When and How to Modify Your Duties to Clients

BCFSA recently updated its Duties to Clients Guidelines. The revised guidelines take a more cautious approach to modifications of your duties to clients and distinguish between modifications before you enter an agency relationship compared to modifications made after you enter such a relationship, particularly to trading services licensees.

The duties you owe your clients are essential for strong agency relationships. As a real estate professional, your legal duties to clients include:

• Loyalty
• Full disclosure

• Avoiding conflicts of interest
• Confidentiality

You should take great care when you are deciding if, when, and how you should modify the duties you have to your clients.

Set clear expectations on your services

Before you establish an agency relationship, have an open conversation with a prospective client about your services and duties. If a client asks for any changes to your services, make sure they understand the implications. Remember: your duties cannot be changed to the point that the agency relationship ceases to exist.

Similarly, situations may arise where a client may want to limit their agency relationship with you, e.g., they may ask you to simply post their real estate listing and make your involvement minimal. In this case, modifying your duties, right from the start, may be necessary to reflect your lower level of service.

You may also need to modify your duties if the client wants to significantly change or expand your role. For example, if the brokerage manages a rental property in a strata corporation, and the strata corporation then wishes the brokerage to also manage the strata, the brokerage should consider the conflict and recognize that either one or both service agreements may need to be modified.

However, after entering an agency relationship, the updated guidelines clarify that BCFSA expects licensees to use modification of duties sparingly and only where it is in the best interest of your client, such as where a modification is required in order to comply with other provisions in the Real Estate Services Rules.  

While it may be tempting to use modification of duties to mitigate a conflict of interest that may arise in the course of an agency relationship, in many cases the modification may not serve your client’s best interests or may compromise your ability to fulfil your fiduciary duties. In such a situation, modifying your duties is not the right solution and it may be more appropriate to release your client and refer them to another licensee.

Learn more at Duties to Clients Guidelines.