Real Advice is a weekly e-newsletter helping licensees prepare for regulatory changes.
February 2, 2018
Beginning March 15, 2018, each time a trading services licensee presents an offer to a seller client, they must include a completed disclosure form that informs the client about the remuneration their brokerage will receive.
This new consumer protection rule from the Superintendent of Real Estate is intended to increase transparency for consumers about how licensees get paid. RECBC is developing the new mandatory form that licensees will use for this disclosure. Called the Disclosure to Sellers of Expected Remuneration, it will be made available to licensees in early March, 2018, along with three other new disclosure forms required under the Superintendent’s rules. Learn More here
- What it Does. It explains to your seller the total commission that the listing brokerage would receive if the offer is accepted, and how it will be shared with any cooperating brokerage. It also informs the seller of any other payment you will receive, or expect to receive, as a result of the trade. This information ensures that sellers are fully informed of the expected remuneration that the brokerage(s) will receive if they accept an offer.
- When to Use it. You must make this disclosure each time your seller client receives an offer. That includes all counter-offers coming from a buyer to your seller client. You must present the disclosure at the same time that you present the offer.
- What to Include. You must present the information as a dollar amount.* (updated May 2018)
- How to Handle Multiple Offers. When there are multiple offers going to your seller, you can give the disclosures to your seller after the buyers’ agents have presented the offers IF:
- you present a Disclosure to Seller of Expected Remuneration Form for each offer, and
- if you make all of the disclosures before the seller accepts any of the offers.
If the seller makes a counter-offer to the price of any of the offers, we recommend that you make a new disclosure for transparency and consistency.
- Deliver Copies to Your Brokerage. Your brokerage must keep a copy of each disclosure form. It does not matter if the offer was accepted or not – the disclosure form must be retained at your brokerage. Copies can be in paper or electronic form, but they must be accessible during a Council audit.
- Don’t Forget about the Disclosure of Remuneration. The new Disclosure to Seller of Expected Remuneration Form is in addition to the existing obligation to present a Disclosure of Remuneration form. Learn more about those existing obligations in the Report From Council or Professional Standards Manual.
Answers to Your Questions
Visit RECBC’s website for more guidance about the Disclosure to Sellers of Expected Remuneration. You can also find information and advice about how to comply with the new rules in many common scenarios.
Published on Feb 02, 2018