WHEREAS,
Section 12 of the Real Estate Act, confirms the Real Estate Council of Alberta (the “Council”) has the authority to make rules prescribing or adopting standards of conduct and business standards for industry members; and,
Council passed a motion on March 22, 2007 approving in principle the rules recommended by the Council Agency Task Force to facilitate the implementation of designated agency and transaction brokerage practices in Alberta.
THEREFORE BE IT RESOLVED THAT:
The Rules will be amended as follows:
1 (1) In these Rules,
(g.1) “confidential information” includes any information concerning the client including the client’s financial or personal situation, the client’s real estate and the transaction involving the client;
(i.1) “designated agency” means a relationship in which one or more industry members, licenced with the same brokerage, are designated in writing by the brokerage to act as sole agents for a buyer or a seller;
(i.2) “designated agent” means an individual industry member who is designated in writing by a brokerage to serve as sole agent for a buyer or a seller in a trade in real estate;
(i.3) “designated brokerage agreement” means a written service agreement between a brokerage and a buyer or a seller which sets out the terms and conditions under which one or more different individual industry members registered with the brokerage are designated as the sole agent of the seller or of the buyer, respectively;
(n.1) “facilitation services” means services by which the interests of the buyer and seller are met in an even handed, objective and impartial manner without providing confidential advice, advocating on behalf of either the buyer or seller, or using discretion or judgment that benefits the buyer or seller to the prejudice of the other, and will include:
(i) providing real estate statistics and information on property including comparable property information available through listing services or other local databases;
(ii) providing standard form agreements of purchase and sale, lease and other relevant documents;
(iii) preparing all necessary documents in accordance with the instructions of the client(s);
(iv) providing the names of real estate appraisers, mortgage brokers, surveyors, building inspectors, lenders, insurance agents, architects, engineers and the like, but will not recommend any particular professional to the client(s);
(v) presenting in a timely manner, all offers and counter-offers to and from the client(s) regardless of whether the property is already the subject of a contract;
(vi) conveying to the client(s) in a timely manner all information that either wishes to have communicated to the other;
(vii) keeping the client(s) informed regarding the progress of the transaction; and
(viii) complying with the provisions of the Real Estate Act and its regulations and the rules and bylaws of the Real Estate Council of Alberta
(gg.1) “transaction brokerage” means a relationship in which a brokerage or industry member provides facilitation services to the buyer and the seller in the same trade;
(gg.2) “transaction brokerage agreement” means a written service agreement between a brokerage and the buyer and the seller in a trade which sets out the terms and conditions under which the brokerage will provide facilitation services to the seller and the buyer in the same trade;
(gg.3) “transaction facilitator” is an industry member who has been engaged under a transaction brokerage agreement to provide facilitation services to the buyer and the seller in the same trade;
2. The following section will be inserted after section 58 and be effective March 1, 2008
Designated Agency
58.1 (1) The basic obligations of an industry member who is acting as a designated agent for a seller or a buyer are the same as for an industry member who is in a sole agency relationship with a seller or buyer, as the case may be, and include those obligations that are set out in sections 57 and 58 of the Rules respectively.
(2) If a situation arises where a brokerage enters into a designated brokerage agreement with a buyer or seller, as the case may be, the brokerage shall;
(a) establish policies and procedures to protect a client’s confidential information; and,
(b) establish policies and procedures governing the activities of the brokerage and designated agents registered with the brokerage; and,
(c) communicate to clients its policies and procedures that ensure that a designated agent does not communicate any information prejudicial to the interests of the client to other members of the brokerage, including other designated agents.
(3) All designated brokerage agreements must be in writing and must contain the following provisions:
(a) that the brokerage will designate an agent to serve as sole agent for the seller and will designate other industry members registered with the brokerage to serve as sole agents of any buyers also represented by the brokerage who are interested in the property;
(b) that if, for any reason, the designated agent ceases to be licensed with the brokerage, the brokerage will designate another member of the brokerage to serve as sole agent for the seller or the buyer, as the case may be;
(c) that the brokerage will not appoint another brokerage to act on behalf of the seller or the buyer, as the case may be, as a sub-agent without the seller’s or buyer’s prior written consent;
(d) that a seller or a buyer, as the case may be, agrees that an agency relationship will exist only with the designated agent and not with the brokerage;
(e) that a seller or a buyer, as the case may be, acknowledges that the brokerage’s responsibilities will be limited to:
(i)treating the interests of both a seller and a potential buyer of a property in an even-handed, objective manner;
(ii) ensuring compliance by the designated agent with the brokerage’s policies and procedures governing designated agents;
(iii) supervising the designated agent and support staff to ensure the designated agent fulfills its mandate under the agreement;
(f) that the brokerage and the designated agent undertake that they have not, and will not, disclose any confidential information concerning the seller or the buyer, as the case may be, to any other member of the brokerage or other person unless:
(i) authorized by the seller or the buyer, as the case may be; or,
(ii) required by law
(g) that a designated agent’s knowledge will not be attributed to the brokerage or any other designated agent of the brokerage;
(h) that the brokerage’s knowledge will not be attributed to any designated agents of thebrokerage.
