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This FAQ explains each duty owed to you by a real estate professional and how that real estate professional must meet those obligations.
When a real estate professional is hired to act on your behalf, whether in the purchase or sale of a property, to rent out a property you own, or even to act on behalf of a strata corporation you are involved with, there are a number of duties that are owed to you by that real estate professional.
Ultimately, it means that a real estate professional must put your interests ahead of any other party to the transaction and must even put your interests ahead of their own. Most of the other duties owed to you also contribute to the obligation of a real estate professional to act in your best interest.
In order to act in your best interest, though, you have a part to play. It is important to talk to your real estate professional often about what is important to you and what your expectations are. By having ongoing conversations, you can ensure that your real estate professional knows exactly what you are looking for and can provide necessary advice to protect you.
Acting in your best interest also means that your real estate professional at times may need to refer you to a third-party service provider. For instance, if you are selling an investment property that you have had rented out and you need to know what tax implications there may be, your real estate professional may be able to provide some general information but will also suggest you get independent professional advice from a tax accountant since tax law is mostly likely outside of their area of expertise.
Conflicts of interest can arise in many ways. Sometimes your real estate professional may be representing another client that has competing interests with yours (such as representing two buyers who want to buy the same home), or sometimes there are parties on two sides of a transaction who want to be represented by the same real estate professional (called dual agency). Sometimes, your real estate professional may be employed in another industry such as a professional who is in real estate sales and is also a mortgage broker who wants to represent you with both the purchase of a home and getting the financing you need.
Whatever the conflict is, your real estate professional has an obligation to avoid it when possible. When it is not possible to avoid the conflict, the real estate professional will advise you of the conflict as soon as it is identified and then discuss the risks and benefits of the different options to address it. You will ultimately get to make the decision that best suits you.
There are instances where addressing a conflict will require your real estate professional to reduce the duties that are owed to you. For instance, if you are looking to buy a home and your real estate professional represented the seller in the past, they will not be able to provide you any confidential information about the seller that may benefit you. This is because the duty of confidentiality owed to that seller goes on forever.
In such a situation your real estate professional may suggest different options for you to choose from. Depending on the amount of confidential information they have on the seller, (and how that could impact you) you may wish to hire another real estate professional who can provide you all information they can obtain about that seller, or you may wish to allow your real estate professional to withhold that confidential information so you can keep working with them. If you choose the second option, your real estate professional will provide you documents to sign outlining the changes in the obligations you have agreed to.
Will my real estate professional ever do something I don’t want because they think it’s in my best interest?
Your real estate professional will only act in accordance with the scope of authority you granted. While they may provide advice on a course of action that they feel is in your best interest, ultimately you will decide what you want to do, and they will not proceed unless given permission.
If, for example, you are part of a strata council and your management agreement with your strata manager includes signing authority on the strata corporation’s bank account, your strata manager will not authorize expenses unless the strata council approves them first. Should your management agreement allow the strata manager to incur expenses without prior approval up to a specified dollar amount, then only expenses that fall below that figure will be approved unilaterally.
If you want to expand or reduce the authority you grant your real estate professional at any time, the original service agreement or disclosure of representation that your council signed will need to be amended to reflect the change in authority given.
Your real estate professional must follow all lawful instructions you provide to them. Since they are acting on your behalf, they must honour your wishes when it comes to executing their duties in a way that satisfies you.
That being said, should you ever ask your real estate professional to do something illegal or contrary to their legislative obligations, they will inform you that what you want may be prohibited, and suggest you get independent legal advice. They may also refuse to provide that service while continuing to provide all other services, or they may request that the agency relationship with you be terminated.
All real estate professionals and their brokerages have a duty to maintain the confidentiality of your information forever. This obligation extends beyond keeping your personal information safe and includes protecting information such as your motivation for entering into a particular real estate transaction etc. from all third parties.
Depending on the type of brokerage your real estate professional is licensed to, your personal information may or may not be visible to other professionals at the office. At the outset of your agency relationship, your real estate professional will outline if and how any of your personal information may be shared within their brokerage. Outside of that, your personal information may only be shared with your permission or where required by law.
This content was developed with financial support from the Real Estate Foundation of BC.