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BCFSA’s Guidelines provide a practical application of the information and give suggested best practice guidance to assist real estate professionals. These guidelines provide BCFSA’s interpretation of RESA and all other applicable legislation.
In addition, BCFSA’s Guidelines may be a useful information source for the general public looking for information about standards of conduct for real estate professionals.
Consumers rely on their real estate professionals to provide them with information they require in order to make an informed decision during a transaction and when considering/receiving real estate services. Mandatory disclosures ensure that real estate professionals protect their client’s best interests and are being fully transparent.
Disclosures can take different forms. Some must be made on forms prescribed by BCFSA, some need to be in writing, and some have no method of delivery outlined in the Real Estate Services Rules (“Rules”). Regardless of what the disclosure is, a prudent real estate professional should always make the disclosure in writing and try to get written confirmation that the disclosure has been made in the time and method required.
These guidelines will help you understand how to follow the Rules when it comes to making appropriate disclosures to your clients.
- How to discuss disclosures with clients.
- Understanding disclosures in writing — mandatory forms.
- Understanding disclosures in writing — no mandatory forms.
- Understanding how to make disclosures when they are not required to be in writing.
It is not enough to simply provide your client with a disclosure, you should have a discussion with your client explaining the information being disclosed and ensure that they are providing informed consent.
Mandatory disclosures do more than advise clients about important facts (such as when a real estate professional is selling their own home), they also provide consumers an opportunity to make an informed decision about how to proceed with a transaction based on the information provided. That is one of the reasons why disclosures must be made in a timely manner. While the Rules outline specific circumstances in which a disclosure is required, any time you feel your client may benefit from information about a transaction and/or your role in it, it is always advisable to err on the side of caution and disclose that information early and often.
In addition to disclosing information to your client, you are obliged to ensure that your client understands the information being disclosed. Your client may need help understanding the language used in the form, potential conflicts that could be created as a result of the disclosure, and what alternatives they may have if the disclosure leads to a course of action they are not comfortable with.
At the outset of your agency relationship, you should inform your client that in addition to the disclosure of representation, there are other potential disclosures that may be required as throughout the transaction.
Some disclosures outlined in the Rules require that you use a form approved by BCFSA. Where this is the case, you will typically see language in the Rules indicating that a disclosure must be made in a form approved by the BCFSA. This indicates that you must use a BCFSA form in order to make the disclosure and that no other written form is permitted. BCFSA disclosure forms can all be accessed on the BCFSA website.
These disclosures must be retained in the brokerage file for the period of time indicated in the Rules. You need to ensure that you are familiar with the mandatory forms that are required.
Some disclosures are required to be in writing and on mandatory BCFSA forms, while for others, the Rules simply indicate they need to be in writing. This means that any written form of disclosure is permitted including handwritten, email or text message.
When providing a written disclosure where no BCFSA form is required, you should review the information outlined in the Rule and ensure that the language and content you are using satisfies the disclosure requirements. This will ensure that you do not miss elements of the disclosure that must be included. For instance, if you are required to disclose that your conduct is not covered under RESA because of an exemption, the Rules may also require you to advise the consumer that there are risks associated with proceeding with a transaction where no protections are given. Leaving out that second component could invalidate the disclosure and put you in violation of the Rules.
Where any form of written disclosures is permitted, brokerages should have a policy in place to ensure that all real estate professionals make the disclosure the same way to satisfy that the Rules are being properly applied and clients are being informed consistently. You should speak to your managing broker to determine if your brokerage has developed any forms that you can use to make the required disclosures.
While not all disclosures are required to be made in writing under the Rules, as a prudent real estate professional, you should always document when you have made a disclosure and that the disclosure was made with all information required under the Rules.
Once you provide the written disclosure to your client or consumer, having them acknowledge receiving it is best practice. This may be a reply to an email you sent which is dated and includes the time , or it may involve having them sign a document or form you or your brokerage has created. An acknowledgement that the disclosure was made and made according to the requirements set out in the Rules will provide evidence that the disclosure was made as required. These written forms of the disclosure and acknowledgement of receipt should then be retained in your brokerage file.
The real estate professional was the buyer’s agent in the purchase of a property and a subsequent assignment. The assignee was a director of the brokerage with which the real estate professional was licensed. In other words, the assignee was an “associate” of the real estate professional as that term is defined in the Rules. The real estate professional did not provide a Disclosure of Interest in Trade to either the seller or the buyer/assignor, as required. Neither the real estate professional nor her managing broker believed that a disclosure of interest in trade to the seller was necessary since the assignee was purchasing the property by way of assignment, and his relationship was with the assignor.
