December 29, 2017

Mandatory Forms & Small Brokerages

Welcome to week three of the RECBC’s Real Advice e-newsletter, bringing you the information you need to comply with new Consumer Protection Rules being introduced by the Superintendent of Real Estate in June 2018.

The new rules will mean that beginning March 15, 2018, licensees must:

  • use a new mandatory form to disclose to a seller, each time an offer is presented, the remuneration to be paid by the seller to the listing brokerage.
  • use a new mandatory form to inform consumers of the duties and responsibilities a licensee owes to clients and unrepresented parties.
  • use a new mandatory form to disclose to consumers the risks of being an unrepresented party in a real estate transaction.
  • stop practicing dual agency, except in very rare circumstances.

Full Disclosure: New Mandatory Forms Coming

To make the disclosures required under the new rules, licensees will need to use new disclosure forms. Starting on March 15, 2018, instead of using the Working with a REALTOR® brochure produced by the British Columbia Real Estate Association to explain your duties to a new client, you will be required to present consumers with a new form currently being developed by RECBC. New forms to use when disclosing remuneration, and when dealing with someone as an unrepresented party or in rare cases of limited dual agency are also being prepared by RECBC.

As we develop the new required disclosure forms, we are consulting with industry members, consumers, and related groups to make sure they are easy for everyone to understand, simple to use, and convenient. We are developing educational materials about how and when to use the forms, as well as creating resources you can share with consumers to help them understand the forms.

We’re committed to making sure you have the forms you need to continue providing real estate services well in advance of June 15, 2018. To learn more about our development process, see RECBC’s Stakeholder Engagement page.

Answers to Your Questions: Small Brokerages

Each week we answer some of the top questions we’re receiving from licensees around the province about the new rules. This week we’re looking at issues faced by small brokerages.

Many of you who work in small brokerages have asked us how your business practices will be affected by the changes to dual agency, including:

I am the managing broker of a small brokerage. Can I act as a designated agent for a client while also acting as my licensee’s managing broker in the same transaction?


A small office must, at a minimum, have a managing broker and at least two other licensees in order to represent both a buyer and seller in a transaction through designated agency.

Any office practicing designated agency, regardless of its size, must also have information barriers in place to ensure that client information is appropriately isolated and protected.

I am licensed as a representative and work in a small office. My managing broker is my mother, and the other representative working in my office is my husband. Can my husband and I, through designated agency, act for a buyer and seller in a transaction?

It depends. It may be acceptable if you have the informed consent of both clients, and as long as you ensure that:

  • The confidential information of each client is protected; and
  • You and your husband each exercise independent professional judgment, and act in the best interests of your clients.

If you are the designated agent for the seller, and a close relative of yours is the designated agent for the buyer, you and the other designated agent are both in a conflict of interest. Each of you must disclose this conflict to your respective clients so they can decide whether they wish to seek different representation.

Even if your respective clients consent to you and your husband acting as their designated agents in the transaction, doing so will expose you, your husband, and your brokerage to significant risk. You and your husband should carefully document all aspects of the transaction, and be prepared to have your conduct in the transaction scrutinized at a later date.

I work at a small office with one managing broker and one representative. Can my office, through designated agency, act for a buyer and seller in a single transaction?

No. You cannot act as a designated agent for the buyer while also acting as your licensee’s managing broker for the transaction.

It would not be appropriate for you to act as designated agent for the buyer while also supervising your licensee (the designated agent for the seller.) To do so would create a conflict between your duty as managing broker to treat the interests of all clients of the brokerage in an impartial and even-handed manner, and your duty as a designated agent to put your client’s interests ahead of all others. Instead, you can either:

  • With the buyer’s consent, designate another licensee of the brokerage to represent the buyer; or
  • Act as designated agent for the buyer, but delegate your duties as managing broker in respect of the transaction to another licensee of the brokerage. For a more detailed explanation of how this may be done, see the Brokerage Standards Manual.
I am a licensee at a brokerage in a town of 2,000 people. There are two licensees at my brokerage: myself and my managing broker. While acting as the designated agent for a seller, an unrepresented buyer asks me if I can represent her in making an offer to purchase my seller client’s property. Do I qualify for the exemption to the rule prohibiting dual agency?

nless you and your managing broker can make a strong argument that all three conditions for the exemption to the rule prohibiting dual agency are satisfied, you should not consider providing limited dual agency.

You need to ask yourself the following questions:

  • Is my town remote?
  • Is it also underserved by licensees?
  • Would it be impracticable (i.e. impossible) for another licensee to represent the buyer? For example, is there no other licensee in my town, or in another community, who could provide independent representation to the buyer?

Unless you and your managing broker can make a strong argument that all three conditions are satisfied, you should not consider providing limited dual agency. RECBC will be examining any disclosures of limited dual agency very closely, to make sure that consumers are protected.

Find answers to these questions and more in the New Rules FAQ on our website. Do you have a question that hasn’t been covered in our online FAQ? Send it to us using our online form. Each week we’ll continue to post new answers to your top questions.