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Confidentiality Guidelines

Confidentiality Guidelines

Guidelines
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  • Guidelines

    BCFSA’s Guidelines provide a practical application of the information and give suggested best practice guidance to assist real estate professionals. These guidelines provide BCFSA’s interpretation of RESA and all other applicable legislation.

    In addition, BCFSA’s Guidelines may be a useful information source for the general public looking for information about standards of conduct for real estate professionals.

Purpose

Confidentiality is the only duty owed to a client that continues forever. This means that even after your agency relationship ends, you are prohibited from sharing or using information about your former client. Your brokerage’s agency model of providing designated or brokerage agency can also impact how confidential information is dealt with. This guideline will help you understand:

  1. How the duty of confidentiality applies to current clients.
  2. How the duty of confidentiality applies to past clients.
  3. How teams can impact confidentiality and your duties.

Guidelines

How the Duty of Confidentiality Applies to Current Clients

Ensuring your clients understand your professional obligation to maintain the confidentiality of their information is important and should be done at the onset of an agency relationship.

Your client must understand that the duty of confidentiality is ongoing; even after your agency relationship ends, you must protect and safeguard your clients’ information. Your client must understand how their information is going to be used and who will ultimately have access to it. You should also discuss with your client that they have ultimate control over modifying the duty of confidentiality owed to them and they can allow you to share information with other parties if they instruct you to do so.

(a) Confidentiality Under Designated Agency

When working under a designated agency model, maintaining client confidentiality can be complicated. Open office spaces, shared fax/copy machines, and communal computers and file storage can make inadvertent sharing of confidential information possible.

To protect your client’s information, phone conversations should be held in private, and any documents being faxed, or scanned to the brokerage should only be seen by you and not anyone else who may walk by. You should ensure that your brokerage files are only accessible by you, your managing broker and any brokerage staff who may be assisting with the transaction (such as conveyancers).

If you are part of a team, you and your team members are considered to be collectively the designated agent of your clients, and by working in this capacity you are able to freely share client information with each other. For that reason, when one team member takes on a new client, the confidential information of that client is assumed to be shared by all members of the team. To protect client information, the team should ensure that while each member may have access to the information, all other real estate professionals at the brokerage, who are not on the team, must not.

(b) Confidentiality Under Brokerage Agency

Under brokerage agency, all real estate professionals at the brokerage are able to freely access the confidential information of every brokerage client. Therefore, under brokerage agency, information can be stored in communal file cabinets and phone conversations may take place in front of other real estate professionals at the brokerage. However, maintaining confidentiality from all other real estate professionals not licensed with the brokerage is still required.

(c) Modification of Duties

The Real Estate Services Rules (“Rules”) allow any client to permit their real estate professional to modify the duties owed to them with consent. Modification of duties can even extend to confidentiality. If your client believes that sharing personal information would be of benefit to them, make sure they understand the implications of sharing their information, and get their permission to disclose the information in writing. This permission must be retained in your brokerage file.

You may also need to amend any service or representation agreements you have to reflect the changes in the duties owed. Please read the Information on Duties to Clients for more information on how to modify an agency relationship.

(d) Open Houses

During open houses, represented and unrepresented consumers will come to a property with a host of questions about the home, the current owners, and possibly the motivation of the current owners to sell the property. Providing any information about your client that you have not been authorized to share is a violation of their confidentiality and the Real Estate Services Rules.

If a consumer who is either unrepresented or represented by another real estate professional provides you with confidential information about themselves or their financial situation, the confidentiality rules do not apply to them as they are not your client and there is no agency relationship. The Real Estate Services Rules require you to act only in your client’s best interest and provide your client with all information that may be of value to them concerning another interested party.

How the Duty of Confidentiality Applies to Past Clients

(a) What to Do with Confidential Information After an Agency Relationship Ends

While the concept of maintaining a current client’s confidentiality during a transaction is understood, it is important to remember that confidentiality extends forever. Even when former clients enter into new agency relationships with other real estate professionals, your obligation to maintain their confidentiality continues.

Regardless of the type of brokerage model you operate under, your brokerage must ensure that information barriers are in place so that no information is shared. Your brokerage must also ensure that all files are maintained in accordance with the Real Estate Services Rules. You must ensure that you also keep your personal emails, voicemails, and text messages confidential.

In some instances, you may share confidential information when you are compelled to do so by BCFSA or when required by law. It is prudent to always note when and who has ordered you to release confidential information, as well as the circumstances surrounding the request.

(b) The Impacts of Former Clients on the Other Side of a Current Transaction

There are times where you may be representing a client in a real estate transaction and discover that the party on the other side of the transaction is a former client of yours. In that case, a conflict of interest arises because you have an obligation to provide your new client with all material information, but at the same time, any confidential information you have about the other party that you obtained through the course of your agency relationship, cannot be disclosed.

In such a situation, you must speak with your current client and disclose the conflict. Should the information you have about your previous client not be significant enough to negatively impact your ability to act in your current client’s best interest, your client may permit you to continue representing them. You and your client would then need to modify the agency relationship to reflect the changes in the obligations your client has agreed to. If, however, the information you have about your previous client is significant enough that withholding that information from your current client puts them at a significant disadvantage, you may need to advise your client to find new representation in order to ensure that you are acting in their best interests.

Please read the Regulatory Information on Duties to Clients for more information how to modify an agency relationship. You can also read more information on how the duty of confidentiality may create Conflicts of Interest.

