April 20, 2018
Throughout April, we’re offering tips and guidance on how to prepare for the introduction of consumer protection rules from the Superintendent of Real Estate on June 15, 2018. Those rules will protect consumers by:
- prohibiting limited dual agency in almost all cases, and
- requiring new disclosures about commissions, services to expect from a licensee, and the risks of being an unrepresented party in a real estate transaction.
Staying up-to-date about changes in laws, regulations, and policies that affect your practice is a key part of your responsibilities as a real estate professional. Luckily, understanding the impacts of the rules changes ahead just got easier, thanks to Rule Changes: Agency and Disclosure, a course the Real Estate Council is developing in collaboration with the UBC Sauder Real Estate Division.
You can learn about Rule Changes: Agency and Disclosure and other educational initiatives by listening to RECBC’s latest Real Talk, Real Advice podcast — will open in a new tabwith guest Devin Kanhai, Associate Director at the UBC Sauder Real Estate Division. Tune in at your convenience on iTunes — will open in a new tab and SoundCloud — will open in a new tab.
No time to listen? Get the highlights of the conversation with Devin in this brief Q&A — will open in a new tab posted to RECBC’s website.
Rule Changes: Agency and Disclosure will be launched this spring, ahead of the June 15 effective date of the Superintendent’s Rules. Look for more details about the course in upcoming issues of Real Advice.
Since the launch of the Real Advice e-newsletter, licensees have been sharing their questions about the Superintendent’s rules with us. We have analyzed those questions to determine the top issues, and over the next several weeks, we’ll answer one of the most-frequently received questions in each issue of Real Advice.
This week’s question: Referral Fees
After June 15, if I am acting for a seller and an unrepresented buyer wants to make an offer, can I receive a referral fee for referring the buyer to another licensee? Or would that put me in a conflict of interest?
After the Superintendent’s rules come into effect on June 15, 2018 you are still able to receive a referral fee, as long as it is:
- paid through your brokerage, and
- properly disclosed to your client.
At the outset of your relationship with the seller, discuss how you will deal with potential unrepresented buyers. Explain that if you refer unrepresented buyers to another licensee, you may receive a referral fee from that licensee.
That way, if the situation arises, you can say “remember when we talked about unrepresented buyers and referrals? I have been approached by an unrepresented buyer and I am going to refer the buyer to a licensee who has offered to pay me a referral fee.” By discussing the situation in advance, you’ll help to prevent misunderstandings later on.
- the source (who is paying the referral fee);
- the amount, or if the amount is unknown, the likely amount or method of calculation of the amount; and
- any other relevant facts related to the referral fee.
After June 15, you must also disclose the referral fee each time you present an offer to your seller. This ensures transparency, so the seller is fully informed about the remuneration you will receive based on each offer. A new mandatory form for this disclosure, called the Disclosure to Sellers of Expected Remuneration, will be made available before the Superintendent’s rule comes into effect on June 15, 2018.
*information updated 04/26/18
Published on Apr 20, 2018