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Brokerage Standards Manual

V. General Brokerage Procedures

Service Agreements

(a) Requirements For Written Service Agreements

Unless waived by a prospective client, section 5-1 of the Rules requires that a brokerage must have a written service agreement if the brokerage provides:

  • trading services to an owner of real estate in relation to offering the real estate for sale or disposition
  • rental property management services to an owner of rental property
  • strata management services to a strata corporation.

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(b) General Requirements For Service Agreements

Section 5-1(4) of the Rules requires that the service agreement include the following:

  • the name of the client and the licensee name of the brokerage;
  • the address of the real estate in relation to which services are provided under the agreement;
  • the date on which the agreement is effective;
  • in the case of a service agreement for trading services, the date on which the agreement expires and, in any other case, the duration of the agreement;
  • a general description of services to be provided by the brokerage;
  • the remuneration to be paid under the agreement and the circumstances in which it will be payable; and
  • a provision respecting the use and disclosure of personal information.

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(c) Additional Requirements For Rental Property Management Agreements

In the case of rental property management agreements, section 5-1(5) of the Rules requires that in addition to the foregoing items, the written service agreement must include the following:

  • the circumstances in which the agreement may be terminated by either or both of the client and the brokerage;
  • the scope of the authority of the brokerage or a related licensee when acting on behalf of the owner, including any authority to:
  • sign cheques or make disbursements on behalf of the owner, and
  • enter into contracts on behalf of the owner;
  • the timing, frequency and nature of account statements and other records to be provided by the brokerage to the owner;
  • how security deposits, pet damage deposits and other deposits are to be dealt with; and
  • a description of the records to be kept by the brokerage on behalf of the owner.

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(d) Additional Requirements For Strata Management Services Agreements

For those brokerages providing strata management services, section 5-1(5.1) of the Rules sets out the following additional items that must be included in the service agreement:

  • an indication of whether the brokerage will be holding one or more of:
  • contingency reserve fund money;
  • operating fund money;
  • special levy money; and
  • other amounts
  • on behalf of the strata corporation;
  • the circumstances, in addition to those set out in sections 24(1) and 39 of the Strata Property Act, in which the agreement may be terminated by either or both of the client and the brokerage;
  • any authority under section 30(1)(g) of RESA for the brokerage to transfer amounts:
  • between brokerage trust accounts maintained under section 7-9(2) of the Rules for the strata corporation, or
  • from such a brokerage trust account under section 7-9(2)(a) of the Rules to a pooled trust account for one or more strata corporations;
  • the scope of the authority of the brokerage or a related licensee when acting on behalf of the strata corporation, including any authority to:
  • sign cheques or make disbursements on behalf of the strata corporation;
  • enter into contracts on behalf of the strata corporation; and
  • invest money held by the brokerage on behalf of the strata corporation;
  • the timing, frequency and nature of accounting statements and other records to be provided by the brokerage to the strata corporation, in addition to those required to be provided under section 7-9(7) of the Rules;
  • a description of the records that are to be kept by the brokerage on behalf of the strata corporation, including an indication of which, if any, of the records required under section 35 of the Strata Property Act that the brokerage will retain on behalf of the strata corporation; and
  • a provision respecting the use and disclosure of information respecting the strata corporation, including the use and disclosure of personal information respecting owners who are the members of the strata corporation.

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(e) Amendments To Service Agreements

The Rules require that any amendment to the terms of a service agreement must be in writing and signed by the client and an authorized signatory of the brokerage.

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(f) Authorized Signatory Of A Brokerage

Section 5-1(7) of the Rules provides that an authorized signatory of the brokerage is:

  • a related licensee of the brokerage;
  • in the case of a brokerage that is a sole proprietorship, the sole proprietor; or
  • in the case of a brokerage that is a corporation or partnership, a director, officer or partner of the brokerage.

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(g) Delivery Of Written Agreements To Clients

Section 5-2 of the Rules requires that a brokerage provide a copy of any written service agreement to the client immediately upon execution.

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