I am writing in reference to the article Reflections on potential agency problems by Albert Teichner in your October edition. His article, and my comments, are primarily B.C. based.
Perhaps because of our west coast weather, the agency disclosure situation out here is, at best, muddy. Our Real Estate Act (Sec 36.1) requires that, BEFORE assisting or representing someone in a real estate transaction, a licensee must tell that person whether they are going to be acting as that persons’ agent, or simply assisting them. It isn't enough to just explain the various relationships, but to actually disclose what type of relationship they will have with that person. Regrettably, the act does not require that disclosure to be in writing. However, for their own protection I believe prudent licensees will obtain a written record of a timely disclosure.
Most licensees in B.C. rely on the BCREA brochure Working with a Real Estate Agent. This doesn't “disclose” a relationship, but merely “describes” various agency relationships. Out here we wait until the very end before we have to get around to obtaining a written disclosure. That disclosure is included in the Contract of Purchase and Sale. Apparently, licensees hope that the client or customer won't remember or realize that an actual disclosure had to have been made “before” they were assisted or represented. I haven't heard of any court cases as yet so it would seem luck is prevailing.
Mr. Teichner suggests many clients may be “entering into the agency relationship with their eyes wide shut”. I don't think many SELLER clients are confused but I do believe that many, if not most, BUYER clients are confused. Why is that? For one thing, sellers and the general public have known for years that real estate agents help owners sell property. Also, most licensees diligently sell their services to the owner ‑‑ and then, if successful, routinely require the owner to enter into a written agency contract. As a result, confusion is, at the least, minimized.
How many buyers of real estate (or any product or service for that matter) even think about hiring someone to help them buy a property (or product/service)? Also, how many licensees are as diligent in selling their services to buyers as they are with owners? How many require buyers to enter into a written agency contract -‑ like they do with prospective seller clients?
Why not? Well, for one thing buyer agency contracts are not, like exclusive seller agency contracts, mandatory. For another, many buyers may not want to enter into a contractual relationship with a particular licensee and, for a licensee to ask for “the order” may invite rejection.
For another, here in B.C., if the licensee is not under contract with the seller, the industry has declared that a prospective buyer is automatically a “client” of that licensee. They certainly don't do that with sellers.
These issues, and many more, were considered in a report issued by the Real Estate Foundation of B.C. in 1998. The committee that prepared that report included your star columnist, Marty Douglas. Two of the recommendations dealing with agency were: (1) “That legislation be enacted requiring all buyer agency contracts to be in writing” and (2) “That the MLS system discontinue the practice of the seller compensating the agent for the buyer…..”
Pat Moore RI(BC) Retired