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BCFSA Freezes Brokerage's Rental Trust Accounts and Suspends Licence
gavel next to a stack of papers

BCFSA Freezes Brokerage's Rental Trust Accounts and Suspends Licence

Rent It Furnished Inc., dba Rent it Furnished Realty, has been unable to produce required financial records over the last year.

Following repeated failures to provide compliant financial records, BCFSA has issued an Urgent Order to freeze the rental trust accounts of Vancouver-based brokerage Rent It Furnished Inc., dba Rent it Furnished Realty (”RIF”) and suspend its licence.

The trust accounts are used for the disbursement of rental payments from tenants to landlord clients of RIF with rental properties predominantly in the Metro Vancouver area.

There are no impacts to tenancy agreements as a result of this Urgent Order. Tenants are protected by the Residential Tenancy Act and are advised to continue paying their rent, according to the terms of their tenancy agreement. If tenants hear from their landlord, landlords should ensure they can prove to the tenant they are the landlord/property owner. Tenants cannot be evicted for non-payment of rent or non-payment of deposit if it was paid to RIF as per the tenancy agreement.

Landlord clients of RIF will not have access to any rental payments deposited into the frozen RIF accounts and are advised to take the necessary steps to update their rental payment arrangement, according to the terms of their tenancy agreement. This could include establishing alternate accounts or seeking out the services of a licensed rental property management brokerage.

The decision to freeze the accounts is one of a series of escalating actions taken by BCFSA due to RIF’s ongoing non-compliance with the terms of its August 22, 2023, Consent Order and its repeated inability to reconcile its rental trust accounts over the last year.

Without complete and accurate reconciliations, trust accounts cannot be assessed to determine if funds are handled correctly in accordance with the Real Estate Services Act (“RESA”). RIF was unable to identify and track specific amounts held in trust for its clients, or how much money its clients were owed.

In the August 22, 2023 Consent Order RIF and its managing broker admitted professional misconduct between February 2017 and September 2020 by:

  • Failing to identify six shortages in the rental trust accounts, totalling $5,773.18;
  • Failing to take immediate steps to rectify the shortages; and
  • Failing to notify BCFSA of the negative balance within 10 days of its occurrence.

RIF was ordered to pay a $17,000 disciplinary penalty and $1,500 in enforcement expenses.

“The decision to freeze the accounts of this brokerage was not taken lightly. The brokerage’s monthly trust accounts were not reconciled in accordance with the August 2023 Consent Order and have remained deficient,” said Jon Vandall, BCFSA’s Vice President, Compliance and Enforcement.

“We acknowledge the serious impact this may have on landlords and tenants. A freeze order is the best mechanism to protect trust funds and address the accounting deficiencies of the brokerage. We must take action to protect the interests of consumers and the integrity of the sector.”

BCFSA may vary the Urgent Order to unfreeze the rental trust accounts if RIF comes into compliance. If it is unable to do so, BCFSA can make an application to the BC Supreme Court to appoint a receiver, who will be responsible for reconciling the frozen accounts and distributing payments to landlords. This process is expected to take some time.

Landlords and tenants with concerns about their obligations under their tenancy agreements, including forms of rent payment, returning security deposits, and adjudicating disputes, can find information on the Residential Tenancy Branch website.

BCFSA’s recent consumer alert provides further guidance. Impacted landlord clients can also contact BCFSA at [email protected].

RIF was also the subject of a Consent Order on April 11, 2016 when it was reprimanded and ordered to pay a $5,000 discipline penalty and enforcement expense of $1,500.

The brokerage was found to have failed to maintain proper books, accounts, and records, and failed to maintain and prepare monthly reconciliation of bank statements for each trust account. It was placed on enhanced supervision conditions as a result of the 2016 Consent Order.

Media Contact:
Kate Bilney
Communications Manager, (778) 357-1634, [email protected]
Visit: www.bcfsa.ca