)
Licensees by Category of Licence (Figures include: Representatives, Associate Brokers, Managing Brokers, Sole Proprietors.)
Rental & Strata: 333 Trading & Strata: 21 Trading, Rental & Strata: 422 Strata: 510 Rental: 572
Trading & Rental: 5,185 Trading: 16,323
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Real Estate Council of British Columbia | annual report 2016
educating and licensing professionals, continued
Distribution of Licensees County of Vancouver • Representatives: 9,526 • Associate/Managing Brokers: 1,470 County of Victoria • Representatives: 1,259 • Associate/Managing Brokers: 224 County of Nanaimo • Representatives: 894 • Associate/Managing Brokers: 165 County of Westminster—north of Fraser River • Representatives: 2,549 • Associate/Managing Brokers: 267 County of Westminster—south of Fraser River • Representatives: 3,979 • Associate/Managing Brokers: 405
Prince Rupert Cariboo
County of Yale • Representatives: 1,539 • Associate/Managing Brokers: 281
Va n N
Combined Counties of Kootenay/Cariboo/ Prince Rupert • Representatives: 627 • Associate/Managing Brokers: 181
Combined Counties of Kootenay/ Cariboo/ Prince Rupert: 3.5%
an
ai
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o:
Victoria: 6.3%
East Kootenay co
12 .
uv er
:4 7%
Yale: 8%
8%
West Kootenay Westminster North: 12% Westminster South: 18.8%
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Protecting the Public Addressing inquiries, concerns and complaints about the conduct of licensees, and taking appropriate action to protect the public interest.
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Real Estate Council of British Columbia | annual report 2016
protecting the public
Protecting the public interest is at the heart of the Council’s mandate, and all of its regulatory actions are guided by this overarching priority. When a concern is raised about the conduct of a real estate licensee or brokerage, the Council investigates the matter promptly. Any allegation that a real estate licensee may be putting consumers
Independent Advisory Group on Licensee Conduct In February 2016, the Council initiated the creation of an independent advisory group to review the regulatory framework and standards of licensee conduct, in response to concerns raised about licensee conduct reported by the media. Chaired by BC’s Superintendent of Real Estate, Carolyn Rogers, over the next four months the members of the Independent Advisory Group (IAG) undertook a comprehensive review of the regulatory regime. Members of the IAG were drawn from a broad range of public and private organizations and brought diverse perspectives, along with a clear understanding of good governance and the public interest to their task. In June 2016, the IAG released its final report, containing 28 recommendations for measures to increase consumer protection and enhance the Council’s ability to act in the public interest. The Council, working collaboratively with the Office of the Superintendent of Real Estate and with government, will be making the implementation of the group’s recommendations a key priority and strategic focus throughout 2016/17. The Council extends its thanks to the members of the IAG for their hard work, dedication and commitment.
at risk is taken very seriously by the Council’s investigation team. If the concerns are confirmed, a Discipline Committee of the Council has the power to issue a range of disciplinary actions, from reprimands to licence cancellations. Protecting consumers is the Council's most important duty.
Independent Advisory Group Members Carolyn Rogers, Chair Superintendent of Real Estate and Chief Executive Officer, Financial Institutions Commission Howard Kushner Barrister and Solicitor, Kushner Law Group Don Wright President and Chief Executive Officer, Central 1 Credit Union Audrey T. Ho Commissioner, British Columbia Securities Commission Bruce D. Woolley, Q.C. Stikeman Elliot Carol Geurts Associate Broker, Century 21 Veitch Realty Tony Gioventu Executive Director, Condominium Home Owners' Association of British Columbia Ron Usher General Counsel, Society of Notaries Public of British Columbia
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protecting the public, continued
Brokerage Audit and Inspection Program Brokerage inspections, conducted as part of the Council's ongoing Audit and Inspection Program, are an important component of the Council's compliance regime. The purpose of an audit is to ensure that each brokerage has proper controls in place to protect consumers' money held in trust at the brokerage, and to test for compliance with the requirements of the Real Estate Services Act, Regulation, and Rules. In addition to procedural office and records inspections, the Council may conduct a special office and records inspection as a result of a complaint, exceptions on an Accountant’s Report, or because of a previous office and records inspection showing deficiencies. Council auditors may access any documents that may relate to the brokerage’s dealings as a licensee.
At each brokerage inspection, Council auditors review • brokerage books and records • trade records, contracts and/or service agreements • required written disclosures filed by licensees, including disclosures of personal acquisition and disposal of real estate, disclosures of remuneration, and Notices to Seller Regarding Assignment Terms forms. When serious deficiencies are discovered during an inspection, a copy of the inspection report is forwarded to the Council’s Legal Department to determine whether there has been a contravention of the Real Estate Services Act, Regulation or Rules. If a Discipline Hearing Committee finds that there has been a contravention on the part of the brokerage, the managing broker, or a licensee, the Committee may reprimand, suspend, or cancel the licences of the licensees involved.
