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FAQs about Real Estate Transactions

FAQs about Real Estate Transactions

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FAQs about Real Estate Transactions

We encourage public confidence by impartially setting and enforcing standards of conduct, education, competency and licensing for real estate professionals.

If you have questions that are not answered on this page, please contact one of our Practice Standards Advisors via email at [email protected], or call at (604) 660-3555.

Other useful information is located in BCFSA’s Consumers webpage, including information on buying a home, selling a home, and strata resources.

  • Use our online Find a Professional tool to check if an individual currently holds a valid B.C. real estate licence.

    You can find out whether a particular individual or company is licensed, the kind of real estate services they are licensed to provide, and their business contact information. Only information related to currently licensed individuals is available.

  • Because BCFSA is subject to privacy legislation, our investigations are confidential. BCFSA may not confirm or deny whether there may be an investigation underway into the actions of any individual professional or brokerage, or whether a complaint has been received concerning any professional or brokerage, unless and until a date has been set for a discipline hearing.

    We publish summaries of disciplinary hearing decisions and consent orders on our website.

  • Contact BCFSA to file a complaint if:

    • You have been involved in a trade in real estate in which you believe a real estate professional may have acted improperly; or
    • You have engaged a brokerage to provide you with rental or strata management services and believe that brokerage has acted improperly.

    Before contacting BCFSA, consider discussing your concerns with the professional you are working with. If the matter is not resolved, you can also contact the managing broker in charge of the real estate brokerage. Use the Find a Real Estate Professional feature on this website to find contact information.

    If you are not satisfied with the outcome after taking these steps, you should bring your concern to BCFSA. Complete a Complaint Form to send to us and attach all documentation as specified.

    Keep in mind that we are not empowered to resolve commission disputes, make monetary settlements or adjudicate contract matters. For more information, read Complaints or contact us and request a Complaints Package at (604) 660-3555, toll-free (866) 206-3030, or by email at [email protected].

  • A real estate brokerage holds deposits with respect to a trade in real estate as a stakeholder. The money is held for the purposes of the transaction, not on behalf of either party. Therefore, if for some reason the trade is not going to complete, the brokerage requires the signature of both the buyer and seller in order to release the deposit.

    If either of the parties will not agree to the release of the deposit, then they may have to apply to court to resolve the deposit issue.

  • The listing contract is a legally binding contract and you will have to get the agreement of the other party in order to cancel the obligations the contract has created.

    If you cannot get that agreement, you may need to seek legal advice.

  • Once accepted by the seller and buyer, a Contract of Purchase and Sale becomes a binding agreement that creates certain responsibilities that each party has agreed to accept and/or perform.

    If you are unable to fulfill these responsibilities, you should always obtain legal advice before taking any action that may place you in breach of a contract.

FAQs about Contract Assignments

In May 2016, provincial rules relating to the assignment of real estate contracts came into force. The provincial government amended the Real Estate Services Regulation, adding requirements that apply in all transactions where a real estate professional is acting for the seller and/or the prospective buyer of real estate.

To find out more about contract assignments and the effects of the regulations, check out the questions and answers in our FAQ below.

Whenever you are unsure about the actions of a professional, you can contact BCFSA to discuss your concerns. Get in touch with us.

  • A contract assignment occurs when a buyer transfers the contract to buy property to someone else before the completion date. The buyer can transfer the contract for any price, even for a higher price than they paid for the property.

  • Yes. Real estate contracts are assignable under the law unless the contract expressly forbids it. Section 36 of the Law and Equity Act provides that the seller’s consent to the assignment is not required, provided that notice in writing of the assignment is given to the seller.

  • The regulations that came into force in May 2016 are designed to protect sellers by preventing situations in which a buyer purchases a property, only to reassign the contract at a higher price before the closing date without the seller’s knowledge.

    The regulations require that standards terms be included by default in any offer to purchase real estate, unless the client instructs otherwise. These requirements are intended to protect sellers’ interests and deter potential real estate professional misconduct in relation to contract assignments.

  • Whenever real estate professionals are preparing a proposed contract for the purchase and sale of real estate (an “offer”), they must now include the following terms (the “Standard Assignment Terms”) unless their client instructs them otherwise:

    • This contract must not be assigned without the written consent of the seller; and
    • The seller is entitled to any profit resulting from an assignment of the contract by the buyer or any subsequent assignee.

    The standard Contract of Purchase and Sale that is used in most residential real estate transactions has been revised to include these terms and is available to real estate professionals.

