The Administrative Penalty Process

Under the Real Estate Services Act (“RESA”), the Superintendent of Real Estate (the “Superintendent”) can issue Administrative Penalties for individuals or business entities when they fail to comply with RESA, the Real Estate Services Regulation (the “Regulation”), or the Real Estate Services Rules (the “Rules”). Administrative penalties are often used to address minor or moderate non-compliance and are used to encourage compliance and to intervene in active non-compliance.

As of July 1, 2024, administrative penalties may be issued to address non-compliance for both licensed, or unlicensed, individuals or entities. This page provides information about administrative penalties and about the procedures that BCFSA has in place to issue administrative penalties.

Notice of Administrative Penalties

Section 57 of RESA requires the Superintendent to provide notice to an individual or entity that an administrative penalty has been issued. This is called the Administrative Penalty Notice (the “AP Notice”). The Superintendent may provide notice of more than one administrative penalty contravention in the same AP Notice. The AP Notice will include:

• The provisions of RESA, the Regulation, or the Rules that have been contravened;
• The amount of the penalty that has been imposed;
• Brief reasons explaining the basis of the contravention and the penalty; and
• Information about the individual’s or entity’s right to be heard in the matter.

How and When an Administrative Penalty Notice is Delivered

The date an AP Notice is deemed to be delivered is the earliest of the following dates:

• The date on which BCFSA personally served the individual or the business entity with the AP Notice (RESA s. 57(3)(a) or (b));
• The date on which BCFSA provided substituted service by a method provided for in a court order (RESA s. 125); or
• Seven days after BCFSA provided the AP Notice to Canada Post for the delivery to a licensee’s mailing address (Rules s. 18 and 19). Note that this method of delivery applies only to licensed persons.

When possible, the individual or entity will also receive a copy of the AP Notice by email, if BCFSA has an email address for the individual or entity. Licensees are required to provide an email address to BCFSA pursuant to section 20 [email address for licensees] of the Rules and Regulatory Statement 23-010.

What Happens Once an AP Notice Has Been Delivered?

When an AP Notice has been delivered, the subject of the AP Notice has 30 days to either:

• Pay the penalty; or
• Submit a written request to BCFSA to request a reconsideration of the administrative penalty using the Administrative Penalty Reconsideration Request Form.

In exceptional circumstances, the Superintendent may consider extending the period for the request for reconsideration. For additional information about the process for disputing an administrative penalty, see the Reconsideration Process section of this page.

If the subject of the administrative penalty does not make a request for reconsideration within 30 days of the delivery of the AP notice, or a longer period allowed by the Superintendent, the subject is deemed to have acknowledged that they contravened the relevant section of RESA, the Regulation, or the Rules and the penalty is due and payable to BCFSA.

Once an administrative penalty has been imposed, the Superintendent cannot start any other proceedings under Part 4 of RESA [Discipline Proceedings and Other Regulatory Enforcement] in respect of the matter. However, if the Superintendent is satisfied that another contravention has occurred, an additional administrative penalty could be imposed, or the Superintendent can initiate a Notice of Hearing. An additional contravention can include repeat non-compliance with respect to the same provision under RESA, the Regulation, or the Rules.

Daily Penalties (Category D and Category E)

Daily penalties can be imposed for contraventions designated in Category D or Category E. Daily penalties are used to encourage prompt action to achieve compliance. This includes promptly responding to requests for information from BCFSA by providing accurate information related to investigations.

Before imposing an administrative penalty for a Category D or Category E contravention, BCFSA will send a Non-Compliance Warning Letter. The Non-Compliance Warning Letter will identify a time period in which the individual or entity must come into compliance in order to avoid the imposition of the daily administrative penalty. If compliance is achieved within the identified time period, the Superintendent may still issue an administrative penalty for the base amount. For more information about the Non-Compliance Warning Letter, see the section below on this page.