2016 2015 Change
Brokerage Inspections and Audits 257 209 23%
Brokerage Inspections and Audits Update Inspection History: 94 First Year Inspection: 85 Accountant's Report Issue Inspection: 24 Suspension Inspection: 17 Complaint / Inquiry Initiated Inspection: 12 New/Reinstated Managing Broker Inspection: 3 Books and Records Inspection: 3 Other: 19 Total: 257
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Real Estate Council of British Columbia | annual report 2016
protecting the public, continued
Professional Standards Advisor In January 2016, the Council moved to enhance public protection and promote increased rates of compliance among licensees, by introducing a Professional Standards Advisor. The Advisor position, created as a result of an internal process review conducted in 2015, is a proactive, preventive measure to reduce the incidence of noncompliance. Providing informational resources for licensees, directing them to appropriate areas of the Real Estate Services Act, Regulation or Rules, and answering questions about the required standards of conduct in professional situations, the Professional Standards Advisor helps to ensure that licensees understand their legislated obligations, and how to comply with those requirements. In May and June 2016, the Professional Standards Advisor conducted a number of webinars for managing brokers to assist them in understanding and complying with newly introduced regulations regarding assignments of contracts. Education and outreach activities, including participation at industry and consumer events, is expected to be an significant ongoing component of the Professional Standards Advisor role.
Inquiries Received — Consumer Inquiries: 2,384 — Licensee Inquiries: 2,871 — Total Inquiries: 5,255
(Jan 2016 to June 30, 2016)
Inquiries by Licence Category — Trading Services: 3,815 — Rental Property Management: 309 — Strata Management: 647 — Other: 484 Inquiries by Method of Communication — Phone calls: 4,187 — Emails: 1,366 (In some cases, an individual will contact the Council by phone and by email).
The Professional Standards Advisor also responds to inquiries from consumers, assisting members of the public to better understand the services they should expect from a real estate licensee, and when they may—or may not—have a basis for a complaint regarding a licensee's conduct. In 2016, the Professional Standards Advisor responded to an average of nearly 400 consumer inquiries each month.
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protecting the public, continued
Investigations The Council opens an investigation file for every formal complaint it receives about the conduct of licensees. Complaints come from consumers, from other licensees, from local real estate boards, and from other regulators or from law enforcement agencies. In addition, the Council has the ability to commence an investigation on its own initiative. The Council may open an investigation as a result of evidence uncovered in an audit or inspection, in the course of another investigation, or when it becomes aware of a court decision or news report that suggests professional misconduct on the part of a licensee. In 2015, a significant proportion of investigation files were opened on the Council's initiative. • Every complaint is carefully assessed to ensure that the Council has jurisdiction in the matter and that there is sufficient evidence to commence an investigation. • Council compliance officers contact the complainant to develop a clear understanding of the complaint and to ensure that the complainant fully understands the Council’s investigation and discipline process. • Respondents and their managing brokers receive copies of the complaint and are asked to provide the Council with a written response to the complaint, and to provide copies of all documents and records that relate to the complaint. The Council may also interview the licensee, as well as any third parties involved. • When an investigation results in sufficient evidence, it proceeds to the Council’s Complaints Committee, whose responsibility it is to review the complaint, the responses received from the licensee, and the results of the Council’s investigation.
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Real Estate Council of British Columbia | annual report 2016
The purpose of an investigation is to determine whether there appears to have been professional misconduct that contravenes the Real Estate Services Act, Regulation, Bylaws or Rules, or whether there appears to have been conduct unbecoming a licensee. If the Complaints Committee is satisfied that there is no indication of professional misconduct or conduct unbecoming a licensee, the Committee will close the file. If disciplinary action is warranted, the Complaints Committee may recommend a letter of advisement or a formal disciplinary hearing.
Looking Ahead > The Council will be enhancing its confidential reporting channels for consumers and licensees to facilitate reporting of potential misconduct.
protecting the public, continued
Key Performance Measures Investigations Opened As a result of complaints
556
*RECBC-initiated investigation
306
Total 862 *Initiated due to evidence uncovered in audits, other investigations, media reports, etc.
Sources of Complaints Real Estate Boards:18
Referred from Financial Institutions Commission: 8
Frequency of Investigations Frequency of investigations = the number of investigations opened, divided by the number of licensees.
Referred from other regulator/law enforcement: 9
2016 New Investigations:
Licensee Reported: 80
862
2015 New Investigations:
536
Consumers: 441
Frequency: 4%
Frequency: 2%
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protecting the public, continued
Disposition of Files
Disciplinary Process
Files handled
The Council has the authority, pursuant to sections 40 and 42 of the Real Estate Services Act, to hold formal disciplinary hearings.
Carried over from previous fiscal
485
New 862 Total 1347
Closed without further action No jurisdiction Complaint Abandoned/Withdrawn
162 22
Informally Resolved
129
No evidence/Unfounded
195
Qualification Hearing required on re-application
8
No further action recommended by Complaints Committee 8 Total administratively closed
524
Further Action 136
Letter of Advisement
50
Hearing recommended
182
Looking Ahead > The Council will be enhancing its information for the public, to ensure its complaints process is accessible and consumer friendly.
Real Estate Council of British Columbia | annual report 2016
Hearing and Consent Orders Consent Orders
106
Hearings — Discipline Hearings
2
— Special Compensation Hearings
7
— Qualification Hearings
Administrative Penalties
16
In the event that a licensee wishes to admit to the allegations of misconduct, the licensee has the right under section 41 of the Real Estate Services Act to make a proposal to settle the matter by way of a consent order. Proposed consent orders, in which the licensee admits to the misconduct, must include terms acceptable to counsel. Proposals are then reviewed by a Consent Order Review Committee of the Council, which may accept or reject each proposed consent order.
