By Marty Douglas

In 1987 I was fortunate enough to attend the FIABCI World Conference in Copenhagen.  Just in case your real estate acronyms are out-of-date like your FINTRAC manual, FIABCI stands for six words in French I can never remember but which, in English, translate to International Real Estate Federation, a group of over 100 national real estate associations. As CREA is to your board, FIABCI is to CREA – a large, mysterious organization we indirectly pay for.

At that long-ago conference, one of the keynote speakers – Gandalf the Grey perhaps – suggested the future of real estate would benefit greatly from divorce and the resulting new household formations.

I was 42 and my personal “household reformation” was far in the future and so the concept was hazy to say the least. However, looking back I acknowledge the speaker may have been one of the few demographic futurists who got something bang on. To be fair, I suppose if you look at the large clump in the population tree we refer to as baby boomers, it’s not too hard to suggest we – yes I’m a suspect – will do more than other generations of any single activity (weight loss, fitness and adultery – to name two warning signs connected to an original sin!), which explains the current demand for Viagra, Depends and Rolling Stones tours. Hell, even Barry Manilow is on the road. But I digress.



It’s not unusual – Tom Jones anyone? – for couples who decide to separate, to call their Realtor to assist in dividing the inseparable joint tenancy, the home once filled with so many memories and now containing nothing but fear and loathing.  For many, I’m sure, the journey concludes without a hiccup. A buyer is found quickly, a price is agreed upon and the once-happy couple get separate cheques from their attorneys.

But then there’s the real world, the world of bitter recriminations following an affair, substance abuse or debt or violence.  In these circumstances one partner extends their rejection of the other to any salesperson their ex might select.  The result is a co-listing, with one or two brokerages.

Which brings us to agency!

How do you serve a seller comprised of two parties who, in contract and on title, are inseparable? Agency demands the agent be a pipeline of communication, not a filter.  When one spouse tells their agent, “I’ve got a new ‘friend’ and we need to sell quickly so we can get on with our lives – but don’t tell my spouse,” what are the agent’s duties?

Consider this excerpt from the Real Estate Council of B.C.’s June 2014 newsletter, reprinted with permission.

“Linda Licensee* at XYZ Realty Ltd. was approached by two past clients, Tom and Trixie, to list their family home for sale. Tom and Trixie were getting a divorce, but they explained to Linda that their relationship was amicable and they were in agreement about selling the property. The listed price was a little on the high side, but they weren’t in a rush. Despite the circumstances, Linda was delighted to represent Tom and Trixie.

“A few days after the listing agreement was signed, Linda called to make the first appointment to show the property. Tom answered and informed her that since Trixie had moved out with her new boyfriend, he no longer wanted to sell the property. He declined Linda’s request for a showing, demanded that she cancel the listing and announced that he was leaving for Hawaii and wouldn’t be in communication at all for several weeks. He then instructed Linda not to tell Trixie anything about his desire to cancel the listing or his planned trip to Hawaii.

“Somewhat taken aback, Linda called Trixie at work, described her conversation with Tom and asked Trixie what she should do. Trixie told her not to worry, she’d calm Tom down. She told Linda to continue marketing the property and asked her to prepare a price reduction and email it to her at work to sign, because she had decided to get the property sold as soon as possible. Trixie directed Linda not to tell Tom of her instructions. She would fill him in when she met with Tom to calm him down.

“Linda complied; the price reduction was signed by Trixie and broker-loaded to MLS. The new price attracted a lot of interest and the next day Linda called the house again to make appointments to show the property. Tom answered the phone. He was outraged.

“He told Linda he had filed a complaint with the Real Estate Council because she hadn’t acted in accordance with his instructions; she had failed to maintain the confidentiality of his information; she had reduced the price of the property without his authorization; and she had failed to act in his best interest, preferring the interests of Trixie over his. His lawyer was commencing proceedings against Linda for failing in her duties to him as a client.

