What the Real Estate Services Act Means for BC Buyers and Sellers

If you are buying or selling a home in British Columbia, a realtor will probably be involved. The Real Estate Services Act and the Rules made under it set out what that realtor must do, and what you can expect.

This article explains the main points in plain words. It is general information, and your own contract and circumstances matter, so a lawyer can confirm how it applies to you.

This article covers the law of British Columbia.

Who regulates realtors in BC

BCFSA (the BC Financial Services Authority) is the regulator of real estate licensees under the Real Estate Services Act. Since August 1, 2021, the former Office of the Superintendent of Real Estate and the Real Estate Council of B.C. have been integrated into BCFSA, so older sources that refer to the Council are out of date.

BCFSA licenses and regulates real estate agents, rental property managers and strata managers, and it also regulates real estate development marketing. The Act also provides for a Superintendent of Real Estate, appointed by the Authority's board, who exercises the Act's powers.

In general, a person must not provide real estate services to or for another person for pay unless licensed or exempt. The exemptions include people acting under court authority, certain trustees and executors, and practising lawyers.

Client or unrepresented party

The Rules draw the legal 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.

Before providing trading services, a licensee must disclose whether or not they will represent you as a client. If they represent someone else in the deal, they must tell you the risks of getting assistance from them and recommend that you seek independent professional advice.

The written service agreement

A brokerage providing trading services must have a written service agreement signed by the client and an authorized brokerage signatory, entered into before the brokerage represents the client in offering the property for sale. A prospective client can waive this requirement, so do not assume you will always be handed one.

The agreement must state its expiry date, the remuneration payable and the circumstances in which it is payable. Amendments must be in writing and signed by you and an authorized signatory, and you must receive a copy immediately on signing.

The Rules do not give a general right to cancel a listing agreement, so early termination is governed by the contract's own terms. Read that clause before you sign.

Conflicts, dual agency and commission

• A brokerage must not engage in dual agency, meaning acting for both sides, with limited exceptions.
• Naming designated agents does not by itself amount to dual agency unless the designated licensee represents both parties as clients.
• A brokerage may act on both sides in a remote location where different licensees are impracticable, after disclosure and a written agreement with each party.
• Conflicts must be disclosed promptly and fully, in writing and separately from the service agreement.

The agreement must state the remuneration payable and the circumstances in which it is payable, so the commission terms are in your contract and worth reading closely before you sign. A licensee cannot request or keep remuneration based on the difference between the listed price and the actual sale price. GST of 5% is added on top of the commission, because GST rather than HST applies in BC. When presenting an offer to a seller, the licensee must disclose the seller's payments to the listing brokerage, any cooperating brokerage and the amounts retained.

If something goes wrong, and what to do next

Anyone can make a written complaint, with particulars, to the superintendent if they believe a licensee may have committed professional misconduct or conduct unbecoming. Unless the complaint is anonymous, the superintendent must acknowledge it and tell you the outcome. Possible orders include a reprimand, suspension or cancellation, conditions, and a penalty of up to $500 000 for a brokerage.

The discipline process does not award you damages. Compensation is available only through the Special Compensation Fund, and only for money held by a licensee that was misappropriated, wrongfully converted or fraudulently obtained.

• Keep your service agreement, disclosures and all written communication.
• Ask in writing whether the licensee will act for you as a client.
• Read the commission and termination clauses before signing.
• Check the BCFSA website for current complaint steps.
• Speak with a lawyer if you are in a dispute or a deadline may apply.

Frequently asked questions