|If you are licensed for…||When to provide the form …|
|Trading services and/or Rental property management services (applies to trading services in relation to rental property management only)||Make this disclosure before representing two clients with competing interests in the same transaction, if all of the following requirements are met:|
1. The property is in a remote location.
2. That location is under-served by real estate professionals.
3. It would be impracticable (i.e. not possible) for the parties to have different real estate professionals in this transaction.
|Strata management services||You do not need to make this disclosure|
This guide is intended to help you understand how to use the Disclosure of Risks Associated with Dual Agency.
The Disclosure of Risks Associated with Dual Agency form is a mandatory Council-approved form and may not be modified or altered.
Under the Superintendent’s agency and disclosure rules, real estate professionals (licensees) in BC are banned from engaging in dual agency, including:
- representing both the buyer and the seller in a single transaction;
- representing two separate buyers who each hope to purchase the same property; or
- representing both the potential tenant and the landlord of the same property.
Despite the ban on dual agency, there is a narrow exemption for licensees to practice dual agency if all three of the following requirements are met:
- the real estate is in a remote location;
- the location of the real estate is under-served by licensees; and
- it is impracticable for the parties to be provided trading services by different licensees.
In the very rare circumstance where a trade does fall within the exemption, you must use the Disclosure of Risks Associated with Dual Agency form. The form must be given to the consumers before providing them with any trading services within the dual agency relationship.
A separate form must be presented to each consumer you wish to represent in a dual agency relationship.
This disclosure does not replace the Dual Agency Agreement, which is also required before providing trading services within the dual agency relationship.
The Disclosure of Risks Associated with Dual Agency form contains three key sections.
Section 1: An information piece for consumers called “Understand the Risks of Dual Agency”.
The purpose of this section is to inform consumers about the risks associated with dual agency, including:
- how dual agency benefits real estate professionals;
- how dual agency limits a real estate professional’s ability to give their clients advice; and
- how dual agency prevents real estate professionals from exclusively acting in their best interests.
It also offers the consumer options other than entering into a dual agency relationship.
Section 2: Checklists and signature sections that must be completed by the real estate professional but are optional for the consumer.
The purpose of this section is to document that the disclosure has been made to the consumer.
Section 3: An explanation from the managing broker that must be completed before it is presented to the consumer.
The managing broker must attach an explanation of how each of the three necessary criteria for providing dual agency is met. The managing broker must also sign the form.
Agency: a type of relationship where the agent has the authority to represent and act for the consumer in dealing with others.
Client: the principal who has engaged the licensee to provide real estate services to or on behalf of the principal.
Confidential information: any information about a client that is not available to the public. That can include the client’s finances, personal situation, motivations or needs.
Dual agency: the representation, in respect of a trade in real estate, by the brokerage of the following:
- both the seller and the buyer as clients;
- both the lessor and the lessee as clients;
- both the assignor and the assignee as clients;
- 2 or more buyers, lessees or assignees, as the case may be, as clients who have conflicting interests in respect of the trade in real estate.
Impracticable: impossible to do or carry out.
Unrepresented party: a party to the trade in real estate who is not a client of a licensee for the trade in real estate.
NOTE: the terms “remote” and “underserved” are not defined in the Rules. Council’s position is that these terms should be interpreted narrowly and strictly, in keeping with the Superintendent’s goal of imposing broad restrictions on dual agency.
Step 1: The managing broker must complete their portion of the form.
The managing broker must complete a checklist, attach an explanation of how each of the necessary criteria for providing dual agency is met, and sign the form.
Step 2: Discuss the Form with the Consumer
Take time to review the first two pages of the form with the consumer and discuss any questions or concerns the consumer may have. Explain any unfamiliar terms using the definitions included in this guide.
You may want to use the checklists to guide your conversations with consumers when you are presenting them with this form.
Step 3: Complete the Mandatory Real Estate Professional Confirmation
The form contains a mandatory checklist that licensees must complete, plus a mandatory signature section.
Step 4: Invite the Consumer to Complete the Optional Consumer Confirmation
It is optional for consumers to complete the checklist or sign their name. If a consumer chooses not to complete and sign the disclosure, you can make a note at the bottom of the Mandatory Real Estate Professional Confirmation to document that you presented the consumer with the form .
Step 5: Submit the form (or a copy of the form) to your brokerage promptly
Step 6: The brokerage must provide a copy of this disclosure to the Real Estate Council.
A copy of this disclosure must be sent to RECBC promptly after entering into a written agreement of dual agency to [email protected] — will open in a new tab. Remember that promptly means without delay.
NOTE: a copy of a disclosure for each consumer you are representing in a dual agency relationship must be sent to Council.
Step 7: Your clients must sign a Dual Agency Agreement.
After getting the disclosure signed, licensees must have clients sign the agreement. The agreement does not need to be sent to Council. The agreement is not in a form prescribed by council
Published on May 14, 2018