Agency Disclosure was introduced as a part of the B.C. Real Estate Act
on January 1,1995.
Up to that point in time, the selling agent on a listed property
acted as a subagent of the Seller and the listing contract was the only place where agency
was referred to. This meant that the Buyer’s interests were legally unrepresented in
a property transaction as legally both the listing and selling realtor were working for
the Seller. This however did not jive with the perceptions of both the selling realtor and
the Buyer and the reality of their relationship. In many cases, the selling realtor did
not know the Seller and only ever dealt with the Buyer, yet had to work for the Seller not
the Buyer. This situation created some "ambivalence" in transactions and it
often came as a surprise to the Buyers that the realtor who had been showing them property
was actually deemed to be working for the Seller.
Since January 1, 1995, this problem has been addressed through
agency disclosure. The new agency rules more closely represent what the Buyers and Sellers
thought was happening in practice. The listing agent for a property represents the Seller
and the selling agent, working with the Buyer, represents the Buyer’s interests. What
this means is that the selling agent can now legally point out the shortcomings of any
property or neighborhood and can work to negotiate the best price for the Buyer.
The B.C. Real Estate Act also allows for dual agency situations
which occur whenever the Buyer is being represented by the listing agent or anyone from
the listing agent’s office. In this situation the agent(s) must step back to act with
fairness and impartiality to both parties (the Buyer and the Seller) in the transaction.
The agent(s) owes a duty of care to both the Buyer and Seller and must be careful not to
reveal confidential information from either party. In this situation both parties and the
realtor are required to sign a "Limited Dual Agency Agreement" in addition to
completing the Agency Disclosure section in the "Contract of Purchase and Sale"
form.
The Victoria Real Estate Board has a brochure entitled "Working
with a Real Estate Agent" which summarizes the agency relationships. I provide this
brochure to all my clients.
