As of June 15, 2018, new rules came into effect for the real estate industry in British Columbia to protect buyers and sellers. As a member of the industry, I am very supportive of these changes as they aim to increase professionalism in the industry and see the changes in our industry as a positive step to re-establish our reputation, which has been tarnished by a few individuals acting unprofessionally.
The most notable change is the ban on dual agency in nearly all cases. Other changes have to do with new disclosure rules, and a language proficiency test.
Last September, Michael Noseworthy, British Columbia’s superintendent of real estate announced the new rules that took effect last week. “These changes have been designed to reinforce a real estate agent’s duties and obligations to their clients, and to ensure that agents are always acting in their client’s best interests. We want to make sure that the advice consumers receive is solely for their benefit, and that consumers have confidence that their agent is undoubtedly on their side,” Noseworthy said in a statement.
Dual Agency Ban
Dual Agency is when a REALTOR represents both the Seller and the Buyer, or two or more competing buyers. This modality is not permitted anymore in British Columbia. An exception to the new rule will apply to extremely remote locations poorly served by realtors.
“The new rules governing real estate practices mark a significant shift in how realtors in BC work with their clients. It’s important that consumers know what to expect when the changes come into effect, ”said Darlene Hyde, CEO of the British Columbia Real Estate Association (BCREA). “The changes will profoundly alter for the foreseeable future the way consumers initially interact with their realtor and the ban on limited dual agency will have a negative impact on consumer choice with respect to their selection of realtor in some circumstances.”
The ban on dual agency comes after a series of scandals in the real estate industry, including “shadow flipping.”
New Disclosure rules
Another significant change that also took effect on June 15 are the new disclosure rules that require agents to provide more information to a client up front, at the start of a business relationship. This includes information on services provided, fees, possible risks, and how a client can file a complaint.
When an offer is presented to a seller, the agent must disclose the remuneration they will receive from the sale.
For instance, realtors won’t be able to ask many questions about a prospective client’s motivations such as their financial position, what they’ve seen in the market, and their reasons for moving. The intent of this rule is to create an information barrier until agency is established – when the agent and client decide to work together. This is essential because once an agent and a client establish a working relationship, the realtor has fiduciary duty to their client and all shared information is confidential.
Keep in mind that if you, as a buyer or seller, share information with the realtor that represents the other party, this agent has to share that information with their client as it is his or her fiduciary duty.
If you have any questions about the new rules and regulations, please do not hesitate to contact me here. I am happy to explain them further and discus how they change realtor-client relationship. My goal has always been to create a trustful relationship with my clients and I am committed to look after their best interests.