Consumer Protection in Real Estate Transactions
In BC, licensed real estate professionals must:
- give consumers information about commissions and fees
- inform consumers of the duties and responsibilities owed to clients and unrepresented parties
- inform unrepresented consumers of the risks of dealing with a real estate professional who is representing another party to the transaction
- only work for either the buyer or the seller in a real estate transaction.
Frequently Asked Questions about Real Estate Consumer Protection in BC
Real estate professionals must to disclose to consumers, at the outset of their dealings:
- whether they will be able to represent the consumer as a client,
- what their duties and responsibilities are to clients and unrepresented parties, and
- how to file a complaint with the Real Estate Council of BC.
This information helps to ensure that consumers are not confused or misled about whether a real estate professional they are dealing with is going to be representing their interests in the transaction.
The Disclosure of Representation in Trading Services form clearly outlines for consumers the services that a real estate licensee can provide.
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 professional 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 real estate professional you are working with to decide whether you wish to enter a client relationship. The real estate professional is not obliged to provide you with services (such as showing you homes) if you have not yet decided whether you wish to be their client.
In BC, real estate professionals cannot represent two or more clients in the same transaction whose interests are in conflict, except in the rarest of circumstances. For example, a property seller and a prospective buyer for that property. Representing two clients whose interests are in conflict is called dual agency. The practice of dual agency was banned in BC in 2018.
The practice of dual agency raised a number of concerns for consumers, including that:
- a real estate professional may not be able to be completely loyal and impartial to two clients with competing interests
- a real estate professional may not be able to properly advise those clients without improperly disclosing their confidential information to each other
- a real estate professional 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, in 2016 an Independent Advisory Group on real estate regulation in BC recommended that limited dual agency be banned in BC. In 2018 the Superintendent of Real Estate banned limited dual agency, except in very limited circumstances.
Q: I have been working with a real estate professional for six months trying to buy a home. I came across one of his listings, and I am interested in making an offer. I want him to represent me but he says he can’t, because dual agency is no longer allowed. Why can’t I work with him anymore?
Real estate professional are no longer allowed to engage in dual agency, except in very specific circumstances. Your real estate professional cannot represent both you (the buyer) and the seller in the same transaction.
However, you can choose a different real estate professional to represent you going forward. Your real estate professional can suggest names of other real estate professional who may be able to assist you.