For contraventions where a daily penalty amount applies, the contravention will include a base penalty amount and a daily penalty amount for each day or part of a day where non-compliance occurs after the Compliance Warning Period has come to an end. Base penalty amounts and daily penalty amounts are as follows:

Category	Base Penalty Amount	Daily Penalty Amount
Category D	First contravention = $1,000 Subsequent contravention = $2,000	$250/Day
Category E	First contravention = $1,000 Subsequent contravention = $5,000	$1,000/day

Example calculation 1: A subsequent contravention

Brokerage Amazing Real Estate Ltd. has a fiscal year end of August 31, meaning its Section 75 annual filings are due December 31. Amazing Real Estate Ltd. the following enforcement history:

In June 2023, contravention of s. 75 [annual financial statements, accountant’s report, and brokerage activity report] resolved by way of consent order.

Amazing Real Estate makes required filings on March 3, 2025, after being sent the Non-Compliance Warning Letter on January 13, 2025. The filings were made 62 days after the December 31, 2024 due date and 49 days after the Non-Compliance Warning Letter. The Non-Compliance Warning Letter contained a Compliance Warning Period of 5 business days. The Superintendent is satisfied that Amazing Real Estate Ltd. has contravened s. 75 again by failing to file the required documents by December 31, 2024. The Superintendent is satisfied that the issuance of an administrative penalty is appropriate for the circumstances of the matter.

This was Amazing Real Estate Ltd.’s second contravention of section 75 of the Rules within five years.

Base penalty amount for a subsequent contravention: $2,000

Daily penalty amount (Category D):

Compliance Warning Period: January 13 to January 20.

Daily penalties start January 21 and stop March 3, 2025: 41 days

41 days x $250/day = $10,250

Total administrative penalty for Amazing Real Estate Ltd.: $12,250 ($2,000 base amount + $10,250 daily)

Example calculation 2: A non-subsequent contravention

Former representative, Rahul Patel, is no longer licensed for real estate services. Mr. Patel has the following administrative penalty history:

In September 2018, contravention of s. 24 [brokerage notice of business changes]

In July 2021, contravention of s. 18 [mailing address for delivery]

Mr. Patel did not renew his license in May 2022. In May 2024, the Superintendent initiated an investigation into allegations of unlicensed activity by Mr. Patel and requested a statement and information from Mr. Patel. Mr. Patel did not respond. The Superintendent made a repeated requests for a statement and information from Mr. Patel including on July 2, 2024, to which Mr. Patel responds “I’m no longer licensed, I’m no longer required to provide the Superintendent with information. Leave me alone.” The Superintendent is satisfied that Mr. Patel contravened section 37(4) [a person must not withhold, destroy, conceal or refuse to provide information… reasonably required for the purposes of an investigation] of RESA and that the issuance of an administrative penalty is appropriate for the circumstances of the matter. On July 5, 2024, the Superintendent issues a Non-Compliance Warning Letter to Mr. Patel. The Superintendent provided a Compliance Warning Period of 5 business days (due by July 12 to avoid incurring daily penalties). Mr. Patel provides his submission and comes into compliance on July 17, 2024.

Base penalty amount (as a first contravention of s. 37 of RESA): $1,000

Daily penalty amount (Category E): 5 days between end of Compliance Warning Period and Mr. Patel coming into full compliance

5 days x $1,000 / day = $5,000

Total administrative penalty for Rahul Patel: $6,000

Non-Compliance Warning Letters

Before imposing an administrative penalty for Category D or Category E contraventions, BCFSA will deliver a non-compliance warning letter to the subject of the investigation. A Non-Compliance Warning Letter is not an AP Notice.

The purpose of the Non-Compliance Warning Letter is to notify the individual or entity that the Superintendent is satisfied that a contravention of a Category D or Category E Rule has occurred, and to bring the matter to the attention of the individual or entity so that they can take steps to come into compliance.

Category E administrative penalties will be used in circumstances where an individual or entity does not respond to communication or requests for information from BCFSA, or does not demonstrate a willingness to take steps to come into compliance. The Non-Compliance Warning Letter gives notice to the individual or entity that enforcement action can be taken by the Superintendent, and that regulatory action may include imposing an administrative penalty.

Timeliness of compliance and providing evidence to BCFSA of steps to come into compliance may be factors that are considered by the Superintendent in deciding whether to impose an administrative penalty or to take other enforcement action in respect of the contraventions.

