The Meaning of Agency in Real Estate
In Canada, licensed real estate agents are members of their local real estate Board, their provincial Association, and The Canadian Real Estate Association. This system of membership ensures that you are always treated with honesty and integrity.
Real estate agents must adhere to an extensive code of ethics of the Canadian Real Estate Association. They must continuously attend training on the latest legal issues, market trends and technology affecting their industry.
Real Estate Agency System in British Columbia
In British Columbia, it is required that you sign the Working With A Realtor document as it defines exactly what the relationship is between the brokerage and/or agent and the parties they represent. It also shows that the agent has your best interest at heart.
What is Designated Agency?
When a REALTOR® or REALTORS® work solely on your behalf in real estate transactions, the REALTOR® and brokerage are bound by ethics and the law to be honest and thorough in representing you. The brokerage must account for all money and property placed in its hands while acting for you.
The REALTOR® must:
- Provide undivided loyalty to you (Client) by protecting your negotiating position at all times, and disclose to you all known facts which may affect or influence your decisions;
- Obey all lawful instructions which you give the REALTOR® to act on your behalf;
- Maintain the confidentiality of your information (financial, legal, personal, etc.)
- Use reasonable care and skill in performing all assigned duties in the role as agent.
What is Limited Dual Agency?
Limited Dual Agency occurs when the Designated Agent represents both the buyer/tenant and seller/landlord in the same transaction or two buyers competing for the same property. In this arrangement, the REALTOR® cannot be concerned exclusively with your interests in the transaction, since they are acting on behalf of the other party as well. Both the seller and the buyer or the competing buyers should fully consent to a limited dual agency arrangement in writing.
A REALTOR® who has consent to work as a limited dual agent must adhere to the following restrictions:
A. Deal with both parties impartially;
B. Have a duty of disclosure to both clients, except that:
- REALTOR® must not disclose that the buyer/tenant is willing to pay a price or agree to terms other than those contained in the offer, nor disclose that the seller/landlord is willing to accept a price or terms other than those contained in the listing;
- in the case of competing buyers, the REALTOR® must not disclose the amount or terms of any offer to purchase or lease made or contemplated by either buyer/tenant;
- REALTOR® must not disclose the motivation of one Client to the other Client, unless one of the Clients has authorized such disclosure themselves;
- REALTOR® must not disclose buyer/tenant’s or seller/ landlord’s personal information to the other Client, unless authorized in writing. (This refers to information not otherwise disclosed in the transaction documents.)
C. Must disclose to the buyer/tenant any defects about the physical condition of the property that are known to the REALTOR®.
No Agency Relationship
This occurs when the services of a realtor are used without having an agency relationship. An example would be if you were being shown a property by the seller’s agent.
This realtor still has a legal and ethical duty to provide accurate and honest answers to all your questions. A realtor, however, who is not your agent can’t recommend or suggest a price, negotiate, disclose his client's top or bottom price or any confidential information, unless authorized.
Contact Kevin O'Toole on 604-340-1267 or email firstname.lastname@example.org if you have any questions or if you are considering selling your property and would like representation to look out for your best interests.