Total Hearings
1 10
protecting the public, continued
Disciplinary Sanctions The Real Estate Services Act allows the Discipline Committee to impose a range of disciplinary sanctions if it determines that a licensee has committed professional misconduct or conduct unbecoming a licensee. If there is such a finding, section 43(2) of the Real Estate Services Act requires the Discipline Committee to do one or more of the following: • reprimand the licensee; • suspend the licensee’s licence for a period of time and/or until specified conditions are met; • suspend the licence in urgent circumstances; • cancel the licensee’s licence; • impose restrictions or conditions on the licensee’s licence, or vary any applicable restrictions or conditions; • require the licensee to cease or carry out any specified activity related to the licensee’s real estate business; • require the licensee to enroll in and complete a course of study or training; • require the licensee to pay a disciplinary penalty in an amount of not more than $20,000 in the case of a brokerage or former brokerage, or not more than $10,000 in any other case.
Looking Ahead > In September 2016, amendments to the Real Estate Services Act came into effect, substantially increasing maximum fines against licensees and brokerages.
Emergency Suspensions in the Public Interest The Council can take urgent action to suspend a licence when it determines that there is an immediate risk to consumers, and that the time required to conduct an investigation would not be in the public interest.
Licence Conditions and Restrictions The Council may impose conditions or restrictions on the licences of individuals or brokerages. In 2016, the Council took unprecedented action to ensure that BC real estate brokerages are compliant with the Real Estate Services Act, imposing licence conditions that give the Council direct oversight of brokerage activities. These steps were taken to protect consumers while Council investigations proceeded.
Discipline Sanctions Suspensions in the Public Interest: 1 Licences Cancelled: 3 Withdrawal from Industry: 8 Licences Suspended: 24 Reprimand and Discipline Penalties: 57 Remedial Education: 53 Licensees Reprimanded: 74
Real RealEstate EstateCouncil CouncilofofBritish BritishColumbia Columbia | | annual annualreport report2016 2016
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Engaging with Consumers & Licensees Buyers and sellers expect integrity, accountability and competency from their licensee. Promoting professionalism is essential to the Council’s mission to protect the public interest.
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Real Estate Council of British Columbia | annual report 2016
engaging with consumers & licensees
In 2015/16, the Real Estate Council of BC continued to provide information for consumers about the services they can expect to receive from real estate licensees and about the process of buying or selling homes, to help consumers make informed choices. The Council's online consumer guides, Buying a Home in British Columbia and Selling a Home in British Columbia, were among the most frequently-accessed resources on its website. The provision of timely and high quality information to the public and licensees will be a particular area of focus for the Council moving forward, and in the coming year the Council looks forward
to enhancing the accessibility of its online and offline information about the complaints and discipline process, and expanding its outreach through consumer awareness campaigns, social media engagement, and earned and paid media. The Council received significant media attention over the past year. The Council responded to a large number of media inquiries related to concerns regarding licensee conduct, the Independent Advisory Group reviewing the regulatory framework for real estate professionals, investigations undertaken by the Council, and the introduction of new regulations regarding assignments of real estate contracts. In the year ahead media relations will be a continued focus, part of the Council's commitment to increasing consumer awareness, educating the public about new consumer protection measures, and increasing public confidence in the real estate industry.
Outreach in 2016 included:
22 Media Releases 23 Eblasts to Licensees 6 Report from Council Newsletters 8 Public Services Announcements 2 Webinars for Managing Brokers 2 Licensee Consultations on Proposed Changes to Council Rules 1 Press Conference Attendance at Industry Events and Presentations to Industry Professionals
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engaging with consumers & licensees, continued
Helping Licensees and Consumers Understand Assignments In May 2016, the provincial Government introduced new regulations to help real estate consumers make informed decisions about contract assignments before accepting an offer on their property. To assist licensees and consumers in understanding and complying with the new requirements, the Council developed online FAQs, added extensive material to its Professional Standards Manual, and delivered two webinars for managing brokers.
Looking Ahead > The Council will increase its public education and awareness efforts, including through consumer alerts to help members of the public identify, avoid, and report potential licensee misconduct.
Website Interactions 103,380 average unique pageviews per month Top Pages: — Trading Services Step by Step Licensing Guide: 56,308 unique pageviews — Real Estate as a Career: 56,889 unique pageviews — Professional Standards Manual: 42,561 unique pageviews — Buying a Home in BC: 39,908 unique pageviews — Selling a Home in BC: 33,165 unique pageviews — Complaints and Discipline: 26,647 unique pageviews.
