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Professional Standards Manual

Rental Property Management Services

2. Practice Standards

(d) Benefits in Relation to Rental or Strata Management Services

Section 5-12 of the Rules requires that, if a licensee, who provides rental property management or strata management services, receives or anticipates receiving a benefit as a result of expenditures made by or on behalf of the principal to whom the management services are provided, the nature and extent of the benefit must be disclosed in writing to both the principal and the licensee’s brokerage before the benefit is accepted. A brokerage is a licensee and is subject to the same disclosure requirements as individual licensees. Disclosure is also required if an associate of the licensee is to receive the benefit. 

A rental property manager or strata manager may obtain a benefit by retaining companies in which the licensee or an associate of the licensee has an interest to provide services or carry out work for in relation to the managed property. If, for example, the licensee retained a company owned by their spouse to provide landscaping services, section 5-12 of the Rules would apply and require that the benefit be disclosed to the principal, i.e. rental property owner or strata corporation. In such circumstances, an associate of the licensee is obtaining a benefit as a result of an expenditure made on behalf of the principal. 

Section 5-7 of the Rules defines the meaning of ‘‘associate’’ for both individual licensees and brokerages. Rental property managers and strata managers should pay particular attention to the definition in order to ensure that the required disclosures are made. 

Licensees must also ensure that, if they intend to direct business to any service provider on the understanding that the licensee will receive a benefit for doing so, this is first disclosed to and agreed to by the client on whose behalf the services will be provided.

A sample form entitled ‘‘Disclosure of Benefits’’ has been prepared by the Council for use in situations where a representative, brokerage, or associate will receive a benefit.