3. The following section with respect to transaction facilitation replaces the current section 59 referring to dual agency with limitations effective October 1, 2008.
Transaction Facilitation
59 (1) If the situation arises where a brokerage represents a seller with whom it has an agency relationship and a buyer with whom it has an agency relationship is interested in the seller’s property, in order to facilitate the purchase and sale of the property, the buyer and the seller and the brokerage may enter into a written transaction brokerage agreement with respect to that property.
(2) The brokerage will provide both the buyer and seller with the opportunity to review the transaction brokerage agreement and to request further information concerning the transaction brokerage agreement and transaction brokerage relationship described in it before signing the agreement.
(3) If the parties do not agree to enter into a transaction brokerage agreement, the brokerage will continue to represent the party, be it the seller or the buyer, with whom it first entered into an agency relationship; and the brokerage will offer the option either:
(a) to treat the other party as a customer; or
(b) to recommend the other party to another brokerage.
(4) If the parties authorize the brokerage to enter into a transaction brokerage relationship, the brokerage agreement will indicate how the brokerage will be remunerated and provide that the brokerage now acting in the capacity of a transaction facilitator will:
(a) treat the interests of both the buyer and the seller in an even-handed, objective and impartial manner;
(b) exercise reasonable care and skill in the performance of its mandate under the agreement;
(c) obey the instructions of the buyer or the seller in so far as they are consistent with other terms of the agreement;
(d) perform for the buyer and the seller all necessary facilitation services, that is, services that do not require the exercise of discretion or judgment, or the giving of confidential advice or advocating on behalf of either the buyer or the seller, and, in particular, when requested by the buyer or the seller, the brokerage will:
(i)provide real estate statistics and information on property including all comparable property information available through the listing services or other local data bases;
(ii) provide agreements of purchase and sale, lease or other relevant documents and act as scribe in their preparation in accordance with the instructions of the buyer or the seller;
(iii) provide the names of real estate service providers, but the brokerage will not recommend any particular service provider to the buyer or the seller;
(iv) present in a timely manner, all offers and counter-offers to and from the buyer and seller regardless of whether the property is already the subject of a contract;
(v) convey to the buyer and the seller in a timely manner all information that either wishes to have communicated to the other; and
(vi) keep the buyer and seller fully informed regarding the progress on the transaction;
(e) disclose
(i) to the buyer, all material latent defects affecting the property known to the brokerage; and
(ii) to the seller, all material facts relevant to the buyer’s ability to purchase the property known to the brokerage;
(f) ensure that the industry member(s) registered vvith the brokerage providing services to the buyer and seller under the agreement:
(i) comply with the brokerage policies and procedures governing transaction brokerage; and
ii) treat the interests of both the buyer and the seller in an even-handed, objective and impartial manner;
(g) supervise the industry member(s) of the brokerage and support the staff members providing services to the buyer and seller to ensure that they properly fulfill the agreement;
(h) hold all monies received in accordance with the provisions of the Act.
(i) not give false or misleading information to the buyer or the seller;
(j) not disclose without the informed written consent of the buyer or seller, as the case may be:
(i) that the buyer may be prepared to offer a higher price or terms other than those contained in the offer to purchase or the exclusive buyer brokerage agreement;
(ii) that the seller may be prepared to accept a lower price or terms other than those contained in the offer to purchase or the exclusive seller brokerage agreement;
(iii) the motivation of the buyer or seller for wishing respectively to purchase or sell the property; and
(iv) subject to clause (4)(e) above, personal information relating to the buyer or the seller and other information disclosed at any time in confidence by either to the brokerage; and
(k) not conduct or influence the selection of:
(i) an independent inspection of the property for the buyer and will not verify the accuracy or completeness of any information supplied or statements made by the seller concerning the property; or
(ii) an independent inquiry into the financial status of the buyer for the seller and will not verify the accuracy or completeness of any financial information supplied by the buyer.
