Realtor Client vs Customer in BC: What Duties Do You Actually Get?

People often say they are a realtor's "customer" when they mean they are simply dealing with the realtor. In everyday talk the word is harmless, but the legal question is different: has this realtor been engaged to act for you?

That distinction decides how much loyalty and advice you can expect. This article explains the terms BC uses, the duties that follow, and how to find out where you stand.

This article covers the law of British Columbia.

The terms the BC rules actually use

Under the Real Estate Services Rules, a "client" is the principal who has engaged the licensee to provide real estate services. 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".

So the real line is client versus unrepresented party. If you have not engaged the realtor, you may be unrepresented even if the realtor is friendly, shows you homes and answers your questions.

Duties owed to a client

A licensee owes a client several duties under section 30 of the Rules. They 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. A licensee must also promptly and fully disclose a conflict to the client, in writing and separately from a service agreement.

These duties can be changed, but only by written agreement. Even then, the brokerage must still supervise its licensees and protect confidential information.

A brokerage must not engage in dual agency, which in plain words means acting for both sides of the same trade. Designating one or more designated agents does not by itself amount to dual agency unless the designated licensee represents both parties as clients. There is an exception for real estate in a remote location where it is impracticable for different licensees to serve the parties. It requires disclosure to each party and a written agreement of dual agency with each party.

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. Representing only one is allowed only if all the clients give written agreement.

Duties owed to everyone else

A licensee must act honestly and with reasonable care and skill, and this applies to parties who are not clients too. That is a real protection, but it is not the same as a duty to advance your interests or keep your negotiating position private.

If the licensee represents a client in the deal, they must tell an unrepresented party the risks of receiving assistance from the licensee and recommend that the party seek independent professional advice.

How you become a client

Before providing trading services, a licensee must disclose whether or not they will represent you as a client. 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. This requirement does not apply if the prospective client waives it.

A brokerage may also designate particular licensees by written agreement. Other licensees at the brokerage then owe that client no section 30 duties, although the brokerage must still supervise and treat clients even-handedly. If you are a client, it is worth knowing which licensee is yours.

A trading services agreement must state the expiry date and the remuneration payable, along with the circumstances in which it is payable. Amendments must be in writing and signed by the client and an authorized signatory, and a copy must be delivered immediately on signing. The Rules do not set out a general right to cancel a listing agreement, so the contract's own terms govern early termination. Read those clauses closely, and ask a lawyer if anything is unclear.

A licensee must also promptly disclose to the client all remuneration paid or payable to the licensee's related brokerage, including its source and amount. In BC, GST at 5% is added on top of a brokerage's commission.

What to do next

• Ask the realtor directly: "Are you representing me as a client in this transaction?"
• Ask for any service agreement in writing and keep your signed copy.
• Find out whether a designated agent has been named for you.
• Be careful what you share if you are not sure you are a client.
• Get independent advice from a lawyer before signing important documents.

If you think a licensee fell short, any person may make a written complaint to the superintendent with particulars. Unless it is anonymous, you will be told it was received and the outcome. Compensation is limited to the Special Compensation Fund for particular losses, not general damages through the complaint process.

Frequently asked questions