B.C. Government Shines A Light On Shadow-Flippers With New Regulations

Shadow-flipping has been the subject of intense media attention over the past few months, and there has been increasing pressure on the B.C. government to address the issue. The government responded on May 9, 2016 by unveiling new regulations aimed at combatting the practice. The regulations, issued pursuant to the Real Estate Services Act, come into effect today.

What is shadow-flipping?

Shadow-flipping a property involves the assignment of a purchase contract by a purchaser to a third party for a fee, often on multiple occasions and for increasingly higher fees. There is, of course, nothing wrong with entering into a purchase contract and deciding to assign it for a fee. Assignments are a common feature of the real estate market, particularly when prices are rising.