How Teams Can Impact Confidentiality and Your Duties

Because real estate professionals who operate as part of a team work closely with their team members, they are deemed to share confidential information about their clients with each other. For this reason, when a team represents a client, all team member names must be listed on the service agreement so that the client is aware that each individual on the team will potentially have access to their personal information.

Because of this collaborative dynamic between team members, it can be difficult to acknowledge sharing client information on most transactions, but then allowing individual team members to operate as designated agents in another. Teams will often share file cabinets and have access to a shared email account. Should one team member attempt to represent a client as a designated agent outside of the team, there is a real risk of confidential information inadvertently being accessed by other team members. Because of this, prudent real estate professionals who work within a team dynamic will ensure that all transactions they facilitate are done as part of the team.

Learn more about agency relationships

Relevant Cases

Case #1: Maintaining Confidentiality of Former Client’s Information

The licensee had been representing a client (the “Seller”) with respect to the sale of a property. After the brokerage’s listing with the Seller expired, the licensee who had been representing the Seller disclosed information about the Seller’s property, discussing an appraisal and potential selling price as well as the motivation of the Seller, in the course of communicating with prospective buyers. The licensee was found to have failed to maintain the confidentiality of the Seller’s information.

Contravention: Section [Duty to maintain the confidentiality of information respecting the client] of the Real Estate Services Rules.

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Case #2: Disclosure of Confidential Information in an Affidavit Requested by One of Two Clients; Clients Engaged in Matrimonial Dispute; Managing Broker Failed to Properly Advise

The licensee represented a husband and wife who were selling property as a result of a matrimonial dispute.

The licensee stated that the husband did not want to look at an offer on the subject property and wanted the listing cancelled. The licensee claims that he was asked to remove his ‘For Sale’ sign from the property.

The wife asked the licensee to swear an affidavit setting out problems with respect to the sale in support of a court order to give the wife conduct of the sale of the property.

The licensee consulted with his managing broker, who advised that the information the licensee was providing was not confidential and the wife would have every right to know the information contained in the affidavit. The managing broker stated that in retrospect he should have advised the licensee to wait for a subpoena compelling him to give the evidence required by the court. The managing broker was found to have failed to ensure that the business of the brokerage was carried out competently and in accordance with RESA and its associated Real Estate Services Regulation (“Regulation”), Rules and Bylaws.

Contravention: Section [Managing broker responsibilities] of the Rules

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Case #3: Disclosure of Complaint by Individual Strata Lot Owner to All Owners Prior to Obtaining Direction From Strata Council

The licensee did not obtain direction from the strata council before responding to a complaint received from an individual strata lot owner. The licensee forwarded the complaint, and the name of the person placing the complaint, to all of the individual strata lot owners, and by doing so failed to maintain the confidentiality of the strata corporation.

Contraventions: Sections [Duty to act in accordance with the lawful instructions of the client] and 3-3(e) [Duty to maintain the confidentiality of information respecting the client] of the Rules, among others.

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Managing Broker Considerations

As a managing broker there are a number of steps you can take to ensure that brokerage client information is kept confidential. A brokerage needs to take reasonable steps to ensure the employees and real estate professionals engaged/employed by the brokerage are aware of and understand all information barrier policies (suggested below) and procedures adopted by the brokerage. A brokerage should also ensure their employees and real estate professionals acknowledge and agree to the brokerage’s information barrier policies and related procedures.

These policies will vary depending on the brokerage model (designated agency vs. brokerage agency) and you should ensure that clients of the brokerage understand how their personal information will be protected.

  • In preparing any information barrier policies and procedures brokerages might consider the following:

    • Sharing of information at office meetings;
    • Office layouts including physical separation of real estate professionals in an office;
    • Electronic and paper files including access, maintenance, and destruction;
    • Contents of bulletin or sales boards;
    • Use of support staff for multiple transactions from different real estate professionals;
    • Access to locked filing cabinets;
    • Use and privacy of computer passwords;
    • Telephone system including knowledge of voice mail passwords;
    • Email system including the privacy of email passwords;
    • Fax machines including the ability of anyone in the brokerage to read something off the fax machine;
    • Personnel at the brokerage with whom the client may safely communicate; and
    • After-sale relationships.

The above list is not meant to be exhaustive, and brokerages are encouraged to develop information barriers, policies, and procedures to address situations unique to their brokerage. You should also be aware of the requirements and obligations of the B.C. Personal Information Protection Act (PIPA).

Brokers should understand that real estate professionals are relieved from any duty of confidentiality when communicating with BCFSA or the Real Estate Errors and Omissions Insurance Corporation in regard to a complaint or claim.

Applicable Section of RESA/Real Estate Services Regulation/Real Estate Services Rules

  • Section 122, RESA, Information Sharing and Confidentiality
  • Section 30, Real Estate Services Rules, Duties to Clients
  • Section 31, Real Estate Services Rules, Modification of Duties
  • Section 34, Real Estate Services Rules, Duty to act with reasonable care and skill
  • Section 65, Real Estate Services Rules, Addressing Conflicts of Interest When Acting for Multiple Clients

Definitions

Designated agent: means one or more licensees designated by the licensee’s or licensees’ related brokerage as the exclusive licensee or licensees, of all of the licensees related to that brokerage, to provide real estate services to a client of the brokerage in respect of a trade in real estate.

Client: means, in relation to a licensee, the principal who has engaged the licensee to provide real estate services to or on behalf of the principal.