Teams are considered to be collectively the designated agent of a client, because team members typically share confidential information about clients.
Team members cannot act as a designated agent for the seller and as a designated agent for the buyer in the same transaction. That would be dual agency, which is banned in BC except in limited circumstances. A team also cannot act for two separate buyers who each make an offer on the same property.
If a team is representing a seller, and an unrepresented buyer (a non-client) wants to make an offer on the property, the team can deal with the buyer as a non-client, provided the team first makes the Disclosure of Representation in Trading Services and the Disclosure of Risks to Unrepresented Parties.
Before dealing with a non-client, a real estate professional must:
- encourage the non-client to seek independent representation from another real estate professional; and
- consider the substantial risks of working with non-clients.
In most cases, the members of a team are considered to be collectively the designated agent of a client.
Accordingly, anything that an individual designated agent is required to do under the Rules, a team (acting collectively as a designated agent) is required to do as well.
My team members and I are the designated agents for the seller of a property. An unrepresented buyer wants to make an offer on our seller client’s property. Can my team deal with the unrepresented buyer?
With appropriate disclosures, the Team can deal with an unrepresented buyer (a non-client). However, the Team should:
- Encourage the non-client to seek independent representation from another real estate professional; and
- Consider the risks of working with non-clients.
Working with non-clients exposes licensees to risk:
- If the real estate professional is not careful, they may slip into an implied agency relationship with the non-client. Then the real estate professional will be in an undisclosed dual agency situation, and dual agency is prohibited.
- Even if the real estate professional deals with the non-client in an appropriate and professional manner, if the non-client subsequently claims that the real estate professional gave them advice, or induced them to remain unrepresented, it will be a “he said, she said” scenario.
Any time a real estate professional deals with a non-client, the real estate professional should be very cautious and document in writing all discussions with the non-client.
My team members and I are the designated agents for a seller. An unrepresented buyer asks if I can be his designated agent and represent him in making an offer on my team’s seller client’s property. Can I stop acting as a designated agent for the team’s seller client, and begin acting for the buyer as his sole designated agent?
No. You should encourage the buyer to seek independent representation.
You cannot end your agency relationship with the seller and begin acting for the buyer as his designated agent, even with the consent of the seller and buyer, because:
- In ending your agency relationship with the seller, you would be preferring your own interests and the interests of the buyer to the interests of the seller; and
- You would likely have received confidential information from the seller that would be directly relevant to the buyer’s position in the ongoing transaction. Thus, your ability to advise and represent the buyer would be impaired by your inability to disclose the seller’s material confidential information.
The duties of real estate professionals who are members of a team are the same as any other designated agent. As a result, anything that an individual designated agent is required to do under the Rules, a team is required to do as well.
A team cannot engage in dual agency to represent both a buyer and a seller, or multiple competing buyers, because in most cases, the members of a team are considered to be collectively the designated agent of a client.
Members of these teams typically share information about all of the consumers to whom they provide real estate services. That is the essence of the team concept in BC.
As a result, these teams are not able to separate their agency relationships, regardless of whether they operate under brokerage agency or under designated agency.
Published on May 04, 2018