Client - Real Estate Brokerage
Purpose: This bulletin explains who a client is and clarifies when you must disclose the nature of your services, relationships and conflicts.
This bulletin applies to real estate brokerages, brokers, associate brokers and associates.
Industry professionals are responsible to ensure their role is clear and understood and must not pressure or direct potential clients to a particular type of relationship.
Real estate professionals must clearly understand their obligations to a client or customer. Consumers should make an informed choice about the type of relationship and understand the implications of the choices available.
The Real Estate Act Rules (Rules) define a customer as:
“a person who has contacted, but not engaged or employed, an industry member to provide services”
A person starts out as a customer before they become a client. The person may decide they would like to engage the real estate professional to assist them with their real estate needs. Assuming the real estate professional agrees to assist this person with their real estate needs, the relationship changes and the customer becomes a client.
The Rules define a client as:
“a person who has entered into a service agreement with an industry member, whether or not that service agreement is in writing”
A client can be a seller, buyer, landlord, or tenant who engages a real estate professional to assist them with their real estate needs. The real estate professional must represent the client’s best interests at all times and assist them with the real estate transaction.
When to enter into a client relationship
Some customers will clearly communicate their desire to have the real estate professional represent them in a trade in real estate. Other customers will be less clear about their intentions and expectations.
They may make assumptions about their relationship with the real estate professional. Do not ignore this issue. A real estate professional must address this situation with a customer and clarify the nature of the relationship. Each case will be unique and the timing will vary.
Examples of when to clarify the relationship:
- during a discussion the customer begins to give you confidential information about their real estate needs, motivation, or financial qualifications
- following preliminary discussions with the property owner, the owner asks the real estate professional to view their property or they seek advice on issues such as market values in the area, a possible listing price, best time to sell their property, or the fees the brokerage will charge if they hire the brokerage
- following preliminary discussions with a potential buyer, the real estate professional arranges to show one or more properties the buyer customer wants to view
- after viewing a property, the customer asks for more information, to view the property a second time, or wants to make an offer
You must provide and review the Consumer Relationships Guide with all consumers. If you intend to represent or assist a person in a real estate transaction, you must discuss your potential relationship options with the consumer. Do not assume a consumer understands your role and responsibilities if they do not ask questions. An industry professional must explain their obligations and what services they will provide.
- Real Estate Act Rules - sections 1(1)(g), s.1(1)(i), s.43(1), s.55, s.57, s.58, s,58.1, s.59, s.59.1
- Client – Real Estate Brokerage
- Conflict – Buying a Client’s property
- Conflict – Representing Competing Buyers
- Conflict – Representing Buyer and Seller
- Customer – Real Estate Brokerage
- Ensure Role is Understood - Real Estate
- Transaction Brokerage – Not Always Appropriate
- Transaction Brokerage – Parties Do Not Agree
- Designated Agency and Transaction Brokerage Guide