Written by Mike Stewart PREC on June 4, 2019
For Realtors in British Columbia there is a big difference between a person with whom they have an Agency Relationship and with whom they do not.
When meeting and talking with a licensed real estate agent in BC about real estate, the Realtor is requited to have a discussion is required to determine whether the person speaking to the Realtor wants to enter into an Agency Relationship and receive real estate trading services or not.
The basis of the Agency Relationship is informed consent which is basically this is when a person is able to agree or consent to something based having all the relevant and applicable facts discloses to this person.
What is the Agency Relationship in BC?
According to G.H.L Fridman in Canadian Agency Law, Agency is defined as follows:
“Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position by the making of contracts or the disposition of property”
The Agency Relationship also includes a fiduciary relationship, whereby the Realtor owes the client a duty defined in the legal case Ben-Israel v. Vitacare Medical Products Inc as the following:
“A fiduciary duty imposes the highest duty in law on the party holding the duty—the fiduciary—to act altruistically for the sole benefit of the beneficiary, to the fiduciary’s own detriment if necessary. The traditional categories of relationship in which a fiduciary duty exists are agent to principal, lawyer to client, trustee to beneficiary, business partner to partner, and director to corporation. In all of these situations, a fiduciary duty exists because the fiduciary has assumed a position, and taken on a responsibility, in which the beneficiary’s interest is dependent upon the fiduciary’s actions.”
loyalty to clients, avoiding conflicts of interest, full disclosure to clients & protecting the confidentiality of our clients is the basis of how we serve our clients.
The Disclosure of Representation in Trading Services (DORTS) Document
This is the document a Realtor needs to discuss with an unlicensed person who wants to discuss substantive real estate topics and have that unlicensed person sign. Substantive topics include motivation for a purchase or sale, budgets for a purchase, an unlicensed persons personal situation among others.
The purpose of the document is to allow an unlicensed person to clearly understand the duties and obligations a licensed Realtor owes them, irrespective of whether the unlicensed person enters into an agency relationship with that Realtor or not.
The DORTS document does not bind the unlicensed person to the Realtor or vice versa. It is strictly a disclosure to the unlicensed person about the agency relationship, the differences of having representation in trading services or not, and what duties the unlicensed person can expect expect from a Realtor based on the relationship the unlicensed person decides to enter into based on informed consent.
There are two professional relationships a Realtor can enter into with a person based on informed consent in British Columbia:
- A Client where the unlicensed person enters into an Agency Relationship with a Realtor or
- An Unrepresented Party who does not enter into a Agency Relationship with a Realtor
What to expect as a Client on the Disclosure of Representation in Trading Services
Below is what a person should expect when entering into an Agency Relationship with a Realtor in BC according to the Disclosure of Representation in Trading Services document:
- Loyalty – The Realtor must put the clients interests first, even before their own.
- Avoid Conflicts of Interest – The real estate agent must avoid any situation that would affect their duty to act in your best interests.
- Fully Disclose Relevant Information – The Realtor must give you all the facts that they know might affect your decisions.
- Protect your Confidentiality – The Realtor must not reveal your private information without your permission, such as; your reasons for buying/selling/leasing/renting. The minimum/maximum price you are seeking. Any preferred terms and conditions you want to include in a contract.
What to expect as an Unrepresented Party on the Disclosure of Representation in Trading Services
Below is what to expect if you choose not to have a Realtor represent you and do not enter into an Agency Relationship:
- No Loyalty -The Realtor involved in the transaction are representing clients with competing interests to yours. They must be loyal to their clients, NOT YOU.
- No Duty to Avoid Conflicts – NO real estate agent is acting in your interests.
- No Full Disclosures – The Realtor involved in the transaction DO NOT have a duty to you give you all relevant information.
- No Confidentiality – The real estate agent involved in the transaction must share any information you tell them with THEIR CLIENT.
Vancouver New Condos Policies on The Agency Relationship and The Disclosure of Representation in Trading Services Document (DORTS)
The informed consent of our clients to both working with us and to any and all transactions we support them with is required at Vancouver New Condos.
When we start any new relationship with someone who would like to be our client, we need to have a conversation about Agency and the Agency Relationship (we also need to have a document signed – see above) and ensure these new clients are able to give informed consent.
This is why when you sign up on the Vancouver New Condos website with your phone number, we call you and want to speak to you on the phone.
We are not able to email information aside from basic factual responses to people who are not able to or are unwilling to speak to us on the phone.
When working with new people who want to be our clients, we first need to have a conversation on the phone or in person to discuss the Agency and get informed consent from this person to enter into the Agency Relationship.
To learn more about how we operate, please have a look at what to expect when you sign up on this site.
We believe this is important, as an informed consumer is a protected consumer and being in compliance and protecting our clients interests is our top priority above all else.