4. The following section with respect to transaction facilitation and designated agency be inserted after section 59 and be effective March 1, 2008:
Transaction Facilitation and Designated Agency
59.1(1) If the situation arises where a brokerage represents a seller with whom it has an agency relationship and a buyer with whom it has an agency relationship is interested in the seller’s property, in order to facilitate the purchase and sale of the property, the buyer and the seller and the brokerage may enter into a written transaction brokerage agreement with respect to that property.
(2) The brokerage will provide both the buyer and seller with the opportunity to review the transaction brokerage agreement and to request further information concerning the transaction brokerage agreement and transaction brokerage relationship described in it before signing the agreement.
(3) If the parties do not agree to enter into a transaction brokerage agreement, the brokerage will continue to represent the party, be it the buyer or the seller, with whom it first entered into an agency relationship; and the brokerage will offer the option either:
(a) to designate another member of the brokerage to represent the other party as sole agent; or
(b) to recommend the other party to another brokerage.
(4) If the parties authorize the brokerage to enter into a transaction brokerage relationship, the brokerage agreement will indicate how the brokerage will be remunerated and provide that:
(a) the brokerage will:
(i) ensure that the industry member(s) registered with the brokerage providing services to the buyer and seller under the agreement:
(A) comply with the brokerage policies and procedures governing transaction brokerage; and
(B) treat the interests of both the buyer and the seller in an evenhanded, objective and impartial manner;
(ii) supervise the industry member(s) of the brokerage and support the staff members providing services to the buyer and seller to ensure that they properly fulfill the agreement;
(iii) hold all monies received in accordance with the provisions off the Act.
(b)the designated agent now acting in the capacity of a transaction facilitator will:
(i) treat the interests of both the buyer and the seller in an even-handed, objective and impartial manner;
(ii) exercise reasonable care and skill in the peliormance of its mandate under the agreement;
(iii) obey the instructions of the buyer or the seller in so far as they are consistent with other terms of the agreement;
(iv) perform for the buyer and the seller all necessary facilitation services, that is, services that do not require the exercise of discretion or judgment, or the giving of confidential advice or advocating on behalf of either the buyer or the seller, and, in particular, when requested by the buyer or the seller, the brokerage will:
(A) provide real estate statistics and information on property including all comparable property information available through the listing services or other local data bases;
(B) provide agreements of purchase and sale, lease or other relevant documents and act as scribe in their preparation in accordance with the instructions of the buyer or the seller;
(C) provide the names of real estate service providers, but the brokerage will not recommend any particular service provider to the buyer or the seller;
(D) present in a timely manner, all offers and counter-offers to and from the buyer and seller regardless of whether the property is already the subject of a contract;
(E) convey to the buyer and the seller in a timely manner all information that either wishes to have communicated to the other; and
(F) keep the buyer and seller fully informed regarding the progress on the transaction;
(v)disclose
(A) to the buyer, all material latent defects affecting the property known to the brokerage; and
(B) to the seller, all material facts relevant to the buyer’s ability to purchase the property known to the brokerage;
(vi) not give false or misleading information to the buyer or the seller;
(vii)not disclose without the informed written consent of the buyer or seller, as the case may be:
(A) that the buyer may be prepared to offer a higher price or terms other than those contained in the offer to purchase or the exclusive buyer brokerage agreement;
(B) that the seller may be prepared to accept a lower price or terms other than those contained in the offer to purchase or the exclusive seller brokerage agreement;
(C) the motivation of the buyer or seller for wishing respectively to purchase or sell the property; and
(D) subject to clause 4(b)(v) above, personal information relating to the buyer or the seller and other information disclosed at any time in confidence by either to the brokerage; and
(viii) not conduct or influence the selection of:
(A) an independent inspection of the property for the buyer and will not verify the accuracy or completeness of any information supplied or statements made by theseller concerning the property; or
(B) an independent inquiry into the financial status of the buyer for the seller and will not verify the accuracy or completeness of any financial information supplied by the buyer.
5. Pursuant to section 32(1) of the Bylaws the following sections of the Rules are added to Schedule 1 Administrative Penalties in the Bylaws:
Section 60.1 (forms)
Section 58.1 (designated agency)
Section 59.1 (transaction brokerage with designated agency)
Section 59.2 (transaction brokerage with common law agency)
DATED at Calgary, Alberta on this 23 day of May 2007.
