41 What licensees must doLicensees must be honest, competent, up front with consumers, and must fulfill their obligations to clients. Show
Licensees must not work with a client if the client asks them to withhold information that they are legally required to disclose. Licensees have to comply with all applicable legislation and RECA rules, cooperate with RECA investigators, and obey any restrictions on their licence. Additional Resources Section Link: Real Estate Act Rules, Sec 41 Professional
Responsibilities 42 What licensees can’t doLicensees can’t:
Additional Resources Section Link: Real Estate Act Rules, Sec 42 Professional Responsibilities Prohibition 43 Written Service AgreementsAll mortgage brokers, property managers, and residential real estate licensees must outline their relationship with you using a written service agreement. RECA recommends commercial real estate licensees use written service agreements, but it’s not a requirement. Written service agreements communicate:
All of these are negotiable. Agreements must:
Any changes made to a written agreement must be in writing and signed by all parties. Your licensee must give you a copy of agreements and amendments immediately after signing. Additional Resources Section Link: Real Estate Act Rules, Sec 43 Written Service Agreements 44 Protecting client informationYour licensee can’t share your personal information with anyone unless you give them permission, or they are required by law. This includes your personal information (address, age, marital status, health, financial situation, etc.), and your transaction information (e.g. reasons for buying, selling, or getting a mortgage). All brokerages must have policies for protecting client’s personal information. Everyone at the brokerage needs to be aware of the policies and follow them. Licensees must keep your information confidential even after a transaction ends. Additional Resources Section Link: Real Estate Act Rules, Sec 44 Information & Privacy 45 Letting you know if they are benefiting by referring you to a service providerSometimes licensees refer consumers to other real estate licensees (e.g. a real estate licensee refers you to a mortgage broker) or other service providers (e.g. a lawyer, home inspector, home stager, etc.). If a real estate licensee refers you to someone, they must tell you, in writing, and have your permission to share your personal information. If they may receive a benefit of some sort (referral fee, business in kind, or some other benefit) as a result of the referral, they also need to tell you that in writing. Additional Resources Referrals & Recommendations 46 Brokerage administrative employees and assistantsReal estate licensees may have support personal and assistants to complete tasks that do not require a licence. The unlicensed individual must be competent, and the real estate licensee must supervise them. For example, unlicensed assistants or brokerage employees can file documents, set up meetings or showings, or prepare promotional material for the broker’s approval. There cannot be any suggestion that an unlicensed individual is licensed. Additional Resources Section Link: Real Estate Act Rules, Sec 46 Assistants & Employees Sections 47-63: Real Estate Brokerage Licensees48 Working with a real estate licenseeConsumers establish an agency relationship with a real estate brokerage when they agree that the brokerage and the licensee will work on the consumer’s behalf. This is a client relationship. If the brokerage and the licensee are not working on behalf of the consumer through an agency relationship, the consumer is a customer, and the brokerage and the licensee have reduced responsibilities. Real estate licensees need to work through a licensed brokerage. One real estate broker manages each brokerage and most brokerages have real estate associate brokers and real estate associates. Additional Resources Section Link: Real Estate Act Rules, Sec 48 Consumer Information: Working with an Industry Licensee 49-54 Responsibilities and prohibitions of all real estate licensees
Additional responsibilitiesReal Estate Brokerages Must have a licensed broker. Real Estate Brokers Must:
Real Estate Associate Brokers and Associates Must:
Additional Resources Sections Link: Real Estate Act Rules, Sec 49-54 Professional Responsibilities Prohibitions Assistants & Employees Information & Privacy Referrals & Recommendations Advertising 55 Disclosing information to youAs soon as possible, and in writing, real estate licensees must, disclose to consumers they are representing:
They must ask you to acknowledge in writing that they gave you this information. Real estate licensees do not have to disclose these things to you if they are merely hosting an open house you choose to attend, if you are in preliminary discussions about possibly working with them, or if they are responding to general questions from you as a potential client. They only need to make these disclosures when you begin formally working with them, typically through signing a written service agreement. Additional Resources Professional Responsibilities Written Service Agreements Sections 57-60: Types of Real Estate Representation57, 58 Sole agency – real estate professional’s obligations to clientsYour real estate licensee must use their best efforts to market your property if you’re a seller, and to find a property that meets your requirements if you’re a buyer. This includes showing a buyer properties listed by other brokerages and for-sale-by-owner properties
