Information on licensee duties by licence category

Introduction

Licensees providing mortgage services have specific duties that are set out in the Mortgage Services Act (“MSA”), Mortgage Services Regulation (“Regulation”), and Mortgage Services Rules (“Rules”). This information outlines Mortgage Services licensees’ duties required under each licence category. For information on overarching licensee duties and duties by level of licence, see the Mortgage Services Knowledge Base for Information on Mortgage Services Licensee Duties. 

Understanding duties by licence category

There are also duties specific to each licence category (i.e., dealing in mortgages, trading in mortgages, administering mortgages, and mortgage lending). The information below outlines the duties that apply to each licence category.

Duties that apply to multiple categories of licence

Several duties set out in the regulatory framework apply to more than one category of licence. Below is an overview of these duties.

Must represent a client when dealing, trading, or administering

A licensee may only provide the mortgage services of dealing, trading, or administering in mortgages if they are representing a client in that specific mortgage or mortgage transaction. This means that the licensee cannot act on behalf of another person unless they have a client relationship with that person.

Disclosure of representation when dealing or trading

Before offering mortgage services of dealing or trading, a licensee must disclose to the person(s) or entity who is involved in the mortgage or mortgage transaction if they will be represented as a client. This information disclosure must be provided in either a Disclosure of Representation to Borrower (Dealing), Disclosure of Representation to Lender (Dealing), or Disclosure of Representation to Lender (Trading) form, depending on the type of transaction.

If a licensee is only responding to general questions with factual information and does not request or receive details about the party’s motivations, financial qualifications, or mortgage needs, the disclosures noted above are not required.

Where a party is unrepresented, there are additional disclosure requirements. Before providing mortgage services to someone who is not a client and is not represented by another licensee, a licensee must provide either a Disclosure of Risks to Unrepresented Borrower (Dealing), Disclosure of Risks to Unrepresented Lender (Dealing), or Disclosure of Risks to Unrepresented Lender (Trading) form, depending on the type of transaction. More information on representation disclosures can be found on BCFSA’s Mortgage Services Knowledge Base.

Information statement to lender

In certain mortgage transactions, a licensed dealer or trader must provide an information statement to a lender. This requirement applies where a licensee does any of the following in respect of a mortgage transaction:

• arranges a mortgage in which another person is to be the mortgagee;

• arranges the sale of a mortgagee’s interest in a mortgage from one person to another; or

• sells the licensee’s own interest as mortgagee under a mortgage to another person.

The information statement must be provided before the lender’s funds are released or advanced. If the mortgage funds are paid into trust, the information statement must be given on or before the release of the funds from trust, at the lender’s direction. If the mortgage funds are not paid into trust, the information statement must be provided on or before the lender advances the funds.

The information statement must be prepared in a form approved by BCFSA and containing all information required by BCFSA. In addition, it must be accompanied by any documents required by BCFSA as well as be dated and signed by the licensee. Importantly, all information in the statement must be true, written in plain language, and not be misleading.

Duties for dealing in mortgages

This licence category relates to activities involved in originating mortgages. It involves activities such as, soliciting another person to borrow or lend on a mortgage, advising borrowers or lenders about entering into a particular mortgage, providing prospective borrower information to a prospective lender, assessing a prospective borrower on behalf of a prospective mortgage lender, and negotiating or arranging a mortgage on behalf of another person.

Mortgage dealing on behalf of a borrower or lender

When providing the mortgage service of dealing on behalf of a borrower or lender (including a prospective borrower or lender) licensees must take reasonable steps to ensure that any mortgage or mortgage transaction presented is suitable, taking into consideration the unique needs and circumstances of the borrower or lender. Licensees must also identify any material risks of the mortgage or mortgage transaction and disclose that information to the borrower or lender. In addition, mortgage brokerages must establish and maintain policies and procedures regarding these suitability assessments and ensure disclosures are carried out.

