As a real estate licensee, you have a crucial role to play in ensuring that the public interest is protected in real estate transactions. Whenever you believe that consumers are at risk from another licensee’s actions, you have a duty to promptly report the conduct to your managing broker, who can bring it to the attention of RECBC.
When you have concerns about the conduct of another licensee or an unlicensed brokerage employee, always discuss the matter with your managing broker, who should ensure it is brought to RECBC’s attention. Ignoring potential misconduct when you observe it puts the public, and the reputation of the real estate profession, at risk.
This FAQ is designed to assist you in determining the action you should take in situations where you feel another licensee’s conduct should be reported.
Licensees have a legislated duty to report potential misconduct.
Section 3-2(5) of the Rules states:
Knowledge of improper conduct – An associate broker or representative must promptly notify the managing broker on learning of conduct that the associate broker or representative considers may be conduct referred to in section 3-1 (2) [managing broker responsibilities] of these rules, whether that conduct is
(a) the licensee’s own conduct,
(b) the conduct of an employee of the licensee or of another person who performs duties on the licensee’s behalf, or
(c) the conduct of any other person in relation to which the managing broker has responsibility under section 3-1 (2) of these rules.
Managing brokers must act on information about misconduct provided to them by licensees. Section 3-1(2) of the Rules states:
If the managing broker has knowledge of conduct that the managing broker considers
(a) may constitute professional misconduct, or conduct unbecoming a licensee, on the part of a related licensee, or
(b) may be improper or negligent conduct, in relation to the provision of real estate services, on the part of
(i) a related licensee, or
(ii) an employee of the brokerage or any other person associated with the brokerage,
the managing broker must take reasonable steps to deal with the matter.
If you are aware of a licensee who has misappropriated a client’s money, who is attempting to defraud a client, or is otherwise participating in very serious violations of RESA, you have a duty to report such behaviour immediately. Whenever you have reason to believe that another licensee’s conduct presents a danger to their clients or to the public interest, you should inform your managing broker, who should ensure your concerns are brought to RECBC’s attention. This also applies to potential misconduct by unlicensed employees at brokerages.
Examples of matters that are of immediate concern to RECBC include:
- deceptive dealing
- misappropriation of funds
- unauthorized signing of documents
- secret commissions
It is not only serious licensee misconduct that must be reported. Any conduct that you believe may constitute professional misconduct, conduct unbecoming a licensee, or improper or negligent conduct must be reported to your managing brokers. When licensees who are not following the established standards of professional conduct are checked at an early stage, future loss or harm to clients can be prevented. In some cases, when RECBC investigates what appear to be minor breaches, more serious situations are discovered. That is why it is important to bring any concerns about potential misconduct to the attention of your managing broker and RECBC.
If you are in doubt about whether you should report another licensee’s conduct, read “What should I do if I’m not sure whether another licensee’s actions are misconduct?” below. If needed, ask your managing broker for advice. You and your managing broker may wish to consult RECBC’s Professional Standards Advisor for further guidance about conduct you’ve observed and the requirements for licensees:
Email: [email protected]
STEP 1: Contact your managing broker. Explain the situation, the potential misconduct you’ve become aware of, and clearly outline any risks you believe the conduct may present to consumers.
STEP 2: If the licensee is engaged at your brokerage, the managing broker should speak with them directly. If the individual(s) are engaged at another brokerage, the managing broker should contact the managing broker at the other brokerage to discuss the conduct, the risks presented by the conduct, and the steps that should be taken to resolve the situation.
Consult with an RECBC Professional Standards Advisor if you are worried that a client’s interests might be placed at risk by a reporting delay.
STEP 3: When a managing broker has reason to believe that a licensee has breached the conduct requirements in the legislation and put the public at risk, they must contact RECBC and be prepared to support their report with specifics. Include a description of the conduct, and attach any relevant evidence or documentation, such as:
- Contract of Purchase and Sale and addenda
- Listing information
- Listing agreement or other service agreement
- Relevant correspondence with the licensee
- Agency disclosure forms
- Documents relating to a rental or strata property management transaction/agreement
- Property Disclosure Statement
STEP 4: When RECBC receives the information submitted by the managing broker, we will open an investigation file and assess the evidence to determine if RECBC has jurisdiction in the matter. A compliance officer will contact the licensee and/or the managing broker to discuss the matter and review the evidence submitted.
When another licensee’s actions “feel wrong”, yet you’re not sure whether they constitute misconduct under RESA, ask yourself the following questions:
- Have a consumer’s interests been harmed by the licensee’s actions?
- Does it seem likely that someone’s interests may be harmed in the future by the licensee’s actions?
- Does the licensee stand to benefit as a result of their actions, and this has not been adequately disclosed to the client?
- Does the licensee seem unaware or unwilling to correct their actions?
If the answers to any of these questions is “yes,” you should share your concerns with your managing broker. If the licensee is engaged at the same brokerage, the managing broker should discuss the matter directly with the licensee. If the licensee is engaged at a different brokerage, your managing broker should contact that licensee’s managing broker to try to resolve the situation.
Depending on the severity of the conduct and the risk to the consumer, your managing broker may decide to take the concerns you’ve reported directly to RECBC.
If you and your managing broker have questions about the conduct you’ve observed, contact an RECBC Professional Standards Advisor for a consultation: [email protected] | 1-877-683-9664.