Additional Resources Section Link: Real Estate Act Rules, Sec 57-58 Professional Responsibilities Industry Roles Relationships &
Representation 58.1 Designated agency brokeragesIn designated agency, the brokerage designates an individual real estate licensee (or multiple licensees) to act as the designated agent for a consumer. The assumption is the rest of the brokerage has no knowledge of the consumer’s confidential information, and other licensees from the brokerage don’t represent them. The basic obligations of designated agents are the same as in sole agency (see above). Designated agency brokerages must have policies and procedures to ensure protection of confidential information and policies that govern the brokerage’s operations. They must communicate these policies to clients. Agreements between consumers and designated agency brokerages must be in writing, and must contain the following details:
Additional Resources Section Link: Real Estate Act Rules, Sec 58.1 Relationships & Representation Industry Roles 59, 59.1 When a common law brokerage represents the buyer and the seller (transaction brokerage)If a buyer and seller are both represented by the same brokerage, it’s a conflict of interest. The brokerage cannot work in the best interests of both sides in the same deal, but the transaction can continue if the buyer and seller agree with transaction brokerage. In transaction brokerage, the brokerage treats each party like a customer, not a client. In transaction brokerage, the brokerage must treat both parties in an even-handed, objective, and impartial manner. The brokerage cannot advocate for either party, nor can it use discretion or judgement to advance the interests of one party over the other. Before agreeing to transaction brokerage, the buyer and seller both need to have a chance to review the transaction brokerage agreement and request any additional information if they need it. If one of the parties does not agree to transaction brokerage, the brokerage will continue to represent the consumer that first had a written agreement with the brokerage. The other party can be a customer of the brokerage, or the brokerage can refer that party to another brokerage or to another designated agent within the same brokerage in the case of designated agency brokerages Transaction brokerage agreements must outline:
The services they will provide to each side include:
In transaction brokerage, the brokerage or designated agent has to disclose all known defects with a property to the buyer, and all material facts related to the buyer’s ability to purchase the property to the seller. The brokerage will continue to follow the rules for sole agency, including:
Additional Resources Section Link: Real Estate Act Rules, Sec 59-59.1 Professional Responsibilities Industry Roles Relationships & Representation 60 Being treated as a customer and not a clientYou can choose customer status with a brokerage or designated agent, and you will sign a Customer Acknowledgement Form. When you are a customer, a brokerage or designated agent will give you reasonable care and skill, they will not knowingly mislead you, they will hold any deposit money in a trust account, and otherwise comply with the legislation. A customer acknowledgement outlines that you understand what it means to be a customer, and that you had the opportunity to get more information or advice before signing it. When you are a customer, the brokerage or designated agent does not work in your best interests, and will not give you any advice or advocate on your behalf. The brokerage or designated agent will:
Additional Resources Section Link: Real Estate Act Rules, Sec 60 Industry Roles Relationships & Representation 60.1, 61 Forms when you agree to work with a real estate licenseeReal estate licensees have to use certain forms. The list of forms are in the Rules, and contain some mandatory content. Real estate licensees can use forms that contain additional content, but that additional content can’t affect the content that is mandatory. Real estate licensees can’t change the mandatory content unless a client asks them to change it and all parties agree. Real estate licensees must provide and discuss the Consumer Relationships Guide with residential buyers and sellers they’re working with. By signing this document, you are acknowledging that you received and understand it. It is not a contract and it does not obligate you to anything. When a real estate licensee receives an offer or an accepted offer in writing, they have to give their client and the other party a true copy of it as soon as possible. Additional Resources Section Link: Real Estate Act Rules, Sec 60.1-61 Professional Responsibilities Relationships &
