Disclosure of Interest in Trade in BC: When a Realtor Must Give It

You are buying or selling a home and a realtor hands you a disclosure document. It may mention who the realtor works for, how they are paid, or a personal link to the deal. It is natural to wonder whether you have to sign it and whether it signals a problem.

In British Columbia, real estate licensees are regulated by BCFSA under the Real Estate Services Act. This article explains, in plain words, the situations where a realtor has to disclose their own interest or a conflict, and what you can do with that information.

This article covers the law of British Columbia.

What an "interest in a trade" means in plain words

A realtor has an interest in a trade when something other than your best outcome could affect how they act. That could be earning commission, acting for the other side, being related to a party, or owning part of the property. The rules do not treat every interest as forbidden. They require it to be brought into the open so you can decide what to do.

The law draws the main line between a client and an unrepresented party. A client is the principal who has engaged the licensee to provide real estate services, and an unrepresented party is a party to a trade who is not a client of a licensee for that trade. The Rules do not use the word "customer". Which of the two you are changes what the realtor owes you.

The situations where disclosure is required

A conflict disclosure must be in writing and separate from the service agreement. How the form of the other disclosures in the table applies depends on your situation, so it is worth confirming with a lawyer. If a conflict disclosure is buried inside the listing or buyer agreement itself, ask why it is not a separate document.

Acting for both sides and designated agents

The most common interest question is whether one brokerage is acting for both the buyer and the seller. A brokerage must not engage in dual agency. Naming designated agents within a brokerage does not by itself amount to dual agency, unless the designated licensee represents both sides as clients.

There is a narrow exception for a trade in a remote location where it is impracticable for the parties to be served by different licensees. In that case the licensee must first make the required disclosure to each party and then enter a written agreement of dual agency with each party. The brokerage must also promptly give the superintendent the disclosure.

Separately, where a licensee would otherwise act for conflicting clients in one trade, the licensee must either provide trading services to none of them or represent only one client, and may represent only one if all clients give written agreement.

What disclosure does and does not do for you

Disclosure does not remove the realtor's duties. A client is owed duties that include acting in the client's best interests, keeping client information confidential, disclosing all known material information about the services, and communicating all offers in a timely, objective and unbiased manner. Everyone, including parties who are not clients, is owed honesty and reasonable care and skill.

Under designated agency, a brokerage designates one or more licensees by written agreement, and other licensees at the brokerage then owe no client duties to that client, but the brokerage must still supervise and treat clients even-handedly. Client duties can be modified only by written agreement, and even then the brokerage must still supervise its licensees and protect confidential information.

Pay is another common interest. A licensee must not request or agree to remuneration based on the difference between the listed price and the actual sale price, and cannot keep remuneration calculated that way. Commission is paid to the brokerage, which pays its licensees, because a representative or broker cannot accept remuneration for real estate services from anyone other than their own brokerage. Your agreement must state the remuneration payable and the circumstances in which it is payable.

What to do when you receive the form

• Read the whole document before signing and ask the realtor to explain any line you do not follow.
• Check whether it is separate from the listing or buyer service agreement.
• Ask in plain terms whether the realtor or brokerage also represents the other side.
• Ask who is paid, how much and from where, and compare that to what your agreement says.
• If you are not a client and the realtor represents someone else, the realtor must tell you the risks of receiving their assistance and recommend independent professional advice.
• Keep copies of everything you sign, because a service agreement copy must be delivered immediately on signing.

If you think a required disclosure was never made, any person can make a written complaint to the superintendent with particulars. A lawyer can review the documents and explain your options before you decide.

Frequently asked questions