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Our Mandate, Mission, and Values Mandate The Real Estate Council of British Columbia is a regulatory agency established by the provincial government in 1958. Its mandate is to protect the public interest by enforcing the licensing and licensee conduct requirements of the Real Estate Services Act. The Council is responsible for licensing individuals and brokerages engaged in real estate sales, rental and strata property management. The Council enforces entry qualifications, investigates complaints against licensees and imposes disciplinary sanctions under the Act. The Council is responsible for determining the appropriate education for individuals seeking to be licensed as real estate practitioners and arranging for licensing courses and examinations as part of the qualification requirement for licensing. Under the authority of the Council, licensing courses are delivered by the University of British Columbia’s Sauder School of Business (Real Estate Division). Mission The Real Estate Council of British Columbia protects the public interest by assuring the competency of real estate licensees in BC and ensuring their compliance with the Real Estate Services Act. The Council is accountable to and advises government on industry issues and encourages public confidence by impartially setting and enforcing standards of conduct, education, competency and licensing for real estate licensees in the province. Vision A self-regulated organization that is a leader in industry integrity, innovation and viability. Values The Council operates with the following principles and values: • Experience and Dedication
Council members are experienced real estate licensees and public appointees, dedicated to protecting the public interest in real estate services and to improving the industry. • Consultative Approach
Council supports a regular consultative approach with industry groups, government and the public. • Impartial, Effective Processes
Council members and staff are impartial in setting and enforcing standards of conduct through effective education, licensing, and compliance processes. • Cost-effective & Responsive Services
Council management and staff work to provide cost-effective, responsive services to consumers and the real estate industry by using current professional business practices and technology. • Open Communications & Trust
Council members and staff work co-operatively to create a working environment where frank and open communications and trust prevail.
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Committees Advisory Group/Committee Complaints Committee
The Complaints Committee orders hearings to determine whether a licensee has committed professional misconduct or conduct unbecoming a licensee, pursuant to section 35 of the Real Estate Services Act.
Consent Order Review Committee
The Consent Order Review Committee ensures that consent orders result in fair and appropriate decisions, and either accepts, varies or rejects penalty recommendations.
Education Advisory Group
The Education Advisory Group is a forum for input from industry sources, stakeholder organizations and educational institutions to strengthen and evolve real estate education.
Education and Licensing Committee
The Education and Licensing Committee considers educational exemption requests, liaises with the Education Advisory Group to ensure the Council is well-informed on educational issues, and researches and reports on issues affecting education and licensing.
Finance and Governance Committee
The Finance and Governance Committee oversees the budget, financial reporting and management obligations of the Council, identifying education and training for Council members, and providing advice to assist Council in meeting its fiduciary responsibilities.
Hearing Committees
Hearing Committees are convened to conduct disciplinary hearings, compensation hearings, and qualification hearings.
Real Estate Services Act (RESA) Advisory Group
The Real Estate Services Act Advisory Group is a forum to discuss the Real Estate Services Act, the General Bylaws, and the Council Rules.
Strata Management Advisory Group
The Strata Management Advisory Group is a forum for industry and public representatives to bring concerns and/or recommendations concerning strata management issues to Council.
Trading Services Advisory Group
The Trading Services Advisory Group is a forum for industry and public representatives to bring concerns, and/or recommendations regarding residential trading services to the Council.
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Real Estate Council of British Columbia | annual report 2016
Governance Members of Council July 1st, 2015 to June 30th, 2016 Marylou Leslie (Chair) • Counties of Westminster (North and South of the Fraser) Representative Member Susan Lynch (Vice-Chair) • Combined Counties of Kootenay, Cariboo and Prince Rupert Managing Broker/Associate Broker Member Barbara Barry • West Vancouver Lieutenant Governor-in-Council Appointment Colette Squires • Abbotsford Lieutenant Governor-in-Council Appointment
Elana Mignosa • Vancouver Lieutenant Governor-in-Council Appointment
Ralph Archibald • County of Vancouver Managing Broker/Associate Broker Member John Nagy • Delta (Leave of absence beginning Council appointed Strata Owner 01/10/15) Member Christopher Brown • County of J. Garth Cambrey • Coquitlam Vancouver Rental/Strata Management Representative Member Member Dennis Fimrite • County of David Peerless • County of Victoria Vancouver Managing Broker/Associate Managing Broker/Associate Broker Member Broker Member Susan McGougan • County of Calvin Lindberg • County of Nanaimo Vancouver Managing Broker/Associate Managing Broker/Associate Broker Member Broker Member
Subhadra Ghose • Combined Counties of Victoria, Nanaimo, Yale, Kootenay, Cariboo & Prince Rupert Representative Member Harvey Exner • County of Westminster (North of the Fraser River) Managing Broker/Associate Broker Member David Rishel • County of Westminster (South of the Fraser River) Managing Broker/Associate Broker Member Joe Pearson • County of Yale Managing Broker/Associate Broker Member
Front row L-R:, Susan McGougan, Marylou Leslie, Susan Lynch; Back Row L-R: Colette Squires, Robert O. Fawcett, Calvin Lindberg, David Peerless, Dennis Fimrite, David Rishel, Elana Mignosa, Christopher Brown, Harvey Exner, Subhadra Ghose, Joseph Pearson. Absent: Barbara Barry, Garth Cambrey, Ralph Archibald, John Nagy
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governance, continued
Staff The day-to-day management of the Council staff is the responsibility of the Executive Officer. The management team and staff support the delivery of programs and services for consumers and licensees.
As of June 30, 2016, the Council staff consisted of 49 full-time employees and one part-time employee.
