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Duty to Report

Duty to Report

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As a real estate professional, you have a crucial role to play in ensuring that the public interest is protected in real estate transactions. Whenever you believe that consumers are at risk from another real estate professional’s actions, you have a duty to promptly report the conduct to your managing broker, who can bring it to the attention of BCFSA.

When you have concerns about the conduct of another real estate professional or an unlicensed brokerage employee or individual, always discuss the matter with your managing broker, who should ensure it is brought to BCFSA’s attention. Ignoring potential misconduct when you observe it puts the public, and the reputation of the real estate profession, at risk.

This FAQ is designed to assist you in determining the action you should take in situations where you feel another real estate professional’s conduct should be reported.

  • Real estate professionals have a legislated duty to report potential misconduct.

    Section 29(5) of the Real Estate Services Rules (“Rules”) states:

    Knowledge of improper conduct – An associate broker or representative must promptly notify the managing broker on learning of conduct that the associate broker or representative considers may be conduct referred to in section 28(2) [managing broker responsibilities] of these rules, whether that conduct is

    (a) the licensee’s own conduct,
    (b) the conduct of an employee of the licensee or of another person who performs duties on the licensee’s behalf, or
    (c) the conduct of any other person in relation to which the managing broker has responsibility under section 28(2) of these rules.

    Managing brokers must act on information about misconduct provided to them by licensees. Section 28(2) of the Rules states:

    If the managing broker has knowledge of conduct that the managing broker considers

    (a) may constitute professional misconduct, or conduct unbecoming a licensee, on the part of a related licensee, or
    (b) may be improper or negligent conduct, in relation to the provision of real estate services, on the part of
    (i) a related licensee, or
    (ii) an employee of the brokerage or any other person associated with the brokerage,

    the managing broker must take reasonable steps to deal with the matter.

  • If you are aware of a real estate professional who has misappropriated a client’s money, who is attempting to defraud a client, or is otherwise participating in very serious violations of the Real Estate Services Act, you have a duty to report such behaviour immediately. Whenever you have reason to believe that another real estate professional’s conduct presents a danger to their clients or to the public interest, you should inform your managing broker, who should ensure your concerns are brought to BCFSA’s attention. This also applies to potential misconduct by unlicensed individuals or unlicensed employees at brokerages.

    Examples of matters that are of immediate concern to BCFSA include:

    • Deceptive dealing;
    • Misappropriation of funds;
    • Unauthorized signing of documents;
    • Secret commissions; and
    • Unlicensed real estate activity.

    It is not only serious real estate professional misconduct that must be reported. Any conduct that you believe may constitute professional misconduct, conduct unbecoming, or improper or negligent conduct must be reported to your managing brokers. When real estate professionals who are not following the established standards of professional conduct are checked at an early stage, future loss or harm to clients can be prevented. In some cases, when BCFSA investigates what appear to be minor breaches, more serious situations are discovered. That is why it is important to bring any concerns about potential misconduct to the attention of your managing broker and BCFSA.

    If you are in doubt about whether you should report another real estate professional’s conduct, read “What should I do if I’m not sure whether another real estate professional’s actions are misconduct?” below. If needed, ask your managing broker for advice. You and your managing broker may wish to consult one of BCFSA’s Practice Standards Advisors for further guidance about conduct you have observed and the requirements for real estate professionals:

    Email: [email protected]
    Phone: (866) 206-3030

  • STEP 1:

    Contact your managing broker. Explain the situation, the potential misconduct you have become aware of, and clearly outline any risks you believe the conduct may present to consumers.

    STEP 2:

    If the real estate professional is engaged at your brokerage, the managing broker should speak with them directly. If the individual(s) are engaged at another brokerage, the managing broker should contact the managing broker at the other brokerage to discuss the conduct, the risks presented by the conduct, and the steps that should be taken to resolve the situation.

    Consult with a BCFSA Practice Standards Advisor if you are worried that a client’s interests might be placed at risk by a reporting delay.

    STEP 3:

    When a managing broker has reason to believe that a real estate professional has breached the conduct requirements in the legislation and put the public at risk, they must contact BCFSA and be prepared to support their report with specifics. Include a description of the conduct, and attach any relevant evidence or documentation, such as:

    • Contract of Purchase and Sale and addenda;
    • Listing information;
    • Listing agreement or other service agreement;
    • Relevant correspondence with the licensee;
    • Agency disclosure forms;
    • Documents relating to a rental or strata property management transaction/agreement; and/or
    • Property Disclosure Statement.

    STEP 4:

    When BCFSA receives the information submitted by the managing broker, we will open an investigation file and assess the evidence to determine if BCFSA has jurisdiction in the matter. An Investigator will contact the licensee and/or the managing broker to discuss the matter and review the evidence submitted.

  • Yes. However, if you choose to make an anonymous report to BCFSA, you must still provide sufficient information for BCFSA to begin an investigation.

  • When another real estate professional’s actions “feel wrong”, yet you’re not sure whether they constitute misconduct under the Real Estate Services Act, ask yourself the following questions:

    • Have a consumer’s interests been harmed by the real estate professional’s actions?
    • Does it seem likely that someone’s interests may be harmed in the future by the real estate professional’s actions?
    • Does the real estate professional stand to benefit as a result of their actions, and this has not been adequately disclosed to the client?
    • Does the real estate professional seem unaware or unwilling to correct their actions?

    If the answers to any of these questions is “yes,” you should share your concerns with your managing broker. If the real estate professional is engaged at the same brokerage, the managing broker should discuss the matter directly with the licensee. If the real estate professional is engaged at a different brokerage, your managing broker should contact their managing broker to try to resolve the situation.

    Depending on the severity of the conduct and the risk to the consumer, your managing broker may decide to take the concerns you have reported directly to BCFSA.

    If you and your managing broker have questions about the conduct you have observed, contact a BCFSA Practice Standards Advisor for a consultation: [email protected] | (866) 206-3030