It’s important to have a look at the Code of Ethics under the Real Estate and Business Brokers Act, 2002. Some sections apply to clients, some to customers and some to the public generally:
· Representation agreements are defined as well as the concept of a “material fact”.
· Fairness and honesty is owed to the public.
· Best interest is just for clients.
· Conscientious and competent service is owed to both clients and customers.
· Competence in providing opinions is owed to the public.
· A registrant may not communicate with the client of another registrant. And, the corollary, there is no regulatory impediment to communicating with the customer of another registrant.
· If services from third parties are to be recommended, that information shall be provided to both clients and customers.
· Service alternatives are to be explained to any member of the public who is to become a prospective buyer or seller. This would include advising that all clients must consent to multiple representation should such be permitted, the change in services should multiple representation be authorized, the fact that there could be a client and one or more customers, and the restricted customer service model should the registrant have a client in the same trade.
· The registrant is to seek to obtain confirmation from the public, customers and clients that they have received the information noted above.
· The Act documents the commission agreement contents for clients, customers and the public (in the capacity of either a prospective buyer or seller).
· There is an obligation to provide copies of agreements to clients, customers and the public (in the capacity of either a prospective buyer or seller).
· Seller representation agreements are to be reduced to writing.
· Buyer representation agreements are to be reduced to writing.
· Customer service contracts are to be reduced to writing.
· Disclosure is required before multiple representation. This obligation is owed to clients, customers and the public (in the capacity of either a prospective buyer or seller).
· Similarly, disclosure is required before customer services are to be provided to more than one customer. This obligation is owed to clients, customers and the public (in the capacity of either a prospective buyer or seller).
· A registrant who has a personal interest (or a related party) must disclose this matter to clients and customers.
· A registrant must disclose third party financial incentives or payments to clients. No similar obligation arises in respect to customers.
· A registrant who proposes to charge a commission to two parties in one trade must disclose that fact to both parties, whether they be clients, customers or prospective buyers or sellers.
· Registrants are obligated to show client buyers all properties which meet their selected criteria. The same obligation does not arise with customers.
· A registrant who has a seller client must disclose the existence of any SPIS and make if available upon request to any prospective buyer (still a member of the public).
· A registrant shall take reasonable steps to determine and disclose material facts to clients.
· A registrant shall disclose material facts that are known or which ought to be known to customers.
· A registrant is limited under the Act in respect to the authority to enter into contracts on behalf of the client with third parties. A registrant with a customer has no such authority (restricted or otherwise).
· A registrant is to keep the client informed concerning the significant steps in the matter.
· Registrants are to convey offers to clients and to customers who have agreed that the registrant is to have such authority.
· Special commission agreements may have to be disclosed to the public in the capacity of a prospective buyer where the registrant has a client, or a customer.
· Competing offers may have to be disclosed to the public in the capacity of a prospective buyer where the registrant has a client, or a customer.
· Written and legible agreements are to be provided to both clients and customers.
· Copies of agreements of purchase and sale are to be conveyed to third parties on behalf of both clients and customers.
· Deposits and documents are to be delivered on behalf of both clients and customers.
· A registrant must produce upon the request of any person (clients, customers and the public) their certificate of registration.
· A registrant shall use current forms. This duty is owed to clients, customers and the public.
· A registrant shall act with financial responsibility. This duty is owed to clients, customers and the public.
· A registrant shall not make inaccurate representations. This duty is owed to clients, customers and the public.
· A registrant shall avoid and prevent fraud, error, and unethical practice. This duty is owed to clients, customers and the public.
· A registrant shall not engage in unprofessional conduct. This duty is owed to clients, customers and the public.
· A registrant shall not abuse or harass any person. This duty is owed to clients, customers and the public.
· There are also some obligations set out in the General Regulation.
· Copies of agreements are to be delivered to the brokerage on behalf of the clients and customers. This is broad enough to include listings, representation agreements, service agreements and agreements of purchase and sale. Oddly, offers are omitted.
· Registrants must seek the permission of all other clients should they wish to represent another client in the same trade.
Brian Madigan LL.B., Broker