Council Senior Staff Robert O. Fawcett Executive Officer The Executive Officer is responsible for the overall effective management of the organization, under the general direction of the Council and as prescribed in the Real Estate Services Act and Bylaws.
Lisa Kern Senior Supervisor, Licensing The Senior Supervisor, Licensing is responsible for the review and processing of licence applications, renewals, and associated inquiries.
Lisa Holst Director, Accounting & Audit The Director, Accounting and Audit is responsible for the review of compliance reporting by brokerages, maintenance and monitoring of the external auditing program, and internal financial reporting. Geoff Thiele Director, Legal Services The Director, Legal Services oversees the management, planning and organization of the legal services and compliance departments, and provides legal advice to the Council as required. Maureen Coleman Professional Standards Advisor The Professional Standards Advisor assists licensees to practice in a professional manner consistent with the requirements of the legislation, and assists consumers in understanding licensees’ legislated obligations and real estate standards of practice.
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Real Estate Council of British Columbia | annual report 2016
Caroline Allen Education & Licensing Officer The Education & Licensing Officer is responsible for planning, management and evaluation of real estate education, working closely with course providers, such as the University of British Columbia and the British Columbia Real Estate Association. Marilee Peters Communications Officer The Communications Officer plans, coordinates and evaluates internal and external communications that engage and inform the Council’s stakeholders and the public. Debbie Morreau Information Technology Project Manager/Business Analyst The IT Manager/Business Analyst is responsible for coordinating internal computer networks, IT support and maintenance, including supporting the functioning of the licensing database system and IT strategic initiatives.
real estate council of british columbia
Financial Review as at June 30th, 2016
Lisa Holst, Director, Accounting and Audit
This financial review is based on the audited financial statements for the year ended June 30, 2016 and the comparative figures for the year ended June 30, 2015.
Overview
General operations are funded predominantly by revenues from licensing and assessment fees required by the Council Bylaws under the Real Estate Services Act. The fees collected are for a twoyear period in advance and are recognized as income in the period received. Deferred revenue is recognized on the effective date of the licence. Other sources of revenue include application fees, course revenue, net interest income, and discipline hearing cost recoveries. All receipts for discipline penalties may only be expended by the Council for the purpose of education of the public, licensees and other participants in the real estate industry in BC about the operation and regulation of the industry and issues related to real estate and real estate services. These funds are held in trust and segregated from general operating funds.
Operations–General and Education Funds Revenues
Total revenues in fiscal 2016 are $7,553,804, an increase of $1,628,970 from fiscal 2015 of $5,924,834. Recognized licensing and assessment revenues are $6,987,030 for fiscal 2016, an increase by $1,542,914 from $5,444,116 in fiscal 2015. Effective January 1, 2016 assessment fees increased by $100. Recognized course revenues
in fiscal 2016 are $352,225 and have increased by $88,975 from $263,250 in fiscal 2015. Recognized interest, education fund, and other revenue in fiscal 2016 is $214,549 and have decreased $2,919 from $217,468 in fiscal 2015. Expenditures
Expenditures include general administration and facilities, Council and committee honorariums, per diems, meeting costs, and other corporate expenses, such as communications activities, election costs, and grants and endowments. Total expenditures increased in fiscal 2016 by $258,491(4%) to $6,786,988 from $6,528,497, the previous year. Administrative expenditures were higher by $412,110 (11%), investigation expenditures lower by $236,636 (9%), and other expenditures were higher by $83,017 (15%). Net Operating Deficit from Operations and Accumulated Net Assets
The net excess revenue over expenditures for the year was $766,816 compared to a deficit of $603,663 in fiscal 2015. This excess resulted in an increase in the unrestricted accumulated net assets of $820,830 from $3,149,846 in fiscal 2015 to $3,970,676 in fiscal 2016 and the Education Fund decreased $54,014 from $229,266 in fiscal 2015 to $175,252 in fiscal 2016. Net Current Assets (working capital)
Net current assets were $2,511,019 at June 30, 2016 compared to $2,841,333 at June 30, 2015.
Real Estate Council of British Columbia | annual report 2016
25
Independent Auditors’ Report Vancouver, Canada • September 20, 2016
To the Members of Real Estate Council of British Columbia We have audited the accompanying financial statements of the Real Estate Council of British Columbia, which comprise the statement of financial position as at June 30, 2016 and the statements of operations, changes in fund balances, and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian accounting standards for not-for-profit organizations, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including
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Real Estate Council of British Columbia | annual report 2016
the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Real Estate Council of British Columbia as at June 30, 2016 and the results of its operations and its cash flows for the year then ended, in accordance with Canadian accounting standards for not-for-profit organizations.
chartered accountants
Statement of Financial Position June 30
2016 2015 $ $
ASSETS Current Cash and cash equivalents $ Short-term investments (Note 3) Accounts and accrued interest receivable Prepaid expenses
2,232,914 $ 1,555,457 477,000 1,121,117 201,537 197,568 132,021 148,287
3,043,472 3,022,429
Long-term investments (Note 3) Property and equipment (Note 4)
1,788,914 245,995
$ 5,078,381
631,387 306,392
$ 3,960,208
LIABILITIES Current Accounts payable and accrued liabilities (Note 5) $ 424,863 $ 110,251 Deferred revenue 107,590 61,200 Deferred capital contribution (Note 6) — 9,645
532,453 181,096
NET ASSETS Unrestricted 3,970,676 3,149,846 Internally restricted (Note 7) 400,000 400,000 Education Fund (Note 7) 175,252 229,266
4,545,928
3,779,112
5,078,381 3,960,208 Commitments and contingency (Note 8) See accompanying notes and schedules to the financial statements.
