Does the Realtor Work for You? Client vs Unrepresented Party in BC

When you buy or sell a home in British Columbia, you will probably deal with several realtors. It is easy to assume that every one of them is working for you, but that is not always the case. Whether a realtor represents you affects what they owe you.

This article explains the line the law draws between a client and an unrepresented party, what each is owed, and what a licensee must tell you up front. BCFSA (BC Financial Services Authority) is the regulator of real estate licensees.

This article covers the law of British Columbia.

Client or unrepresented party: the legal line

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.

You may hear people say "customer" in everyday talk, but the Rules do not use that word. What matters legally is whether you have engaged the licensee. If you have not, you are generally an unrepresented party for that trade, even if the realtor is friendly, helpful and shows you through the home.

What a licensee owes only to clients

Section 30 of the Rules sets out the duties owed to a client. They include:

• Acting in the client's best interests.
• Keeping the client's information confidential.
• Disclosing all known material information about the services.
• Communicating all offers in a timely, objective and unbiased manner.
• Promptly and fully disclosing any conflict to the client, in writing and separately from a service agreement.

What a licensee owes everyone

Some duties apply no matter who is on the other side. A licensee must act honestly and with reasonable care and skill, including toward parties who are not clients.

This means an unrepresented party is not left without protection. But it is a narrower set of duties than a client receives, so you should not expect the other side's realtor to look after your interests.

What must be disclosed, and when

Before providing trading services, a licensee must disclose whether or not they will represent you as a client. If the licensee represents a client in the trade, they must also tell an unrepresented party the risks of receiving assistance from the licensee, and recommend that the party seek independent professional advice.

Changing duties and designated agency

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

Designated agency can also change who owes you duties. A brokerage may designate one or more licensees by written agreement. Other licensees at the brokerage then owe no s. 30 duties to that client, but the brokerage must still supervise and treat clients even-handedly. If your brokerage uses this approach, ask which licensee is designated for you.

What to do next

• Ask each realtor you deal with, early on, whether they represent you.
• Make sure any disclosure about representation is clear before they provide trading services.
• Read any written agreement that changes the usual client duties before you sign.
• If you are unrepresented and the licensee represents a client in the trade, they must tell you the risks of receiving their help and recommend that you seek independent professional advice.
• Ask which licensee is designated for you if the brokerage uses designated agency.

If you are unsure where you stand, a lawyer can review your agreement and explain how these rules apply to your situation.

Frequently asked questions