Summary of New BC Rules In Real Estate Transactions
New Consumer Protection Rules: Information for Consumers
Good News Came in Town
New Rules in Agency Relationship:
The Superintendent of Real Estate has announced new rules for real estate licensees that will change the way a real estate professional can provide service to consumers.
Under the new rules, real estate licensees will be required to:
- give consumers more information about commissions and fees — in particular, how the commission is to be dividedbetween a listing brokerage and cooperating brokerage, or when there is no cooperating brokerage, retained by the listing brokerage;
- before working with consumers, inform them of the duties and responsibilities owed to clients and unrepresented parties;
- inform unrepresented consumers of the risks of dealing with a licensee who is representing another party to the transaction;
- only work for either the buyer or the seller in a single real estate transaction. Under the new Rules, dual agency, the practice of acting on behalf of both the buyer and seller on the same trade, will be prohibited except in extremely limited circumstances.
The new rules will come into effect on June 15, 2018.
The Council has developed answers to a number of questions that real estate consumers may have about these new Rules.
Frequently Asked Questions about BC’s new Real Estate Consumer Protection Rules
Disclosure of representation
The Superintendent of Real Estate has created a new rule that requires a licensee to disclose to a consumer, at the outset of their dealings:
- whether the licensee will be able to represent the consumer as a client,
- what the duties and responsibilities of licensees are to clients and unrepresented parties, and
- how to file a complaint about a licensee’s conduct.
This new disclosure requirement is intended to ensure that consumers are not confused or misled about whether a licensee they are dealing with is going to be representing their interests in the transaction.
Can I still represent myself in a real estate transaction?
Yes. You may choose to be unrepresented rather than working with a licensee.
Before making that decision, you should consider the risks of remaining unrepresented, and the potential benefits of having a real estate licensee represent your interests in a trade in real estate.
When do I need to decide whether to be represented or not?
The Superintendent of Real Estate has created new Rules that generally prohibit the practice of dual agency, except in the rarest of circumstances. Dual agency refers to when a licensee represents, in a single transaction, two or more clients whose interests are in conflict. For example, a property seller and a prospective buyer for that property.
Why has dual agency been restricted?
- The practice of limited dual agency raised a number of concerns for consumers, including that: a licensee may not be able to be completely loyal and impartial to two clients with competing interests
- a licensee may not be able to properly advise those clients without improperly disclosing their confidential information to each other
- a licensee acting as a dual agent might prioritize his or her own interest in earning the whole commission, rather than acting in the best interest of his or her clients.
For these reasons, anIndependent Advisory Group on real estate regulation in BC recommended that limited dual agency be banned in BC. Now, the Superintendent of Real Estate has created a Rule restricting limited dual agency (except in very limited circumstances).
Can I make an offer on a property my licensee has listed?
Q: I have been working with a licensee for six months trying to buy a home. I came across one of my licensee’s listings, and I am interested in making an offer. I want him to represent me but he says he can’t, because limited dual agency is no longer allowed. Why can’t I work with my licensee anymore?
Licensees are no longer allowed to engage in limited dual agency, except in rare circumstances. Your licensee cannot represent both you (the buyer) and the seller in the same transaction.
Because of the prohibition on limited dual agency, the licensee you have been working with cannot continue to act for you. However, you can choose a different licensee to represent you going forward. Your licensee can suggest names of other licensees who may be able to assist you.
For more info please follow the website www.RECBC.ca (Real Estate Council of BC)