On behalf of the Council:
Sue Lynch chair
Robert O. Fawcett executive officer
Real Estate Council of British Columbia | annual report 2016
27
Statement of Operations Year ended June 30, 2016
2016 2015
General Education General Education Fund Fund Total Fund Fund Total $ $ $ $ $ $
REVENUE Licensing Gross licence fees collected 1,912,730 — 1,912,730 1,727,860 — 1,727,860 Less payable to Superintendent of Real Estate 956,365 — 956,365 863,930 — 863,930
Net fees collected 956,365 — 956,365 863,930 — 863,930 Assessments 6,030,665 — 6,030,665 4,580,186 — 4,580,186 Course fees 352,225 — 352,225 263,250 — 263,250 Discipline penalties - 151,500 151,500 — 123,836 123,836 Investment income 53,572 — 53,572 74,342 — 74,342 Amortization of capital contribution (Note 6) 9,477 — 9,477 19,290 — 19,290
7,402,304
151,500
7,553,804 5,800,998 123,836 5,924,834
OPERATING EXPENDITURES Administrative expenditures (Sched.1) 3,779,644 — 3,779,644 3,367,534 — 3,367,534 Investigation expenditures (Sched.2) 2,370,087 — 2,370,087 2,606,723 — 2,606,723 Other expenditures (Sched.3) 431,743 205,514 637,257 460,233 94,007 554,240
Excess (deficiency) of revenue over expenditures
6,581,474
820,830
See accompanying notes and schedules to the financial statements.
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Real Estate Council of British Columbia | annual report 2016
205,514
(54,014)
6,786,988
766,816
6,434,490
94,007 6,528,497
(633,492) 29,829 (603,663)
Statement of Changes in Fund Balances Year ended June 30, 2016
Externally Restricted Funds (Note 7)
Internally Restricted Funds (Note 7)
Legal Defence Legal Fund – Unrestricted Technology Defence Special Education Fund Fund Fund Compensation Fund Total $ $ $ $ $ $ Net assets, June 30, 2014 Excess of revenue over expenditures for the year
3,783,338 100,000 150,000 150,000 99,437 4,382,775
Net assets, June 30, 2015
3,149,846 100,000 150,000 150,000 229,266 3,779,112
Excess of revenue over expenditures for the year Net assets, June 30, 2016
(633,492)
820,830
—
—
—
—
—
—
29,829
(54,014)
(603,663)
766,816
3,970,676 100,000 150,000 150,000 175,252 4,545,928
See accompanying notes and schedules to the financial statements.
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annual report 2016
29
Statement of Cash Flows Year ended June 30
2016 2015 $ $
Cash derived from (applied to) OPERATING ACTIVITIES Excess (deficiency) of revenue over expenditures 766,816 Adjustments for items not affecting cash Amortization of capital contribution (9,645) Amortization 142,014
(603,663) (19,290) 186,399
899,185
Changes in non-cash operating working capital Accounts and accrued interest receivable Prepaid expenses Accounts payable and accrued liabilities Deferred revenue
(3,969) (55,369) 16,266 (6,070) 314,612 58,330 46,390 (134,350)
(436,554)
1,272,484
INVESTING ACTIVITIES Sale (purchase) of short-term investments, net (Purchase) sale of long-term investments, net Purchase of property and equipment
644,117 (464,317) (1,157,527) 1,120,272 (81,617) (133,945)
(595,027)
(574,013)
522,010
Net increase (decrease) in cash 677,457 (52,003) Cash and cash equivalents, beginning of year 1,555,457 1,607,460 Cash and cash equivalents, end of year See accompanying notes and schedules to the financial statements.
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Real Estate Council of British Columbia | annual report 2016
2,232,914
1,555,457
Notes to the Financial Statements June 30, 2016
1. Nature of Operations
The Real Estate Council of British Columbia (the “Council”) is a regulatory agency established by the British Columbia provincial government. Its mandate is to protect the public interest by enforcing the licensing and licensee conduct requirements of the Real Estate Services Act (the “Act”). The Council is responsible for licensing individuals and brokerages engaged in real estate sales, rental and strata property management. The Council also enforces entry qualifications, investigates complaints against licensees and imposes disciplinary sanctions under the Act. Pursuant to section 149(1)(1) of the Income Tax Act (Canada), the Council qualifies as a non-profit organization and is exempt from income taxes.