    When a client instructs a real estate licensee not to include the Standard Assignment Terms in an offer, the professional must then take certain steps to ensure the seller is informed and consents. See the next two FAQ questions for more details on these steps.

  • If you have instructed your real estate professional not to include one or both of the Standard Assignment Terms, they must notify the seller’s licensee (or the seller, if the seller is unrepresented).

    The notice must be provided using BCFSA’s form entitled Notice to Seller Regarding Assignment Terms, which is now available on the Real Estate Forms page, under the subheading “Disclosure Forms”. The Notice to Seller Regarding Assignment Terms form must be provided to the seller or the seller’s real estate professional at the same time the offer is presented. The seller may choose to accept, reject, or counter your offer.

    If your real estate professional presents an offer to the sellers containing the Standard Assignment Terms, and it is accepted, this means that you can only assign the contract with the seller’s consent, and you must return any profit from the assignment to the seller. It does not prevent you from selling the property after the closing date of the transaction.

    The changes to the rules about assignments only apply to real estate transactions in which a real estate professional is acting for either sellers or buyers.

    For more information about real estate transactions, check out BCFSA’s online consumer guide to Buying a Home in BC.

  • If a real estate professional acting for a buyer presents an offer to you that does not include one or both of the Standard Assignment Terms, your real estate professional must:

    1. Provide you with the Notice to Seller Regarding Assignment Terms form and advise you that the offer is missing the Standard Assignment Term(s); and
    2. Inform you:
    • Whether the contract may be assigned, and
    • If the contract may be assigned, (1) about any conditions in the contract on the right of assignment of the contract, and (2) about your entitlement under the contract to any profit resulting from an assignment of the contract, if applicable.

    If a buyer’s real estate professional presents an offer that does include the Standard Assignment Terms, and you accept the offer, this means that if the buyer decides to assign the contract they must get your consent to the assignment, and they must pay you any profits from the assignment.

    The changes to the rules about assignments only apply to real estate transactions in which a real estate professional is acting for either sellers or buyers.

    For more information about real estate transactions, check out BCFSA’s online consumer guide, Selling a Home in BC.

  • The requirements will not impact a buyer who takes title to a property and then relists it or transfers title for a higher price. That scenario does not involve the assignment of a Contract of Purchase and Sale.

  • No. These requirements only apply to real estate transactions in which a real estate professional is acting for either sellers or buyers.

  • No. The requirements explicitly exempt contracts for the sale of a development unit by a developer, as those terms are defined in section 1 of the Real Estate Development Marketing Act. This means that if you are buying a condo in a new development, the contract assignment regulation will likely not apply.

  • BCFSA regularly inspects brokerages to ensure they have proper controls in place to protect trust monies and to test for compliance with the requirements of the Real Estate Services Act, the Real Estate Services Regulation, the Real Estate Services Rules and Regulatory Statements. The inspection includes a review of:

    • The brokerage’s books and records;
    • Required written disclosures; and
    • Service agreements entered into by the brokerage.

    All real estate professionals must submit copies of the Notice to Seller Regarding Assignment Terms form to their brokerage, and brokerages must retain copies of the forms. During a brokerage inspection, our auditors will review the forms to monitor compliance with the rules. If our auditors find evidence of non-compliance, we can initiate an investigation that may lead to professional discipline against a professional or brokerage.

    If you are ever unsure about the actions of a real estate professional representing you, contact BCFSA at [email protected] to discuss your concerns

FAQs about Consumer Protection in Real Estate Transactions

In B.C., licensed real estate professionals must:Give consumers information about commissions and fees;

Inform consumers of the duties and responsibilities owed to clients and unrepresented parties;

Inform unrepresented consumers of the risks of dealing with a real estate professional who is representing another party to the transaction;

Only work for either the buyer or the seller in a real estate transaction.

  • Yes. You may choose to be unrepresented rather than working with a licensee.

    Before making that decision, you should consider the risks of remaining unrepresented, and the potential benefits of having a real estate professional represent your interests in a trade in real estate.

  • Q: I want to look at a couple of homes with a licensee. But I am not sure if I want a client relationship or if I want to be an unrepresented buyer. Do I have to decide right away?

    It is up to you and the real estate professional you are working with to decide whether you wish to enter a client relationship. The real estate professional is not obliged to provide you with services (such as showing you homes) if you have not yet decided whether you wish to be their client.

