A guide to the real world of real estate agency in New Brunswick, Canada.
Your Real Estate Agency Charter Of Rights
NEVER assume that a licensed Agent is acting on your behalf unless you have made the necessary arrangements for the Agent to be your Agent. And please understand that "Agent" includes all managers and salespersons licensed under the Agent. Factoid - The Code of Ethics and Standards of Business Practice used by the New Brunswick Real Estate Association requires disclosure of the Agency role at the earliest possible opportunity.
When buyers engage their own Agent, the Agent is obligated to obtain the property at the lowest price and best terms possible.
When sellers engage their own Agent, the Agent is obligated to obtain the property at the highest price and best terms possible.
There are around 100 agent licensees and roughly 800 licensed managers and salespersons employed by the Agent licensees. Licensed Real Estate Agents (through managers, salespersons and unlicensed staff they employ) provide real estate agency services to the Agent's clients. And frankly it is better for both the buyer(s) and the seller(s) in any transaction to have the opportunity to benefit from the full representation of their respective Agents.
Whether you are a buyer or seller, if you so choose, you have the right to the continuous advice, assistance, and undivided loyalty of your own Agent in your real estate dealings. It is your right to make all the business decisions including, especially, the terms upon which you engage an Agent directly or indirectly and precisely how, or even whether, you authorize your Agent to use a Multiple Listing Service®. For examples, you might choose not to offer unilateral sub-agency or you may choose to vary the commission offered to an agent when the agent is acting in double or dual agency.
Property finders/facilitators introduce prospective sellers and buyers who will communicate, negotiate, and contract directly with each other. Property finders/facilitators are not licensed by the Financial and Consumer Services Commission. They are not Real Estate Agents. They owe no loyalty or fiduciary duties to buyers or sellers of real estate. They cannot be relied upon for advice or assistance in negotiations. They are not legally responsible on matters respecting trading in real estate on behalf of others.
A Single Agent (Buyer's Agent or Seller's Agent) represents the buyer or seller in a fiduciary capacity. A Single Agent will represent a buyer or a seller, but never both in the same transaction. Sub-Agents are Agents of the Listing Agency employed by the Principal.
A Dual Agent may offer to represent both the Seller and the Buyer in a real estate transaction with the full knowledge and informed consent of both the Seller and the Buyer. Dual Agency Agreements often do not fully address conflicts in the duties of loyalty, obedience, disclosure and confidentiality. Read dual representation agreements carefully. And remember you have the right to seek independent professional advice BEFORE signing any dual agency agreement.
AGENT - FIDUCIARY
When acting as your Agent, a real estate Agent owes the following fiduciary duties to you, the Principal:
- Undivided Loyalty - which prohibits your Agent from advancing any interests adverse to yours or conducting your business to benefit him/herself or others.
- Obedience - which requires your Agent to act subject to your continuous control by not exceeding the scope of authority conferred by you and by obtaining and following your lawful instructions.
- Competence and Reasonable Care - which requires your Agent to: a) protect you from foreseeable risks of harm; b) exercise such care, skill, and competence necessary to ensure the transaction of your business to your best advantage; and c) recommend that you obtain expert advise or assistance when your needs are outside the scope of your Agent's expertise.
- Confidentiality - which prohibits your Agent from using or communicating information confidentially given to or acquired by him/her within the scope of employment as your Agent.
- Full Disclosure - which requires your agent to disclose affirmatively all information concerning the transaction of your business which might affect your best interest including, especially, information about any existing or proposed interests which might be adverse to yours. To be adequate, such disclosure must clearly and completely disclose all the facts including their real effect on your interests and it must occur early enough for you to be able to use the information to take steps to protect your own interests.
- Accountability - which requires your Agent to promptly report to you all money and property received and paid out and, upon request, to render an accounting and return all money and property lawfully belonging to you.
THE SPECIAL VALUE OF FIDUCIARY LOYALTY
A real estate Agent must:
- Put your best interests before all others including their own. It is this undivided loyalty that represents the extra value of a Single Agent services to consumers over the services of non-fiduciaries, including dual agents providing diminished or less than full representation.
- Not represent interests, adverse to you, in the same transaction in which they agreed to act as your Agent because of the inherent conflict in the obligations owed to the two parties. For example, a Single Agent must not represent the seller and the buyer or the landlord and the tenant in the same transaction. If your Agent is disloyal, (s)he could be required to forfeit compensation unless (s)he can prove that you freely gave your informed consent to such disloyalty. For your consent to be informed, your real estate Agent must show that full disclosure of the entire truth, including its effect on your best interests, in words that plainly explain any detriments of consenting to an agreement waiving your right to your Agent's undivided loyalty.
Copyright 2016 - Larry Estabrooks - All rights reserved
*The Consumer Affairs Division of the Financial and Consumer Services Commission is responsible for issuing Real Estate Licenses in New Brunswick. An Agent license is issued to the corporate body, partnership or individual who is legally responsible for contracts, financial accountability, advertising, sales representatives and other matters respecting the trading in real estate. (Real Estate Agents Act (R.S.N.B. 2011, c. 215))