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New Consumer Protection Rules:  Information for Consumers

 

The Superintendent of Real Estate has announced new rules for real estate licensees that will change the way a real estate professional can provide service to consumers. Under the new rules, real estate licensees will be required to:

  • give consumers more information about commissions and fees —  in particular, how the commission is to be divided between a listing brokerage and cooperating brokerage, or when there is no cooperating brokerage, retained by the listing brokerage;
  • before working with consumers, inform them of the duties and responsibilities owed to clients and unrepresented parties;  
  • warn unrepresented consumers of the risks of dealing with a licensee who is representing another party to the transaction;
  • only work for either the buyer or the seller in a single real estate transaction. Under the new Rules, dual agency, the practice of acting on behalf of both the buyer and seller on the same trade, will be prohibited except in extremely limited circumstances.

The new rules will come into effect on March 15, 2018.

The Council has developed answers to a number of questions that real estate consumers may have about these new Rules.

If  you have questions that aren’t addressed in the Frequently Asked Questions below, let us know by submitting your question using our online form — we will post responses to the questions we receive on this FAQ in the weeks ahead. 

 

For more information:

 

 


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Frequently Asked Questions about BC’s new Real Estate Consumer Protection Rules

 

Disclosure of representation 

The Superintendent of Real Estate has created a new rule that requires a licensee to disclose to a consumer, at the outset of their dealings:

  • whether the licensee will be able to represent the consumer as a client,
  • what the duties and responsibilities of licensees are to clients and unrepresented parties, and
  • how to file a complaint about a licensee’s conduct.

This new disclosure requirement is intended to ensure that consumers are not confused or misled about whether a licensee they are dealing with is going to be representing their interests in the transaction.

The Council is developing a new form, provisionally called the Disclosure of Representation in Trading Services form, that clearly outlines for consumers the services that a real estate licensee can provide. This form, along with other information for consumers, will be made available before the new Rules take effect on March 15, 2018.

 

Show/Hide AnswerCan I still represent myself in a real estate transaction?

Yes. You may choose to be unrepresented rather than working with a licensee.

Before making that decision, you should consider the risks of remaining unrepresented, and the potential benefits of having a real estate licensee represent your interests in a trade in real estate.

 

Q: I want to look at a couple of homes with a licensee. But I am not sure if I want a client relationship or if I want to be an unrepresented buyer. Do I have to decide right away?

It is up to you and the licensee you are working with to decide whether you wish to enter a client relationship. However, the licensee is not obliged to provide you with trading services (such as showing you homes) if you have not yet decided whether you wish to be the licensee’s client.

 

 

Dual Agency

The Superintendent of Real Estate has created new Rules that generally prohibit the practice of dual agency, except in the rarest of circumstances. Dual agency refers to when a licensee represents, in a single transaction, two or more clients whose interests are in conflict. For example, a property seller and a prospective buyer for that property.

 

 

Show/Hide AnswerWhy has dual agency been restricted?

 

The practice of limited dual agency raised a number of concerns for consumers, including that:

  •  a licensee may not be able to be completely loyal and impartial to two clients with competing interests
  • a licensee may not be able to properly advise those clients without improperly disclosing their confidential information to each other
  • a licensee acting as a dual agent might prioritize his or her own interest in earning the whole commission, rather than acting in the best interest of his or her clients.

For these reasons, an Independent Advisory Group on real estate regulation in BC recommended that limited dual agency be banned in BC.  Now, the Superintendent of Real Estate has created a Rule restricting limited dual agency (except in very limited circumstances).

 

Show/Hide AnswerCan I make an offer on a property my licensee has listed?

 

Q: I have been working with a licensee for six months trying to buy a home. I came across one of my licensee’s listings, and I am interested in making an offer. I want him to represent me but he says he can’t, because limited dual agency is no longer allowed. Why can’t I work with my licensee anymore?

 

Licensees are no longer allowed to engage in limited dual agency, except in rare circumstances. Your licensee cannot represent both you (the buyer) and the seller in the same transaction.

Because of the prohibition on limited dual agency, the licensee you have been working with cannot continue to act for you. However, you can choose a different licensee to represent you going forward. Your licensee can suggest names of other licensees who may be able to assist you.