In B.C., real estate professionals cannot represent two or more clients in the same transaction whose interests are in conflict, except in the rarest of circumstances. For example, a property seller and a prospective buyer for that property. Representing two clients whose interests are in conflict is called dual agency. The practice of dual agency was prohibited in B.C. in 2018.

  • The practice of dual agency raised a number of concerns for consumers, including that:

    • A real estate professional may not be able to be completely loyal and impartial to two clients with competing interests.
    • A real estate professional may not be able to properly advise those clients without improperly disclosing their confidential information to each other.
    • A real estate professional acting as a dual agent might prioritize his or her own interest in earning the whole commission, rather than acting in the best interest of his or her clients.

  • Q: I have been working with a real estate professional for six months trying to buy a home. I came across one of his listings, and I am interested in making an offer. I want him to represent me but he says he can’t, because dual agency is no longer allowed. Why can’t I work with him anymore?

    Real estate professional are no longer allowed to engage in dual agency, except in very specific circumstances. Your real estate professional cannot represent both you (the buyer) and the seller in the same transaction.

    However, you can choose a different real estate professional to represent you going forward. Your real estate professional can suggest names of other real estate professional who may be able to assist you.

FAQs about Strata Management

  • On January 1, 2006, strata management became an activity for which a real estate licence is required and the conduct of licensed strata managers became subject to the requirements of the Real Estate Services Act, over which BC Financial Services Authority has jurisdiction. However, the Strata Property Act, the legislation that governs the rights and obligations of strata corporations, strata councils and strata owners, remains a self-administered statute and there are no enforcement provisions for the Government of BC or the Real Estate Council. Under the Strata Property Act, it is up to the owners themselves, with the possible assistance of the courts or an arbitrator and/or mediator, to resolve disputes and ensure compliance with the provisions of the Strata Property Act.

    Strata managers act under the direction of the strata council of the strata corporation, by which they are engaged. It is the strata corporation as a whole that is the client of the strata manager, not the individual owners. Therefore, if individual strata owners have concerns about a strata manager, they are advised to first take their concerns to their strata council for resolution and any action the strata council may see fit to take. This may include the strata council submitting a complaint to BC Financial Services Authority with respect to the conduct of the strata manager if the strata council believes the strata manager has committed professional misconduct or conduct unbecoming a licensee under the Real Estate Services Act.

    In most cases, BC Financial Services Authority requires complaints regarding the performance of licensed strata managers to be submitted by strata councils, accompanied by a copy of the minutes of the strata council meeting that confirms the passing of a motion to submit such a complaint to BC Financial Services Authority. Notwithstanding the above policy, BC Financial Services Authority will on a case-by-case basis investigate a complaint by an individual if the individual provides sufficient evidence, or where the BC Financial Services Authority identifies during a preliminary enquiry, that the licensee may have committed professional misconduct as defined in the Real Estate Services Act.

  • Strata corporations may self-manage without being licensed. This self-management may be undertaken by strata lot owners within the strata corporation. Sections 2.1 and 2.18 of the Real Estate Services Regulation provide for exemptions from licensing for employees of the strata corporation, and for caretakers/managers employed by the strata corporation, respectively. The details of these exemption sections may be reviewed by viewing the Real Estate Services Regulation.

  • Section 43 of the Rules requires a brokerage wishing to provide strata management services to a strata corporation to enter into a written service agreement with that client unless the client does not wish to do so. If such an agreement is entered into, section 43 outlines a number of typical issues which must be addressed in that agreement. It does not dictate how those issues are to be addressed. That is a matter of negotiation between the parties.

    Some strata management brokerages may prefer to enter into a ‘standard’ agreement which has been created by a law firm on behalf of strata management associations, knowing that this agreement addresses the issues required to be addressed by section 43 of the Rules. However, strata corporations are at liberty to negotiate how any or all of the matters set out in section 43 are to be established. Strata corporations may wish to obtain independent legal advice with respect to the service agreement they are been asked to enter into.

  • No. As with other aspects of the services that a strata manager may provide, this is a matter of negotiation between the strata corporation and the brokerage. If a brokerage is to collect and hold funds on behalf of the strata corporation, those funds must be kept in a separate trust account in the name of the brokerage on behalf of the client e.g. ABC Strata Management Co. in trust for VR 12777. If the brokerage is to also collect and hold special levy and/or contingency reserve funds on behalf of the strata corporation, those funds must be held in at least one other separate trust account.