Oftentimes, it is difficult to determine precisely the legal obligations owed by an agent.
You have to be aware that real estate brokers and sales representatives are regulated under the Real Estate and Business Brokers Act, 2002.
This Act sets out the primary obligations in a real estate transaction. Vendors and purchasers fall into two distinct categories: clients and customers. In effect, there is an “A” list and a “B” list. Mostly, prospects are likely to choose the client category, since that raises the legal obligations. Infrequently, they will choose customer status.
So, what duties are owed?
With this type of question you must first determine the status of the two parties, that is, the seller and the buyer. Are they clients or are they customers?
Then, you need to determine which registrants owe which particular set of legal obligations to the parties. Here, the question relates to the number of brokerages, brokers and sales representatives and their relationship to the other party to the transaction and their relationship to one another. That is a separate discussion.
In summary, the legal obligations may be summarized as follows:
For Clients:
· Fiduciary duties at common law
· Public duties under REBBA
· Statutory duties under REBBA for “clients”
· Legal obligations of a specific nature
· Legal obligations of general nature
For Customers:
· Public duties under REBBA
· Statutory duties under REBBA for “customers”
· Legal obligations of a specific nature
· Legal obligations of general nature
You will notice that there are two differences in the legal obligations owed to clients and customers:
1) Clients are owed fiduciary duties at common law and customers are not.
2) REBBA sets out different obligations with respect to clients and customers.
Brian Madigan LL.B., Broker
Comments 2
Kindly, is there a legal or fiduciary violation if an Agent submits an offer on property (B), based upon the condition of sale of property (A), and there is no form 200 having been signed or executed by the Agent or the owners of property (A), authorizing the sale, the commission, or the asking price for property (A)? Further, is there any violations of the Act, or regulations, if Seller (A)’s realtor fails to have form 200 signed and execute, and then fails to provide form 200 to owner’s of property (A), upon request, and fails to indicate the fact that form 200 was never signed, or execute, and this delay takes three weeks? Is there a violation on behalf of the Agent if the Agent withdraws from the agreement to represent the client in a purchase, and then refuses to be transparent regarding form 200’s existence, and or the conditions of the Buyer’s Agent Agreement, form 200?
Author
It would seem so.