Licensees are required to protect their clients’ private information, only sharing it with their client’s consent or as required by law. Licensees have an obligation to keep their client’s information confidential forever, subject to any other legal requirements

Duties for trading in mortgages

A Mortgage Broker specializing in the trading of mortgages facilitates the purchase, sale or exchange of mortgages. Their work includes soliciting another person to buy, sell, or exchange mortgages, buying, selling, or exchanging mortgages on behalf of another person or on their own behalf. The primary responsibilities are to identify opportunities for trading mortgages, negotiating terms, and ensuring compliance with regulatory requirements. A Mortgage Broker (Trader) works with Dealers, Lenders and other Traders.

Duties for administering mortgages

A mortgage broker licensed in the category of administering mortgages may perform one or more of these activities: receiving payment under a mortgage from a borrower and remitting those payments to the lender; monitoring the performance of a borrower with respect to the borrower’s obligations under a mortgage; and, enforcing or taking steps to enforce payment by a borrower under a mortgage.

Written administration agreement required

Before a licensee administers a mortgage, or arranges for another person to do so, that licensee must have a written service agreement (also known as an “administration agreement”) in place with the persons who have an interest in the mortgage. This agreement must outline:

• The agreed-upon remuneration of the licensee or any other person for all services related to the administration of the mortgage and any other expenses or costs related to the mortgage.

• The responsibilities of all parties involved in decisions about collecting money, prepaying the principal, discharging the mortgage, and starting or continuing enforcement proceedings in case of default.

Further details on the required information to be included in administration agreements and an optional agreement template can be found on BCFSA’s Mortgage Services Knowledge Base.

Mortgage administration on behalf of a lender

When providing the mortgage service of administration on behalf of a lender, a mortgage administrator must comply with restrictions on payments to the lender, including preparing mortgage statements and mortgage discharge documentation, as required.

A mortgage administrator must not make a payment to a lender in connection with the administration of a mortgage unless the payment is made from funds paid under the mortgage by or on behalf of a borrower. If an amount is paid by or on behalf of a borrower by cheque, other than a certified cheque, the mortgage administrator must not make a payment to the lender until the cheque has cleared and the funds have been received.

If a mortgage administrator receives funds paid by or on behalf of a borrower under a mortgage, the mortgage administrator must promptly pay to the lender the full amount received, less any amount that the mortgage administrator is entitled to retain under its service agreement with the lender. Upon receipt of funds, the licensee must fulfill trust accounting obligations (see BCFSA’s Mortgage Services Knowledge Base for more information on trust account requirements), as required.

Duties for mortgage lending

A mortgage broker licensed in the category mortgage lending carries on the business of lending money on the security of real property. As of October 13, 2026, persons who are carrying on the business of mortgage lending must be licensed under the MSA as a mortgage brokerage in the lending category. The brokerage must have a principal broker who is also licensed in the lending category, and it may also employ individual mortgage brokers licensed in the lending category.

Duties when receiving money from lender

Licensees must not receive money from a lender or investor for the purpose of mortgage lending, unless an application or offer has been made for a mortgage on a specific property, or an existing mortgage is available for purchase.

Applicable Section of Mortgage Services Act, its Regulations, or the Mortgage Services Rules

Mortgage Services Act

s.31 [Duty to act in good faith]

s. 32 [Records]

s. 33 [Trust accounts]

s. 34 [Wrongful taking]

s. 35 [Deceptive dealing]

MSA Rules

Part 3 – Licensee Standards of Conduct

• Division 1 – General Responsibilities and Duties of Licensees

• Division 2 – Duties to Clients

• Division 3 – Duties Respecting Borrowers and Lenders

s. 63 [No dealing in, trading in or administering mortgages without client]

s. 64 [No mortgage lending to or on behalf of client]

s. 65 [Duty to verify identity of client and representative of client]

s. 66 [No signing of documents on behalf of clients]

Part 5, Division 2 [Disclosures]

s. 80 [Written service agreement required in some cases]

s. 81 [Restrictions on payments to lender]

s. 82 [Amount of payment to lender]