In speaking to my Clients and Members of the General Public, I am becoming increasingly aware that they have not heard how the changes to the BC Real Estate Consumer Rules will change. This change was originally due to take place on March 15th, 2018, but the Superintendent of Real Estate has now put this back until June 15th, 2018.
NOTE - AS OF MARCH 26TH, 2018 THE SUPERINTENDENT OF REAL ESTATE IS LISTENING TO FEEDBACK FROM REAL ESTATE AGENTS AND THE GENERAL PUBLIC AND SOME OF THESE RULES ARE LIKELY TO BE AMENDED.
Here is a summary of the changes, so far.
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. Agents will be asking you to sign a new form, provisionally called the Disclosure of Representation in Trading Services form, that clearly the services that a Real Estate licensee can provide.
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?
I want to look at a couple of homes with a licensee. But I am not sure if I want a client relationship or if I want to be an unrepresented buyer.
Do I have to decide right away?
It is up to you and the licensee you are working with to decide whether you wish to enter a client relationship. However, the licensee is not obliged to provide you with trading services (such as showing you homes) if you have not yet decided whether you wish to be the licensee's client.
Limited Dual Agency
The Superintendent of Real Estate has created new Rules that generally prohibit the practice of dual agency, except in the rarest of circumstances.
What is Dual Agency?
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 in British Columbia?
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, an Independent Advisory Group, on Real Estate regulation in BC, recommended that Limited Dual Agency be banned in BC. A Rule has therefore been created restricting limited dual agency (except in very limited circumstances), starting from June 15th, 2018.
Can I make an offer on a property my licensee has listed?
I have been working with a licensee for six months trying to buy a home and came across one of their listings, and I am interested in making an offer.
I want the Licensee to represent me but they say they 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.
What happens if the Agent has been working with me as their Client and I want to write an offer on their listing after June 15th, 2018?
If the Listing Agent has been working with you, the Buyer, as a Client and they have a formal Listing Agreement with the Seller, should the Buyer decide they wish to write and offer the Agent can no longer represent the Buyer or the Seller, as the agent would be deemed to be in a position of preferring their own interests and the interests of the client they are keeping to the interests of the client they are referring to another Agent.
Clearly, these are important changes and there are going to be some 'teething problems', but in the latest scenario, for example, neither the Buyer or the Seller will win, as they both had a relationship with their Agent and now neither of them can be represented.
I wanted to let everyone know about this, as it seems to be going under the radar, and if there are any 'tweaks to these rules to be made it will have to come from Members of the Public lobbying the Provincial Government.
If you have any concerns about these changes, you can either contact your Member of Parliament direct or private message me and I will send them to my Real Estate Board as we are planning to lobby the Government too.
Tel 250 864 1707
Credits -: With thanks to Barbara Bell-Olson Managing Broker Royal Le Page Vancouver.