After issuing a Non-Compliance Warning Letter, the Superintendent can decide whether:

• The conduct continues to be eligible to be resolved using an administrative penalty (e.g. the individual came into compliance) and to issue an AP in respect of the contravention
• To refer the matter for enforcement action by way of a Notice of Hearing, or
• There is new information that has changed the assessment of the matter, and the matter is more appropriately resolved through a letter of advisement, a dismissal, or the Superintendent granting an extension of the Compliance Warning Period.

The Process for Issuing a Non-Compliance Warning Letter

The Non-Compliance Warning Letter will include:

• The provisions of RESA, the Regulation, or the Rules related to the contravention (identified non-compliance);
• Details of the administrative penalty calculation (the base penalty amount and the applicable daily amount);
• The period that the subject will be granted to come into compliance. Generally, the Compliance Warning Period will be five business days after the delivery of the Non-Compliance Warning Letter; and
• A notification that despite the Non-Compliance Warning Letter, BCFSA may still take enforcement action initiated by a Notice of Hearing. For example, if an individual does not come into compliance during the Non-Compliance Warning Period, or BCFSA becomes aware of other factors related to the misconduct that may be more appropriately resolved through the issuance of a Notice of Hearing.

The Compliance Warning Period begins on the date that the Non-compliance Warning Letter is delivered.

Individuals and entities who receive a Non-Compliance Warning Letter should respond promptly to BCFSA with evidence of compliance, or with information regarding extenuating circumstances prior to the expiry of the Compliance Warning Period.

Requesting an Extension of the Non-Compliance Warning Period

BCFSA may grant an extension of the Compliance Warning Period or cancel the Non-Compliance Warning Letter if the individual or entity provides BCFSA with sufficient information to satisfy BCFSA that there are extenuating circumstances.

If compliance cannot be achieved within the Compliance Warning Period due to extenuating circumstances, a request for an extension of the Compliance Warning Period should be made to BCFSA before the period ends. If an extension is granted, administrative penalties will not be imposed during the extension period. The length of the extension will be determined on a case-by-case basis and will consider the nature of the circumstances.

Granting an extension of the Compliance Warning Period or cancelling the Non-Compliance Warning Letter does not prevent BCFSA from taking action in the future in respect of the matter. If the contravention continued beyond a reasonable timeframe after granting an extension of the Non-Compliance Warning Letter, and the contravention continues to be eligible for an administrative penalty, BCFSA can choose to issue an administrative penalty for the base amount.

Extenuating Circumstances

There may be extenuating circumstances that prevent an individual or entity from complying with regulatory requirements in a timely manner. In these circumstances, BCFSA may consider an alternate resolution, and may forgo issuing an administrative penalty. Individuals or entities who receive a Non-Compliance Warning Letter should notify BCFSA of any extenuating circumstances as soon as possible, and, where applicable, in advance of any deadlines. In circumstances involving deadlines, the individual or entity should contact BCFSA directly with requests for an extension.

Some examples of extenuating circumstances include, but are not limited to:

• Significant disruption to a brokerage’s computer system due to a cyber attack, a fire, or a flood;
• Extraordinary work being undertaken by an external auditor;
• Business disruption caused by industrial action, natural disaster, or state of emergency;
• Significant illness, accident, or injury requiring hospitalization; and
• Absence caused by jury duty.

Examples of situations that are unlikely to be considered as extenuating circumstances include:

• Staff changes or absences;
• Minor computer problems, partial system disruptions, or lack of contingency plans;
• Office closures or statutory holidays;
• Personal or domestic events such as moving or attending a wedding;
• Holidays or travel arrangements;
• Postal delivery delays or strikes; and
• Minor illnesses.

Deadline to Comply with Section 21 Rules

Section 21 of the Rules requires that a licensee must respond promptly to any inquiry addressed to the licensee by the Superintendent. If applicable, where the Superintendent is imposing an administrative penalty regarding information that was to be provided to BCFSA by a licensee (e.g. s. 23 notice of proceedings, s. 24 brokerage notice of business changes) the Superintendent may also specify a date by which the licensee must provide additional information related to the circumstances that led to the contravention or to provide proof of compliance (e.g. s. 36 brokerage signs). The AP Notice may warn a licensee that a failure to provide the requested information, or proof of compliance, by the date specified may in addition lead to the imposition of daily administrative penalties for a contravention of section 21 of the Rules.