“After alerting her managing broker and advising the Real Estate Errors & Omissions Insurance Corporation of the potential legal proceedings, Linda sat down to reflect on what she could have done to avoid this unfortunate turn of events.”

First thing – change your name! (By the way, * means not her real name, nor is there an XYZ Realty Ltd.)

We get paid the big bucks to do the right things and understanding agency and fiduciary duties is the highest standard to which we are held. We are expected to know what to do.  Consider this paragraph from the same article:

“When the designated agent is comprised of more than one licensee, all of those licensees owe fiduciary duties to the client. When two licensees co-list a matrimonial home owned jointly by spouses, each licensee owes fiduciary duties to both spouses. In these cases, the spouses may wish to modify the fiduciary duties of their designated agent through a written agreement, specifying that each licensee will owe fiduciary duties to one of the spouses but not both.”

Modify?  How? With what words?  How do we handle disputes?  Who speaks for the sellers? Yes, the parties may have lawyers and a separation agreement but did they consider selection of and instructions to the listing salesperson in the wording? Will the sellers go back to their lawyers to ask for instruction specific to confidentiality and disclosure? More likely they will turn to their agents to cobble a solution. Reluctant to admit they don’t know how to cobble this particular shoe to fit, they invent. In the field, licensees do their best, managers assess the results, civil courts, real estate councils and insurance companies poke and prod the entrails.

Get it in writing and act accordingly.

Be careful out there!

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6 COMMENTS

  1. In response Nora …

    Marty, with permission, reprinted this from the Council newsletter:
    [“] “When the designated agent is comprised of more than one licensee, all of those licensees owe fiduciary duties to the client. When two licensees co-list a matrimonial home owned jointly by spouses, each licensee owes fiduciary duties to both spouses. In these cases, the spouses may wish to modify the fiduciary duties of their designated agent through a written agreement, specifying that each licensee will owe fiduciary duties to one of the spouses but not both.”[“]

    Re-read Marty’s subsequent paragraph, Nora. “When two licensees…” [if they are at the same brokerage?]

    Waiting for someone to speak to Marty’s question(s)… “HOW to modify?” Marty asks.

    If the Council newsletter writing is correctly quoted, Nora – it sounds like the Council writer suggests that apportionments of fiduciary duty can be contracted out of??? [Within one brokerage?] In B.C. ? Really?

    Guessing … Perhaps the answer would be, in fact, for each of the parties on title to hire their own separate brokerage representation. At risk of having to pay two companies’ commission…

    But there’s always the possibility that only one of the spouses’ names is officially on title – then of course the spousal matrimonial home rights surface. Begs another question.

    That topic must be identified and dealt with at the time of listing the property & begs the question: should the matrimonial ownership (signatures) question be required on all related forms? [Line for – is this a matrimonial home?]

    Amendments to any and all paperwork? Better too many signatures than not enough?

    In addition to my initial comment, Nora… I insisted that I meet with each of the parties, either together or separately, in a somewhat public environment.

    Absolutely, I insisted, and a must do if they were hostile and one had already vacated the matrimonial home. Safety first, for everyone involved.

    Participants often are often on better behaviour in a public venue. Our local hotel had a nice private area, and because many of my corporate clients stayed there from time to time, I was known to the front desk.

    Far less threatening environment to the clients than even an office meet-up where reception would guide them to a formal boardroom. Hotel was casual but businesslike atmosphere.

    Many of my clients thanked me profusely for implementing this method of meeting that seemed to keep spouses at arm’s length physically, while at the same time keeping house-memories at bay.

    It worked for me. In a sometimes out of control situation, I would simply provide paperwork to the requisite legal office appointed by the owner(s), and meet there or stay in the background, if that was my clients’ preference.

