The Superintendent has made a rule (section 5-18), effective June 15, 2018, that addresses conflicts of interest involving two current clients, where continuing to act for both clients would amount to “dual agency”.
Dual agency is banned in BC, effective June 15, 2018, in all but very rare circumstances.
Dual agency happens when a licensee represents, in a single transaction, two or more parties who have conflicting interests, such as:
- A buyer and a seller
- A buyer and a buyer
- A lessor and a lessee
- An assignor and an assignee.
Conflicts between current clients that would lead to a dual agency situation include:
- Your buyer client asks you to provide advice on purchasing your seller client’s property.
- Two different buyer clients each ask you to help them make offers on the same property.
- Your tenant client asks you to help them lease your landlord client’s property.
If you are faced with conflicts like these after June 15, 2018, where acting for your clients would be dual agency, you have two options:
Option 1: Stop representing both clients.
Option 2: Continue representing one of the clients, and stop representing the other client. This option can only be used if both clients agree to it in writing.
You must use a mandatory form from RECBC for this agreement. Under the Superintendent’s rule, the form, which RECBC will make available before June 15, must include:
- A description of the conflict of interest
- A description of the duties and responsibilities that the client who is being released can no longer expect from you
- A statement that you may have confidential information about the client who is being released, and that you cannot disclose any of that information
- A statement that the advice and information that you may provide to the client you will continue to represent may be limited because you have an ongoing duty to maintain the confidentiality of the information of the client who is being released, and
- A recommendation that both clients seek independent professional advice.
We are pleased to announce that next week we will be launching several key resources to support licensees in complying with the agency and disclosure rules effective June 15, 2018:
- Forms: we will release the four new disclosures required after June 15, plus explanatory guides for their use, and frequently asked questions about the situations in which they will be required.
- Education: in partnership with the UBC Sauder School of Business, Real Estate Division, RECBC has developed Rule Changes: Agency & Disclosure, an online course to increase awareness of the regulatory changes. Details about how and when licensees can register for the course, as well as course cost, length, and other key details, will be announced next week.
- Online Licensee Knowledge Base: to support licensees to learn about the changes to agency and disclosure rules, we’ve developed a “one stop shop” for all your new rules-related information needs. Highly searchable, easy to navigate, and filled with resources in a variety of formats, we hope the Licensee Knowledge Base will become your go-to resource for regulatory information. Stay tuned for next week’s launch.
Published on May 11, 2018