Real Advice E-News Issue 4 (January 5, 2018)

Real Advice is a weekly e-newsletter helping licensees prepare for regulatory changes.

January 5, 2018

Unrepresented Parties 101

The rules for real estate licensees from the Superintendent of Real Estate that come into effect on March 15, 2018 include a new term: “unrepresented parties.”

Currently, a real estate consumer who is not represented by a licensee is referred to as a “customer.” But many people who are unfamiliar with real estate terms may not understand the difference between a “client” (someone who is represented by a real estate licensee) and a “customer.” Changing the term to “unrepresented party” will help to clear up the confusion about the differences between clients and customers.

Disclosures to Unrepresented Parties Will Be Required

To help ensure consumers can make informed decisions about whether to be represented by a licensee in a real estate transaction, the rules from the Superintendent of Real Estate will require licensees to make a new disclosure about unrepresented parties.

Starting on March 15, 2018, before you can treat a consumer as an unrepresented party in a real estate transaction, you will need to:

• Inform the consumer of the risks of being unrepresented in a real estate transaction;
• Disclose the limits to the services a licensee can provide to an unrepresented party; and,
• Advise the consumer to seek independent professional advice.

You will need to use a mandatory Council-approved form for this disclosure. RECBC is currently developing the form, and we will make it available before the new rules come into effect. Learn more about new disclosure forms.

Best Practices for Dealing with Unrepresented Parties

Some licensees have asked us if it will be acceptable to deal with former clients and/or buyers as unrepresented parties after the ban on dual agency takes effect on June 15, 2018. Before providing services to unrepresented parties, you must make sure that consumers understand the risks they face, and you should carefully consider the risks to you as a professional. Learn more about the risks and best practices for dealing with unrepresented parties in this short video.

Answers to Your Questions

Check out RECBC’s website for information and advice about how to comply with the new rules in many common scenarios. The FAQ page includes answers to questions such as:

• Will “double-ending” a deal (i.e. a listing brokerage earning 100% of the commission if the buyer is unrepresented) still be permitted after June 15, 2018, if all appropriate disclosures are made?
• If I am the designated agent of a seller after June 15, 2018, and I distribute an information sheet with basic facts about the home to potential buyers at an open house, will I need to make the disclosures to each unrepresented consumer who receives the info sheet?
• If I am the designated agent for a seller after June 15, 2018 and I receive a phone call from a potential buyer who is unrepresented, at what point should I make the required disclosures?
• If I deal with a buyer as an “unrepresented party” and the buyer later decides they want to become my client, will I need to make a further disclosure, since the nature of my relationship with the consumer is changing?

Find answers to these questions and more in the Disclosure of representation and disclosure of risks to unrepresented parties sections of the New Rules FAQ on our website.

Do you have a question that isn’t covered in our online FAQ? Send it to us using our online form. In future issues of the Real Advice enewsletter we’ll post answers to your top questions.

New Rules Reminders

New rules from the Superintendent of Real Estate that take effect on June 15, 2018 will require all BC real estate licensees to:

• No longer provide dual agency (except in very rare circumstances);
• Use a new mandatory Council form to disclose expected remuneration (i.e. payment) to clients;
• Use a new mandatory Council form to explain to consumers the difference between being an unrepresented party and being represented by a real estate licensee as a client; and
• Use a new mandatory form to inform consumers of the risks of being an unrepresented party in a real estate transaction.

To learn more about the new rules and how to comply with them, visit RECBC’s website and be sure to check your inbox each week for new information and resources in the Real Advice e-newsletter.

Published on Jan 05, 2018