Contraventions: Sections [Duty to act with reasonable care and skill] and [Disclosure of interest in trade] of the Rules, among others.Read the full case
Disclosures form an important part of every client relationship and your practice as a real estate professional. From disclosing conflicts of interest, to disclosing an interest in trade, to the disclosure of material latent defects, each disclosure will have its own requirements when it comes to the timing and method in which the disclosure must be made. Disclosures also form part of a real estate professional’s obligation to act in their client’s best interest by providing them the necessary information they need to move forward in a transaction.
As a managing broker, you are expected to know which disclosures need to be documented on forms provided by BCFSA, which disclosures are required in written form, and which can be made orally. Where written disclosures are required, it is up to the managing broker to ensure that the appropriate documents are stored and retained in the brokerage file as per the Real Estate Services Rules. You should also ensure that disclosures created by your real estate professionals contain all the pertinent information required under the Real Estate Services Rules.
Where disclosures can be made orally and are not required to be in writing, a prudent real estate professional will obtain written confirmation from their client indicating that the required disclosure has been made in the time required under the Real Estate Services Rule. Always having written confirmation of a disclosure will protect both the real estate professional and the brokerage should a dispute arise. Where any form of written disclosures is permitted, brokerages should have a policy in place to ensure that all real estate professionals make the disclosure the same way to satisfy that the Real Estate Services Rules are being properly applied and clients are being informed consistently. Using available BCFSA forms is easy and ensures that the disclosure contains the content required by the Real Estate Services Rules.
A comprehensive policies and procedures manual will ensure that all real estate professionals of the brokerage understand the expectations around disclosures and will create consistency between all brokerage files when it comes to those disclosures.
- Section 30, Real Estate Services Rules, Duties to Clients
- Section 52, Real Estate Services Rules, Disclosures Under This Division
- Section 53, Real Estate Services Rules, Disclosure of Interest in Trade
- Section 54, Real Estate Services Rules, Disclosure of Representation in Trading Services
- Section 55, Real Estate Services Rules, Disclosure of Risks to Unrepresented Parties
- Section 56, Real Estate Services Rules, Disclosure of Remuneration
- Section 57, Real Estate Services Rules, Disclosure to Sellers of Expected Remuneration
- Section 58, Real Estate Services Rules, Benefits in Relation to Property Management Services and Strata Management Services
- Section 59, Real Estate Services Rules, Disclosure of Latent Defects
- Section 64, Real Estate Services Rules, Dual Agency in Under-Served Remote Location
- Section 94, Real Estate Services Rules, Management of Rental Real Estate Owned by Licensee
- Section 95, Real Estate Services Rules, Management of Rental Restate Owned by Licensee’s Family
- Section 96, Real Estate Services Rules, Management of Strata Corporation by Licensee Who is an Owner
- Section 97, Real Estate Services Rules, Acquisition or Disposition of Real Estate by Licensee or a Spouse or a Family Partner of a Licensee
Associate in relation to a real estate professional means: a person who is any of the following:
- in the case of an individual real estate professional,
- a spouse or family partner of the real estate professional,
- a trust or estate in which the real estate professional, or a spouse or family partner of the real estate professional, has a substantial beneficial interest or for which the real estate professional, spouse or family partner serves as trustee or in a similar capacity, or
- a corporation, partnership, association, syndicate or unincorporated organization in respect of which the real estate professional, or a spouse or family partner of the real estate professional, holds not less than 5% of its capital or is entitled to receive not less than 5% of its profits;
- in the case of a brokerage that is a corporation or partnership,
- a director, officer or partner of the brokerage,
- a shareholder of the brokerage who holds more than 10% of the voting shares of the brokerage,
- a trust or estate
- in which the brokerage, or a director, officer or partner of the brokerage, has a substantial beneficial interest, or
- for which the brokerage, or a director, officer or partner of the brokerage, serves as trustee or in a similar capacity, or
- a corporation, partnership, association, syndicate or unincorporated organization in respect of which the brokerage, or a director, officer or partner of the brokerage, holds not less than 5% of its capital or is entitled to receive not less than 5% of its profits;
Dual agency: means the representation, in respect of a trade in real estate, by the brokerage of the following:
- both the seller and the buyer as clients;
- both the lessor and the lessee as clients;
- both the assignor and the assignee as clients;
- 2 or more buyers, lessees or assignees, as the case may be, as clients who have conflicting interests in respect of the trade in real estate
Client: means, in relation to a real estate professional, the principal who has engaged the real estate professional to provide real estate services to or on behalf of the principal;
Family partner: means a person who is living and cohabiting with a real estate professional in a marriage-like relationship, including a marriage-like relationship between persons of the same gender
Unrepresented party means: in respect of a trade in real estate, a party to the trade in real estate who is not a client of a real estate professional for the trade in real estate.
Remuneration: includes any form of remuneration, including any commission, fee, gain or reward, whether the remuneration is received, or is to be received, directly or indirectly.