British Columbia has become the first province to ban dual agency, with new rules set to come into force on March 15, 2018.

“These rules will significantly change the way that real estate services are provided in British Columbia,” said Micheal Noseworthy, B.C.’s superintendent of real estate. “The changes will empower consumers and provide clarity around the role of an agent. Ending dual agency removes the potential for conflict and serious problems. We want to create transparency for both consumers and licensees to ensure everyone understands in whose interest licensees must be working.”



The Office of the Superintendent of Real Estate (OSRE) says the new rules originate from the recommendations made in the final report of the Independent Advisory Group on Real Estate Regulation in B.C. in June 2016.

It says the new rules will also:

  • Require enhanced disclosure of real estate licensee remuneration that will inform consumers about how remuneration is to be divided between a listing brokerage and co-operating brokerage.
  • Ensure licensees inform consumers of the duties and responsibilities owed to both clients and unrepresented parties before working with consumers.
  • Warn consumers of the risks of relying on a licensee to provide limited assistance if the licensee already represents another party to the transaction.

The rules will also provide for a small exemption to the dual agency prohibition in situations where a property is so remote as to make finding another agent extremely difficult. Strict reporting requirements will apply in these circumstances, says OSRE.

A consultation on the rules was completed on Oct. 6 after OSRE posted a draft version of the proposed rules for a 30-day public comment. The dual agency ban was supported by 62.6 per cent of the public but just 34.7 per cent of licensees.

Among the objections to the rule was that a restriction on dual agency would limit a consumer’s choice to work with their preferred licensee, with whom they may have developed trusting, long-standing relationships, and that consumers may prefer to work with the listing agent, whom they believe has the most information about the property and may be able to save on commission.

In response, the OSRE says that “acting as a dual agent may impede the ability of licensees to fulfil the fiduciary duties owed to both of their clients. While regulation, by its nature, limits consumer choice, the restriction on dual agency is a reasonable limitation in order to ensure consumers are protected. Further, the results of the consultation do not demonstrate that the public is concerned with the limitations the rule would place on consumer choice as the majority of public respondents were in favour of the restriction on dual agency.”

A proposal that OSRE adopt transaction brokerage so that consumer choice is not limited was rejected. “Transaction brokerage provides no agency to both parties. While transaction brokerage addresses some of the conflicts of interest associated with dual agency, it reduces the range of services that licensees can provide and results in lesser consumer protections for all parties to a transaction,” says OSRE.

“The feedback received from licensees indicated a strong desire for education on the new rules, something strongly supported by both OSRE and the Real Estate Council of B.C. The superintendent will require licensees to complete education relating to the new rules and intends to publish a rule for feedback in the coming weeks to support this requirement,” says OSRE.

SIMILAR ARTICLES

  • Carolyne in Canada

    I predict, as a mid-range septuagenarian with nearly four decades of being registered/licenced, that possibly within the next decade the public will be listing and selling real estate using government employees assigned to “region number 000.” Paid “employees” not independent contractors by any description. The government will run CREA or disband it to protect the public and to prevent it from being a danger to the public and ourselves.

    For sellers, the term “mere listings” (the beginning of the elimination of the agent process) is the beginning of that process, and it was voted into play in the NFLD conference, by the BOR directors representing REALTORS(r) at large. You can’t put the genie back in the bottle. The horse has escaped the unlocked barn door and he is long gone.

    Eventually the mere listings will be “controlled,” in order to protect the consumer, the seriousness of a seller will be determined using a location grid format, perhaps governed and allocating a range of value (listing price) in which range the listing price will be allowed (following a predetermined algorithm), so as no one property owner can be permitted to make too much ‘tax-free’ profit building equity, perhaps using the property tax base as a value guide, only variable allowed, a tiny percentage allowed for superior location (predetermined by that grid). Age variable, type of construction, etcetera, already will be visible on the government form based on the predetermined grid. No need for questions: age, and other details appear automatically, who built it, when, even original price paid and each subsequent sale price so there will be no agent-interference; maybe even coming complete with a LRO report going back to day one for each property, maybe even Zillow-manufactured pricing or others the government would hire as robotic experts.

    Likewise buyers will have a governor in place preventing them from paying more than xyz amount, greater than the government-determined range of value, of course to prevent buyers from allowing themselves to be overburdened by mortgage debt in excess of that tax-based marriage of value as assessed with a small variable.

    I could go on, but we all know the definition of the police-state already in existence to protect us from ourselves. Soon perhaps we will only be permitted to see government-suggested doctors, take government-suggested medicines, and travel to a choice of government suggested list of vacation locations flying on government restricted choice of airlines, perhaps. There won’t be need for price haggling by consumers.

    Could be that families birth rates would be determined by a grid pattern and because cemeteries are often full and no more such land available, it’s possible some new way to bury will be created, disrespectful as that sounds. Life and death and everything in-between will be associated and monitored by government grids permissions status. No different than mortgage current qualifying or for buying a new vehicle, (you either quality according to the grid or you don’t, period; and the way CRA determines how much tax you owe based on assessment adjustments: forever that “grid-pattern” has already been in place for many years.

