II. General Information
Associate Broker/Representative Responsibilities
In addition to a managing broker or an associate broker, a representative provides real estate services on behalf of a brokerage. When providing real estate services under the supervision of a managing broker, an associate broker’s duties and obligations are the same as a representative’s. For the purposes of this review, the reference to ‘‘representative’’ includes a reference to ‘‘associate broker’’.
RESA and the Rules set out a number of duties that a representative must meet in the course of providing real estate services.
One of the most important obligations of a representative is the manner in which the representative handles funds. RESA requires that all money held or received from or on behalf of a principal in relation to real estate services be paid or delivered to the brokerage. Additionally, any money received on account of remuneration for real estate services must be paid to the brokerage whether or not the remuneration has already been earned. As a result of this provision, even though the funds may have been received after a transaction completes, the funds must still be paid to the brokerage.
RESA also provides that a representative may only provide real estate services on behalf of the brokerage to which the representative is licensed. Additionally, the representative must not accept remuneration in relation to real estate services from any person other than the brokerage in relation to which he or she licensed.
RESA defines ‘‘remuneration’’ as including any form of remuneration, including any commission, fee, gain, or reward, whether the remuneration is received, or is to be received, directly or indirectly.
The broad definition of ‘‘remuneration’’ means that rewards such as referral fees, bonuses, or travel points that are paid in relation to the provision of real estate services must be paid through the brokerage to which the representative is licensed.
The Rules contain a number of obligations and duties that a representative must satisfy, including requirements relating to advertising, signing documents on behalf of clients, home offices, and various disclosures that a representative must make.
In order for representatives to fulfill their responsibilities under RESA, they must ensure that:
- they do not perform any licensed activity unless they are properly licensed at the time;
- their licence is current at all times;
- all real estate services are conducted in the name of the brokerage to which the representative is licensed;
- they have current knowledge of issues that relate to the area of real estate in which they practice. They should participate in opportunities for training/development that are relevant to their specific area of practice;
- they keep the managing broker informed of the activities being performed (section 3-2 of the Rules). They should seek guidance from their managing broker in situations where there is uncertainty about the proper course of action;
- they promptly provide copies of all disclosures as required under sections 9-1, 9-2 or 9-3 of the Rules to the managing broker;
- they immediately notify the managing broker if a deposit which the brokerage is required to hold as stakeholder is not received (section 3-2 of the Rules);
- they advise the managing broker when they intend to be absent from the office for prolonged periods of time, and should ensure that clients and customers are aware of intended absences;
- they promptly respond to any inquiries addressed to them by the managing broker (section 3-2 of the Rules);
- they act honestly and with reasonable care and skill when providing real estate services (section 3-4 of the Rules).
Representatives should also ensure that they:
- carry out the following duties to a client (section 3-3 of the Rules):
- act in the best interests of the client,
- act in accordance with the lawful instructions of the client,
- act only within the scope of the authority given by the client,
- advise the client to seek independent professional advice on matters outside of their expertise,
- maintain the confidentiality of information respecting the client,
- disclose to the client all known material information respecting the real estate services, and the real estate and the trade in real estate to which the services relate,
- communicate all offers to the client in a timely, objective, and unbiased manner,
- use reasonable efforts to discover relevant facts respecting any real estate that the client is considering acquiring,
- take reasonable steps to avoid any conflict of interest; and
- promptly and fully disclose any conflict that does arise to the client;
- make certain that all advertisements, including websites, meet the requirements of RESA and specifically sections 4-6, 4-7, and 4-8 of the Rules, and Council advertising guidelines and policies;
- obtain the written authorization of the client before signing a contract on the client’s behalf (section 5-3 of the Rules);
- make certain that all signed offers to acquire or dispose of real estate are promptly communicated to the relevant party to the trade in real estate unless otherwise directed by a client (section 5-3.1 of the Rules);
- promptly deliver a copy of any signed acceptance of an offer to each of the parties to the trade (section 5-2 of the Rules);
- are familiar and current with communications from their related brokerage, the local real estate board/association, or other trade organizations to which they belong and the Council respecting policy matters or changes in the law;
- attend office meetings as a means of ensuring ongoing competency and familiarity with current issues and market conditions;
- do not induce any party to break an agreement for the purpose of entering into an agreement with another party (section 5-5 of the Rules);
- advise their managing broker of any intention to purchase or dispose of real estate for themselves or an associate and ensure that they have complied with section 5-9 of the Rules. They must ensure a completed ‘‘Disclosure of Interest in Trade’’ Form is provided to the opposite party before an agreement for the acquisition or disposition is made and that a copy is promptly provided to the managing broker;
- disclose, in writing, all remuneration received as a result of providing real estate services to or on behalf of a client and that a copy of the written disclosure is provided to the managing broker (section 5-11 of the Rules);
- disclose any known material latent defect to other parties before any agreement is entered into and that a copy of the written disclosure is provided to the managing broker (section 5-13 of the Rules);
- familiarize themselves with the brokerage’s procedures manual and conduct their business in accordance with the requirements of RESA, the Regulations, and Rules;
- promptly provide their related brokerage with the original or legible true copies of all general records, trading records, rental property management records, or strata management records related to transactions in which the brokerage is involved (section 3-2 of the Rules).