    I developed my pattern of handling following a scheduled offer presentation meet-up, where I entered the listed property to find Mr. Owner sitting on the kitchen floor, with legs crossed surrounded by many knives. Fortunately I could see this as I entered the open front door with kitchen in full view. No panic. Hand still on door handle.

    But EXIT!!! Turned and left. We’re talking pre cell phone days. Brain said: “We WON’T do this AGAIN.”

    Carolyne L

    • Nora – that “knife incident” was in 1982. There had been no training as to the maybe’s of such an encounter. I was 40 years old and would not have guessed. Their divorce lawyer had referred them to me. He soon became a well-known judge, so couldn’t do referrals.

      And, the 50 divorce questions article – well, I wrote that eighteen years ago. Don’t know where the time has flown.

      Carolyne L

  2. Good article and one that exemplifies why the structure and business practices of the Brokerage must be constantly controlled by the Broker Owner.

    Clearly the listing agent lacked the experience or education to understand first the risk that existed and then the procedures that needed to be followed so all parties were satisfied under the law.

    In this case the full responsibility falls on the Broker Owner who allowed a member of their firm to go out in public and deal with a situation where the member lacked adequate training. In Ontario this in itself is a breach of provincial trading legislation, handling something you clearly lack the knowledge to adequately handle.

    Real estate sales is not listing a home, getting 5 bidding offers and a quick 24 hour commission. That is the gravy that in itself posses serious financial risk in 2015. Real estate sales that meets provincial trading legislation, civil court decisions and CREA code of ethics is a very very challenging world to navigate. Something over 70% of registrants are not qualified to do alone.

  3. The article seems to have me as a target, I am in the midst of this exact situation; closing is in 24 hours (May 27/15). The roller coaster ride through a myriad of emotions and improbable circumstances has given a new perspective on my career which started in 1983.
    My advice…do not allow an additional agent (certainly not a team) to infiltrate the process. The additional opinions which will invariably creep up, and the methods of how to cope with situations no one can predict will clutter up any decision making process. Secondly, treat the agency as dual, and let the solicitors fight it out. After all it is a legal path that you will be in the midst of, and unless you are a family law specialist, an accountant/book keeper, and professional mediator you are in for a colorful experience.
    You are going to receive everything you can possibly imagine; praise, rejection, criticism, doubt, claims of receiving far too much compensation, corollary claims of not being paid enough…you know, the stuff we get on a daily basis.

  4. Hello Marty:

    Excellent post. As to the prognostication at the FIABCI in Copenhagen – another brain reserve one worth noting is Faith Popcorn’s. Back in the 90’s she was way far ahead of her time.

    I did some of my very best and most satisfying and mentally rewarding work helping people through this tragic time. And was handsomely acknowledged by parties to both sides. Their end comments were more satisfying than money could ever buy.

    The most valuable advice I could give to any sales rep: “Keep your mouth SHUT!!!”

    A rep has absolutely no right to a personal opinion. To quote Tom Peters: “Stick to the knitting.”

    To do otherwise – the one hurt the most in the whole goings-on will be the rep, as you pointed out.

    This sort of representation perhaps is the most demanding you might encounter in your career. Guard your mouth. Completely, entirely. Yes, show compassion, but absolutely do not take sides. Absolutely do not ‘befriend’ either side. Never fail to remember you have “been hired – under contract – to do a job.” You are duty bound to fulfill THAT obligation.

    If you do not have the skills to function at that level, the best thing you can do is to not accept the contract. You will be required AT ALL times during that contract to remind yourself that your ONLY requirement is “to represent.” You are not hired to make or take decisions on behalf of the property owners. Don’t even consider getting involved on a personal level. In addition: mind your manners. Be gracious, kind, caring, and go about business accordingly.

    Getting Divorced? – a list of a 50 questions you need to consider
    (and – Should you Sell the house? or Buy out your Spouse?)

    http://www.carolyne.com/divorce.html

    And perhaps visit the additional subject related link at the bottom of my article.

    Carolyne L

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