2. Summary of significant accounting policies Basis of accounting
These financial statements have been prepared in accordance with Canadian accounting standards for not-for-profit organizations (“ASNPO”), Part III of the CPA Canada Handbook. Fund accounting
The Council follows the restricted fund method of accounting. The General Fund accounts for the Council’s program delivery and administrative activities. The fund reports unrestricted resources and restricted operating contributions. The Education Fund reports restricted resources that are to be used for education purposes in accordance with Note 7. Cash and cash equivalents
Cash and cash equivalents includes all balances held at banks excluding any overdraft amounts, and all highly liquid financial instruments purchased with an original maturity of three months or less. Cash equivalents consist of money invested in a term deposit and are recorded at cost plus accrued interest, which approximates market value. Property and equipment
Property and equipment are recorded at cost and are amortized on a straight-line basis over their expected useful lives as follows: Computer equipment Office equipment Automotive equipment Leasehold improvements renewal period, being
3 years 5 years 6 years term of the lease plus one 10 years
Revenue recognition
Restricted contributions related to general operations are recognized as revenue of the General Fund in the year in which the related expenses are incurred. Restricted contributions related to discipline penalties are recognized as revenue in the Education Fund. The Council collects licence and assessment fees for a two year period in advance. These fees are recognized as revenue in the General Fund in the period received because the Council has no continuing obligations with respect to the fees and does not refund licence and assessment fees. Licence and assessment fees received in the current period that relate to the subsequent period are recorded as deferred revenue.
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31
notes, continued
Course fees, interest and investment, and other income are recorded as revenue in the General Fund when received or receivable if the amount to be received can be reasonably estimated and collection is reasonably assured. Capital contributions received for the purchase of property and equipment are deferred and recognized as revenue in the General Fund at the same rate as the property and equipment’s amortization. Use of estimates
The preparation of financial statements in conformity with Canadian accounting standards for not-for-profit organizations requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the period. Actual results may differ from those estimates. Financial instruments
The Council’s financial instruments consist of cash and cash equivalents, short-term investments, accounts and accrued interest receivable, long-term investments, and accounts payable and accrued liabilities. Financial assets and financial liabilities are initially measured at fair value. The Council subsequently measures all of its financial assets and financial liabilities as follows: Financial instrument Cash and cash equivalents Short-term investments Accounts and accrued interest receivable Long-term investments Accounts payable and accrued liabilities
Subsequent measurement Amortized cost Fair value Amortized cost Fair value Amortized cost
Changes in fair value are recognized in excess (deficiency) of revenue over expenditures for the year.
3. Investments
2016 2015
Short-term investments GICs at 2.6% to 3.1% (2015—2.00% to 3.85%) maturing between February 16, 2017 and March 13, 2017 $477,000 $1,121,117 Long-term investments GICs at 1.65% to 2.35% (2015—2.35% to 2.6%) maturing between December 14, 2017 and June 14, 2021 1,788,914 631,387
$2,265,914 $1,752,504
The Council’s investment philosophy is to invest conservatively with highly rated counterparties to preserve capital while earning a reasonable rate of return.
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Real Estate Council of British Columbia | annual report 2016
notes, continued
4. Property and equipment
Cost
2016
Accumulated Amortization
Net Book Value
Computer equipment Office equipment Automotive equipment Leasehold improvements
$1,118,695 $992,474 $126,221 524,396 460,941 63,455 47,890 26,535 21,355 405,235 370,271 34,964
$2,096,216 $1,850,221
Cost
$245,995
2015
Accumulated Amortization
Net Book Value
Computer equipment Office equipment Automotive equipment Leasehold improvements
$1,069,055 521,827 47,890 401,294
$932,776 423,728 18,554 358,616
$136,279 98,099 29,336 42,678
$2,096,216
$1,850,221
$245,995
5. Government remittances payable
Included in accounts payable and accrued liabilities are government remittances owing for payroll remittances totalling $3,161 (2015–$1,446).
6. Deferred capital contribution
In 1997, the Council received $250,000 from the Real Estate Errors and Omissions Insurance Corporation as a contribution towards the Council’s licensing database with a modern information management system. During fiscal year 2013, the remaining balance in this contribution, totalling $57,870, was spent on the development of a new information management system. The deferred capital contribution balance at June 30, 2016 was $Nil (2015–$9,645).
7. Restricted fund
2016 2015
Technology Fund (a) Legal Defence Fund–General (b) $100,000 $100,000 Legal Defence Fund–Special Compensation Fund (b) 150,000 150,000 150,000
Total internally restricted net assets Education Fund (c)
400,000 400,000 175,252 229,266
$575,252 $629,266
Real Estate Council of British Columbia |
150,000
annual report 2016
33
notes, continued
(a) Technology Fund The Technology Fund is to be used for modifications to new licensing systems software. (b) Legal Defence Funds The Legal Defence Fund is to be used to pay, on behalf of the Council, its members or employees (collectively, the “Party”), all sums which the Party becomes liable to pay as compensating damages arising out of a claim made against the Party by a member of the public, a member of the Council, or an employee of the Council alleging a Wrongful Act, or made against the Party because of the Party’s status as a Council member or an employee thereof, provided that, in either situation, the claim relates solely to the performance by the Party of services as a member or employee of the Council in their capacity with the Council. The maximum amount to be paid by the Legal Defence Fund—General is $100,000 for each claim regardless of the number of parties. There is also a separate Legal Defence Fund—Special Compensation Fund for $150,000 for the potential defence of claims related to the Real Estate Compensation Fund Corporation. (c) Education Fund In compliance with Section 43 of the Real Estate Services Act, an Education Fund was set up during 2006 from licensee payments of discipline penalties. When the discipline committee determines that a licensee has committed professional misconduct or conduct unbecoming a licensee, that licensee is required to pay a penalty in an amount of not more than $20,000 in the case of a brokerage or former brokerage, or not more than $10,000 in any other case. Under Section 44 of the Real Estate Services Act, money received by the Council on account of a discipline penalty under Section 43 may be expended by the Council only for the purpose of educating the public and licensees and other participants in the real estate industry in British Columbia about the operation and regulation of the industry and issues related to real estate and real estate services.
