Agency Relationships Flashcards
What is a fiduciary?
A client representative
Under the standard of care, what should always notify your client of?
Things they do not know to ask about?
The possible consequences of their lawful instructions to you
The potential results of any decisions made
Any costs to the trade that they may not have anticipated
5 types of people licensees will often work with?
Clients
Customers
Real Estate Associates
Property Managers
Condominium Managers
Real Estate Associate
Holds the qualifications of a real estate associate
Licensed by relevant industry council
Employed by or associated with a licensed real estate brokerage in Alberta
Registered with and approved to trade in real estate on behalf of that brokerage
Three types of relationships real estate professionals can have with clients
Common Law: A real estate brokerage can act as the client’s agent.
Designated Agency: An individual real estate professional can act as the client’s agent.
Customer: Neither the real estate professional nor the brokerage owe them any type of fiduciary obligation
To whom does a real estate professional have a fiduciary obligation?
Clients that have entered into a written service agreement
Common Law Agency
A agency relationship between a brokerage and a client.
The brokerage, and all its associates are the clients agents, and can represent the client without additional contracts being signed
Information about the client is shared among all the brokerage’s associates
Designated Agency Relationship
The client enters into a service agreement with a brokerage, but, are represented only by a specific licensee or licensees.
Information about the client is confidential and not shared.
Customers
A real estate professional owes no fiduciary responsibility or obligation to a customer
The real estate brokerage or associate must share all information given to them by the customer, even if it is confidential, unless it was received while they were acting as the customer’s agent.
What do you agree to do when dealing with a customer vs a client?
Act honestly
Exercise reasonable care when they provide their services to a customer under the acknowledgement
Hold money they receive in trust, as required by the the Real Estate Act
Comply with the Real Estate Act and its regulations, and the rules and bylaws of the Real Estate Council of Alberta.
Give the customer a copy of the Customer Acknowledgment as soon as possible after signing.
What services can you provide to a customer?
Statistics and information on property
Agreements of purchase and sale and other relevant forms, and help them to complete the form
Names of real estate providers without recommending any specific providers
Presenting all offers and counter offers to and from a customer. Even if a seller may have accepted another purchase contract
Information from their client that they want the customer to know
Updated on the transaction progress
Can you offer advice or guidance to a customer
No, only factual information
Should a broker notify the Registrar when a trust account if opened or closed
Yes
Who can create and amend Rules of the Real Estate Act
The various Industry Councils with due care through industry consultation and stakeholder discussion
Can you discuss the pros and cons of a property with a customer?
No, you can’t offer your personal or professional opinion.
You can only discuss or relate to them the facts of the property.
Can brokerages employ unlicensed individuals?
Yes, to help with administrative tasks.
Can licensed associated trade real estate and carry out administrative tasks?
Yes, as long as their license is valid for the type of trade.
Perks or benefits used to attract new clients to a brokerage are called?
Incentives
Bonuses added to a deal to convince a specific client to close are called?
Inducements
Who can offer incentives?
The brokerage
Can a licensee advertise incentives of their own?
No, only incentives available to all clients and associates of the brokerage can be advertised.
Inducement
Any you offer or give to a person who is, or could be party to a real estate or mortgage transaction, to assist, persuade, or cause that person to enter into a particular real estate or mortgage transaction.
In other word, benefits or bonuses offered to convince someone to close a deal
Can a licensee offer a deal without informing their broker?
No, you must first receive written approval from your brokerage.
Can a real estate agent offer a reduced commission rate as a inducement?
No, inducements fall outside the service agreement.
The service agreement would have to be renegotiated if the licensee wants to offer a reduced commission