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Avoiding conflicts of interest and working in the best interests of your clients have always been among the most important duties of a real estate licensee. When the Superintendent of Real Estate’s new consumer protection Rules take effect on March 15th, you’ll no longer be able to represent two parties with competing interest in the same transaction. That means that managing the potential for conflicts of interest at the start of your relationship with a consumer will be very important.
Here are a few simple, proactive steps you can take to avoid conflicts of interests.
- Communicate clearly, early and often
Before you begin working for a client, clearly describe your duties, obligations and the scope of the services you will be providing. Clearly discuss the types of conflicts that may arise, and options on how you and your client may resolve them. Let the client know what your obligations are under the Real Estate Services Act, Real Estate Services Rules, and Real Estate Services Regulation.
- Standardize your processes and procedures
Run your business like a business. Mistakes and poor or untimely communications occur when things get busy and crucial steps are missed. Standardized processes and checklists can help ensure that this does not happen to you.
- Remember your role
You are a trusted advisor with special expertise. You must always act in your client’s best interest, taking reasonable steps to avoid any conflicts of interest. If a conflict does arise, you must promptly and fully disclose it to the client.
- Deal appropriately with conflicts of interests as they arise
Unanticipated conflicts can arise. What should you do in situations where your clients suddenly and unexpectedly develop competing interests? To help you understand how to address conflicts of interest when the Superintendent’s Rules banning dual agency (in most instances) come into effect, we’ve added new questions and answers to our online FAQ. Learn more about dealing with former clients and clients with competing interests, including:
- I am the designated agent for a seller, and I have been approached by a former client who is interested in my seller’s property. What should I do after the new Rules come into effect on March 15, 2018?
- I am the designated agent for a seller. A potential buyer with whom I have been dealing for several weeks as an unrepresented party wants to make an offer on my seller client’s property. What should I do after the new Rules come into effect on March 15, 2018?
- I am the designated agent for two buyers who are interested in making an offer on the same home. What should I do after the new Rules come into effect on March 15, 2018?