8. Commitments and contingency
(a) In fiscal year 2013, the Council renegotiated the lease for their office premises for a five year period ending on September 30, 2019. Base rent due within each of the next five years is estimated as follows: 2017 $263,240 2018 274,811 2019 286,382 2020 72,319 2021 — $896,752
In addition to base rent, the Council is responsible for paying their portion of operating costs. (b) The Council may, from time to time, be subject to claims and legal proceedings brought against it in the normal course of business. Such matters are subject to many uncertainties. Management believes that adequate provisions have been made in the financial statements where required and the ultimate resolution of such contingencies will not have a material adverse effect on the financial position of the Council.
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Real Estate Council of British Columbia | annual report 2016
notes, continued
The Council’s financial instruments measured at fair value have been categorized based upon a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lower priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Level 2 Level 3
Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the investment manager has the ability to access at the measurement date. Inputs other than quoted prices that is observable for the asset or liability either directly or indirectly, including inputs that are not considered active. Inputs that are unobservable. There is little, if any, market activity. Inputs into the determination of fair value require significant management judgment or estimation.
The following fair value hierarchy table presents information about the Council’s financial assets measured at fair value on a recurring basis as at June 30, 2011. Financial instruments measured at fair value as at June 30, 2011
Level 1 Level 2 Level 3 Total $ $ $ $
Bonds Pooled money market funds Marketable securities Cash
— — — 1,348,857
506,073 2,449,799 — —
— — — —
506,073 2,449,799 — 1,348,857
1,348,857
2,955,872
—
4,304,729
4. Short-term Investments
The Council’s short-term investment portfolio is composed as follows: a GIC having a June 30, 2011 estimated fair value of $116,251 (2010: $392,589) with maturity date of December 14, 2011, bearing interest at a rate of 1.8% (2010: between 1.55% and 4.07%); and, mutual funds having a June 30, 2011 estimated fair value of $609,134 (2010: $702,702).
5. Short-term Investments
The Council’s long-term investment portfolio is composed as follows: a government bond having a June 30, 2011, estimated fair value of $306,073 (2010: $303,045) with a maturity date of June 1, 2014, bearing interest at a rate of 3.1% (2010: 3.1%); and, GIC’s having a June 30, 2011, estimated fair value of $1,924,414 (2010: $1,521,470) with maturity dates ranging between February 13, 2012 and March 31, 2016, bearing interest at rates ranging between 3.00% to 4.56% (2010: 3.85% to 4.25%). The Council’s investment philosophy is to invest conservatively with highly rated counterparties to preserve capital while earning a reasonable rate of return.
Real Estate Council of British Columbia |
annual report 2016
35
Schedule of Expenditures Year ended June 30, 2016 Schedule 1
Schedule of Administrative Expenditures 2016 2015 General General Fund Total Fund Total $ $ $ $
Amortization Council members' honoraria Equipment maintenance Insurance Office rent and operating costs, net Postage, mailing and delivery Printing and stationery Professional services Salaries Telephone Travel and accommodation Visa and bank charges
142,014 142,014 186,399 186,399 135,524 135,524 122,744 122,744 43,520 43,520 40,912 40,912 11,247 11,247 12,529 12,529 570,216 570,216 554,611 554,611 76,740 76,740 95,345 95,345 64,505 64,505 60,352 60,352 164,979 164,979 45,804 45,804 2,244,826 2,224,826 1,948,349 1,948,349 14,290 14,290 14,339 14,339 161,439 161,439 169,517 169,517 150,344 150,344 116,633 116,633
3,779,644 3,779,644 3,367,534 3,367,534
Schedule 2
Schedule of Investigation Expenditures 2016 2015 General General Fund Total Fund Total $ $ $ $
Court reporter services Forensic investigations Professional services Salaries Spot audits Travel and hearing (recovery)
2,238 2,238 6,862 6,862 13,824 13,824 190,853 190,853 432,722 432,722 534,998 534,998 1,994,824 1,994,824 1,945,350 1,945,350 34,443 34,443 18,401 18,401 (107,964) (107,964) (89,741) (89,741)
2,370,087
2,370,087
2,606,723 2,606,723
Schedule 3
Schedule of Other Expenditures 2016 2015
General Education General Education Fund Fund Total Fund Fund Total $ $ $ $ $ $
Conferences Dues, subscriptions and publications Electronic communication Post-licensing education/grants Printing Public relations
63,311 54,365 235,784 14,179 42,854 21,250
— — — 205,514 — —
63,311 54,365 235,784 219,693 42,854 21,250
117,425 58,608 205,911 7,295 61,808 9,186
— — — 94,007 — —
117,425 58,608 205,911 101,302 61,808 9,186
431,743
205,514
637,257
460,233
94,007
554,240
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Real Estate Council of British Columbia | annual report 2016
www.recbc.ca