Representation Written Service Agreements 62 When a real estate licensee wants to buy your property, or sell you theirsReal estate licensees, when buying or selling property on their own behalf, must disclose the following in writing, if the other party to the transaction is unrepresented:
Disclosure rules also apply when an individual who works for a brokerage or who is associated with a brokerage (for example, a family member of the brokerage’s broker) wants to buy a property that is listed with the brokerage, the brokerage must immediately disclose, in writing, to the seller:
The real estate licensee must also provide you the opportunity to obtain legal advice before proceeding. Additional Resources Section Link: Real Estate Act Rules, Sec 62 Professional Responsibilities 63 Guaranteeing they will sell your propertySome licensees offer guaranteed sales to sellers, but they can only make that offer on behalf of their brokerage. They can’t personally offer you that guarantee. Additional Resources Section Link: Real Estate Act Rules, Sec 63 Advertising Sections 64-75: Mortgage BrokerageWorking with a mortgage brokerage licenseeBorrowers enter into an agency relationship with a mortgage brokerage when they agree that the brokerage and the licensee will represent their interests in trying to get a mortgage. If the brokerage and the licensee are not representing the borrower, but instead are working as a go-between between a lender and the borrower or are working on behalf of the lender, the brokerage and the licensee have different responsibilities to the borrower. Licensed mortgage brokerage licensees need to work through a licensed brokerage. One broker manages each brokerage, and most brokerages also have mortgage associates. 65, 66, 67, 69, 70 Responsibilities and Prohibitions of all mortgage brokerage professionals
Additional responsibilities and prohibitionsMortgage Brokerages When starting to work with a borrower, mortgage brokerages must disclose:
Mortgage brokerages must disclose to you and to a lender, in writing, what steps they’ve taken to verify the information you and a lender give them, including your identity, your income, your debts, and the lender’s rates, mortgage products, and details. They need to keep copies of supporting documents on file at the brokerage. A mortgage brokerage cannot offer a lender or investor a guarantee of a mortgage loan. Mortgage Brokers Must
Mortgage Associates Must
Additional Resources Sections Link: Real Estate Act Rules, Sec 64-70 Professional Responsibilities Prohibitions Information & Privacy Relationships & Representation Assistants & Employees Referrals & Recommendations Advertising 71 Charging feesIn residential and farming operation mortgage deals, a brokerage can only:
A borrower can agree in writing to reimburse a brokerage for costs related to third-party fees, such as for credit reports, land title searches, couriers, or appraisal services. Additional Resources Section Link: Real Estate Act Rules, Sec 71 Professional Responsibilities Relationships & Representation 73, 74 When a mortgage licensee has a client who is a lenderMortgage brokerages need to have a written service agreement when working with a lender client, unless the lender asks to waive this requirement, and the parties agree to waive it in writing. The agreements must
Mortgage brokerages must ensure lender clients have a copy of the registered mortgage, a copy of the title for the mortgaged property, a copy of any reports from the lawyer The above responsibilities in this section do not apply if the client is a bank, other financial institution, or a person who is in the business of providing loans secured with mortgages. When a mortgage brokerage represents a lender, it is still responsible for ensuring the borrower receives a copy of the Cost of Credit Disclosure statement (containing mortgage term, amount, rate, etc.); a copy of the mortgage; a copy of the property title showing the mortgage; any reports from a lawyer; and, a copy of any title insurance or real property report. Additional Resources Section Link: Real Estate Act Rules, Sec 73-74 Relationships & Representation 75 A mortgage licensee acting as a lender or a borrowerMortgage licensees can act as lenders or borrowers. They can also represent family members, close friends, and associates, but they must disclose, in writing:
Additional Resources Section Link: Real Estate Act Rules, Sec 75 Information Bulletin: Personal Mortgage Deals What are the 3 major sections of the Code of Ethics?The Code of Ethics is divided into three major sections, "Duties to Clients and Customers," "Duties to the Public," and "Duties to REALTORS."
What are Ethics in real estate?Practice honesty and do not mislead clients. Adhere to qualities of fairness. Operate with the highest level of integrity, which entails acting honestly and ethically when dealing with all parties to reduce controversy and avoid going to court.
Is Bob in violation of Article 2?It would apply only if the builder had a buyer agency agreement with the buyer. 2. Is Bob in violation of Article 2? Yes.
What concept is the Code of Ethics based on?The Code of Ethics is based on the concept of:
Let the public be served.
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