    Just a future thought grid patten perhaps to consider. With each of the current government interventions a little bit of self control and self governance will have gradually disappeared over time, slipping away, and no one was guarding the henhouse. All in the name of political correctness.

    Just a thought. It is said we can predict the future by looking at the past. The future of real estate is being established (we are creating the future-past “in the here and now.”)

    And no, it’s not science fiction. And 1984 is long gone past. It’s real life in the making of the moment. Some folks will create temporary work-arounds until a generation, maybe two dies off. The new up and coming generations don’t need information, they only need to know how to manage information, and how to issue commands, such as to Siri.

    When the power grid gets wiped out by whatever means, and you are riding in your driverless fully electric car needing juice, and the grid is not operative, how will you electrify (charge) it? It’s a long walk home via the highway, and with each vehicle owner in the same boat, don’t look to your neighbours to help, and of course you can’t call anyone, anyhow, since the towers can’t communicate.

    In the grand scheme of things it simply won’t matter. Not being negative; the up and coming generation already knows these things. The rest of us… Not so much, maybe.

    Carolyne L 🍁

  • Ahria

    Just as few follow the money overseas re. FINTRAC, just as many supposedly local buyers are really nonresidents behind the scenes, just as shadow flipping is still going on, so will dual agency continue with referrals paid under the table to other Realtors, those doing transactions for the listing agent. There will have to be quite a few working with one lister, but it will happen.

    Players play and money talks. It is a game that residents are losing to foreign investors who have so far managed to be the financial winners. Realtors used to being financial winners will also find a way.

    Or, since for sale by owners don’t have to follow the same rules, more will find a way that way with money from sellers paid under the table to Realtors who advise sellers on selling with the Realtors also bringing buyers.

    Let the most recent games begin in March. The rest of the games [resulting in most young actual residents being unable to buy (due to regular incomes, high rent, student debt, and other debt, so unable to save for down payments while many investing have cash from sources rarely sourced or are immigrants with money and without student debt, or family equity, etc.)] Shall continue unabated.

  • Brian Martindale

    This is what happens when the very vast majority of Realtors does not pay attention to what is going on within its sales culture, does not care about anything other than the next commission cheque, does not read REM regularly, does not concern itself with pursuing anything more than the bare minimum of ongoing education requirements, does not care enough about what the majority of the public thinks about them, does not heed the warnings of professionals within the culture, does not heed the warnings of commenters on REM about this issue (over the past five years or so) and too often crosses its fingers when conducting double-enders, hoping that neither opposing parties to the transactions find out what was or was not said or revealed that should have been said or revealed.
    Organized Real Estate has proven that it will not police itself scrupulously all the while there are big bucks to be made. Too much time and money has been spent by ORE on positive image campaigns, and not enough of same on producing high numbers of in-the-field professionals who reflect the image. Thus, the pending, more stringent entrance-to-the-club requirements by OREA are on the way by default. I have said it herein before, and I say it again now: If ORE does not clean up its act (read: its bad actors…all of them) then the government, for better or worse, will take a crack at doing it for them.
    I would advise you, the outraged Realtors who are only now making yourselves heard, to let this legislation play itself out and see what transpires over the next couple of years. Bucking the government now will only reveal to the government mindset that your skin-in-the-game-driven attitude (read conflict of interest) is precisely what needs to be dealt with from without the inward-looking real estate sales culture.
    Government, although not a perfect institution, ideally exists ‘not’ for the whims of special interest groups. Government, of the people, by the people, for the people, exists for the purpose of protecting its citizens from foreign invasion, for the purpose of protecting its citizens from criminal behavior, for the purpose of protecting its citizens’ property, for the purpose of the building up of and maintenance of infrastructure, and finally, it exists for the purpose of passing legislation designed to protect the public from unethical business practices. Some Realtors ‘can’ conduct dual agency ethically, but most cannot, and that is why government has intervened, and will continue to intervene. Laws are put in place to protect the masses, not to protect a very small minority of special interest group practitioners who want things to stay as they have been for over the last seventy-five years or more. The public is becoming savvy to the ways and means of dual agency, and the public interest is what counts most to conscientious government types.
    It is too late to successfully lobby the government against this move; the die is cast. Realtors who actually cared about this issue should have been lobbying their own in-house governance types to rid the business of the riff-raff that has led to this problem, but they did not do so. Too busy chasing commissions I suspect. The chickens have finally come home to roost.

    • PED

      Exactly right Brian! Good riddance and next up, Ontario.

      It’s a terrible practice where those screaming about the reversal of it now were undoubtedly quite happy to say and do nothing to rid the industry of dual agency abuse by the bad apples.

      If they’re any good at what they do, they’ll adjust after all lawyers had to.