If the licensee has an unlicensed office in his or her home or in commercial space, he or she must ensure that he or she complies with section 4-3 of the Rules which requires:
- a sign is not placed outside indicating that the licensee is doing business there as a real estate representative;
- the telephone in the office is not answered in the name of the related brokerage;
- the home or personal office address in not indicated on any advertising, business cards, letterhead, etc.; and
- all employees and others who perform duties on behalf of the licensee are adequately supervised (section 3-2 of the Rules) and that any secretarial or other unlicensed staff working in the personal office of a licensee does not engage in any activity requiring a real estate licence.
(a) Independent Contractor Status
RESA permits a licensee to be engaged by a brokerage either as an employee or as an independent contractor. RESA provides that licensees are to be licensed to, and engaged by, a single brokerage. The definition of ‘‘engaged ’’ includes a licensee who is employed by the brokerage and a licensee who is acting in an independent contractor relationship with the brokerage to provide real estate services on its behalf.
Whether a licensee is an employee or an independent contractor, the duties and obligations of the licensee do not change. In other words, the obligations of a representative apply to every licensee licensed as a representative or an associate broker regardless of the manner in which they are engaged by the brokerage.
(b) Licensees Must Promptly Provide Records to Their Related Brokerage
[11/20/2012 The following section was added to the Professional Standards Manual]
Section 3-2 of the Rules details general responsibilities of licensees in relation to their brokerages. An important aspect of those responsibilities includes promptly providing the brokerage with the original or copies of records related to the real estate services provided by the licensees. The obligation to provide these records to a brokerage ‘promptly’ means they must be provided without delay.
This enables the brokerage to fulfill its obligation to maintain timely, accurate, and complete records, and enables the managing broker to fulfill his or her obligation to be in active charge of the business of the brokerage. For example, it is not acceptable to provide the brokerage with a copy of a Contract of Purchase and Sale only after subjects have been removed or the deposit is received; once it has been accepted by all parties, it must be provided to the brokerage without delay.
Licensees are generally aware that when they have, on behalf of their brokerage, entered into a listing agreement, they must promptly provide the original or a copy of the listing agreement to their managing broker. However, it has come to the attention of the Council that many licensees may not be aware that this provision also applies to buyer agency agreements. Buyer agency agreements are service agreements that are entered into by buyer-clients and licensees, on behalf of their brokerages. Therefore, licensees must also promptly provide the original or a copy of these agreements to their brokerage.
The records licensees are to provide to their related brokerage include all the records identified in sections 8-4, 8-5, 8-6, and 8-7.1 of the Rules that are in the possession of the licensee and were either
- prepared by or on behalf of the licensee, or
- received from or on behalf of a principal.
While the following list is not complete in terms of records that must be provided to the brokerage, it represents records related to trading services that some licensees have not promptly provided:
- Written disclosure statements (e.g. Disclosure of Remuneration, Disclosure of Interest in Trade, etc.)
- Written service agreements (e.g. listing contracts, buyer agency contracts, etc.) and other records that establish the scope of authority (e.g. fee agreements, etc.)
- Contracts for the acquisition and disposition of real estate (e.g. Contracts of Purchase and Sale, Offers to Lease, Tenancy Agreements, etc.)
- Information necessary to complete the Trade Record Sheet
Licensees who are uncertain about their obligations in this regard should review those sections of the Rules identified above. The current Rules are available at www.recbc.ca.