Category F Administrative Penalty Calculations

Category F administrative penalty amounts are determined based on a permissible range of penalties, rather than a prescribed amount. This is a flexible approach that allows the Superintendent to consider many factors in determining an appropriate penalty and the unique circumstances of each case. For the first contravention under Category F, the penalty range is between $5,000 to $100,000 (the statutory maximum for an administrative penalty). For a second contravention, the penalty range is between $10,000 and $100,000.

To determine the appropriate penalty amount for a contravention under Category F, the Superintendent may consider a wide range of factors, including, but not limited to:

• The source of the complaint and if the complaint was self-reported;
• Compliance and/or licensing history for the individual or entity;
• Benefit derived from the contravention;
• The risk of harm or material harm for consumers; and
• The time period over which the contravention occurred.

The Process for Disputing an Administrative Penalty

Individuals or entities who are subject to an administrative penalty have the right to request a reconsideration of the penalty under section 57 of RESA. Under section. 2.1 (3) of RESA, the Superintendent can delegate the authority to reconsider an administrative penalty to a Hearing Officer. An individual or entity that wishes to dispute an administrative penalty must submit a Reconsideration Request in writing to BCFSA within 30 days from the date that the penalty was issued. The AP Notice will provide information regarding how a request for reconsideration must be submitted to BCFSA. All requests for reconsideration should be made using the Reconsideration Request Form, and submitted by email to [email protected].

A Reconsideration Request must be received by BCFSA no later than 30 days after the receipt of the AP Notice or a longer period as allowed by the Hearing Officer. The Reconsideration Request must clearly articulate the reason for the dispute and the facts that the Hearing Officer should take into consideration as part of their review of the decision, including any extenuating circumstances that prevented compliance from occurring.

Before the Reconsideration Request is considered, BCFSA may seek clarification on any points raised in the request. Individuals or entities may provide evidence for the Hearing Officer’s consideration.

Standard of Review

Upon receipt of a Reconsideration Request by the deadline, or a longer period of time allowed by the Hearing Officer, the officer will reconsider the administrative penalty decision. A Reconsideration Request should address whether the individual or entity exercised due diligence (i.e. took reasonable steps or precautions) to prevent the contraventions of RESA, the Regulation, or the Rules that are at issue in the AP Notice, information on any extenuating circumstances that prevented compliance, and any other information the individual believes the Hearing Officer should consider. Reconsideration decisions are made on the balance of probabilities.

As per section 57(4) of RESA, the Hearing Officer may:

• cancel the penalty;
• cancel the penalty, to be followed by the Superintendent’s issuance of, a Notice of Hearing; or
• confirm the penalty specified in the AP Notice, in which case the administrative penalty imposed in the AP Notice will immediately become due and payable to BCFSA.

The Hearing Officer considering the Reconsideration Request will not be the same person who issued the AP Notice.

BCFSA will deliver written reasons for the disposition of the Reconsideration Request and, where applicable, the complainant (redacted as appropriate).

Effect of the Reconsideration Process – All Administrative Penalties

Following reconsideration, if an individual or entity seeking reconsideration meets the standard of review, the administrative penalty in respect of that contravention is cancelled. For administrative penalties imposed under Category D (Daily), a decision to cancel the penalty includes the cancellation of the base penalty amount plus any daily amount.

If a decision is made that issuing a Notice of Hearing to initiate an enforcement hearing is more appropriate than imposing the administrative penalty, the administrative penalty will be cancelled, a Notice of Hearing will be issued, and the matter will proceed to a hearing. A penalty imposed at the hearing may not be greater than the administrative penalty originally imposed.

If a decision to impose an administrative penalty is confirmed, the amount of the penalty is immediately due and payable.

*Updated July 2024 to include Category E and Category F – See Advisory for more information.