      • Brian Martindale

        Thanks for your endorsement PED.
        I misspoke within my third last line, and I do not want to paint all caring/issue aware Realtors with the same brush. I said that “Realtors who actually cared about this issue should have been lobbying their own in-house governance types to rid the business of the riff-raff that has led to this problem, but they did not do so.” I should have clarified the conclusion of that statement with “…but enough of them did not successfully do so.”. A small change perhaps, but significant enough methinks.

  • Paul Shreenan

    IMPORTANT- PLEASE READ AND PM YOUR THOUGHTS TO BOARD AND ASSOCIATION DIRECTORS.
    This is, of course, an asinine decision, and all of us know how it came about so need to rehash that here, but I do want to say that there are more than a few of us who have been advocating organized real estate’s use of PR professionals and professional lobbyists at the Provincial and National level for the past 5 years and I can’t think of a better example than this of how critical this issue is.

    We regularly highlight the dangers of do-it-yourself to Buyers and Sellers who want to proceed without professional assistance and yet we leave what are easily ORE’s most important portfolios- GR and PR – to rank amateurs (our good-intentioned ORE volunteers). This is the result.

    For the love of God, anyone who is interested in this issue here PLEASE contact their local Board Directors and implore them to demand that BCREA engage the best PR and Lobbying consultants we can afford, and go on a determined offensive to have this decision reversed. I’m actually begging on this.

    We need realistic expectations: This won’t be reversed by March of 2018. But a strategic and coordinated, and above all PROFESSIONAL approach to killing this regulation can work. Other industries have battled and beat much tougher (and LEGITIMATELY publicly supported) regulation than this.

    If we have a plan to exploit and to publicize the many predictable and unpredictable ways this regulation will blow up in our customers’ faces we can beat this back, but it will never happen without proven professionals guiding us through that process.

    We’ve all seen CREA campaigns about the terrible consequences of our customers trying to do it themselves. THIS is our consequence.

    It’s time to call the pros.

  • Susan de Stein

    I was so glad to read that BCREA was “disappointed” with these changes. Are you kidding me? They are disappointed? If the BCREA is “disappointed”, very clearly they weren’t defending our interests very well at all. Perhaps the better words would be: Apoplectic. Stunned. Angry. Frustrated. Absolutely infuriated.

    We have limited time to work on how they think we can make this work: boards and associations have to tackle this the way the small business community tackled the ill conceived regulations on small business tax reform that came out from Ottawa. That lobby WORKED. Our representatives need to act now.

    Some key items that have me gasping for air:

    169 members of the public was the source of the “public opinion” piece of these, which helped the OSRE justify its actions. 169 people in total. We know NOTHING about them (age, education, number of transactions they’ve experienced etc etc). We do know that 15.5% come from Vancouver Island (I’m a Salt Spring Island realtor). That translates into 25 people in my “neighbourhood” determining public policy about an industry they know very little about.

    To base significant public policy on the age old cliche of consumer protection, on the basis of 169 people’s questionable knowledge of the industry? That’s absurd.

    It’s very clear to me and others that OSRE has no idea how the industry works outside of the large urban centres. My guess is that my market of Salt Spring (served by a handful of realtors – where the 80/20 rule is in effect) will not be “remote-enough” and so consumer choice is limited, realtors are penalized for being successful (and more importantly, not able to bring buyers to their sellers).

    What serious impacts do I see down the road? I can see that this will mean that many top realtors, especially in medium sized and smaller communities, will make the retirement decision, so you are going to see attrition from the senior ranks and most experienced ranks. This will be a loss for consumers.

    I see higher commissions. I guess that serves consumers well too? The additional bureaucracy, paperwork, effort has to be compensated.

    OSRE has taken a heavy blunt instrument to real estate regulation, when it was not called for, complicating the world for consumers and reducing THEIR choices. Yes it means a threat to our livelihoods, no question but how in the world does OSRE think it needed to address some exceptional issues created by a handful of rogue realtors in a hot Vancouver market.

    We have to do more than be “disappointed”. This is an over reaching change to industry regulation, guided by 169 members of the public that we know nothing about except roughly where they live (and that’s only broken down into 4 areas). At the very least, a change in public policy of this magnitude needs serious, scientific research.

    The OSRE research is not serious scientific research. It’s a seat-of-the-pants effort, almost done on the backside of an envelope. It’s laughable. For the OSRE to justify this change on the basis of a perceived need to protect the public, and a public consultation with 169 people is absolutely outrageous. We need to be protesting loudly – court challenge anyone?

  • Frank Heitzer

    This all is a bunch of horse poo poo…. For example, the 62 percent of the public were the entire amount of 82 people… The OSRE in its entirety is failing miserably and none of these ballerinas does listen to the real issues and things that should get addressed.
    This is a fishing expedition for political reasons, rather than addressing the real issues which would for sure need addressing ( i.e. language proficiency of agents, ongoing education enhancement, part time cab driver/realtor etc).