DUTIES TO THIRD PARTIES

Section 35(2) of RESA (Conduct Unbecoming a Licensee)

includes conduct that is contrary to the best interests of the public, conduct that undermines public confidence in the real estate industry, and conduct that brings the real estate industry into disrepute.

Sections 33 and 34 of the Rules

-a licensee must act honestly (section 33) and with reasonable care and skill (section 34). For example, whatever information you provide to a non-client should be truthful and should reflect reasonable diligence (careful and detailed work)

-Disclosure requirements imposed under the Rules to non-clients, particularly unrepresented non-clients,

DISCLOSURE

-adequate transparency is essential in order for licensees to be seen as honest and ethical professionals

-As a general rule, ethical and transparent disclosure requires early, continuous, and full written disclosure.

THE DUTY TO REPORT MISCONDUCT

-Not only must licensees be accountable for their own actions, but they must also make other licensees accountable for their actions.

-Licensees have a role in enforcing the values of the profession.

-Those who knowingly act unprofessionally will be less likely to do so if they know that their fellow professionals will not tolerate it.

-while professionals may primarily serve their clients, they owe a broader duty to society at large.

The Role of Licensees in Maintaining Professionalism

The Duty to Report in RESA and the Rules

RESA: a failure to report misconduct of a serious nature could result in a finding of conduct unbecoming a licensee against the licensee who failed to report.

Section 29 of the Rules: states that they must promptly notify their managing broker on learning of conduct that they consider may be:

• professional misconduct;

• conduct unbecoming a licensee; or

• improper or negligent conduct.

-applies to any misconduct within a licensee’s brokerage and requires representatives and associate brokers to report the misconduct to their managing broker.

The Duty to Report as an Ethical Duty

-no explicit duty in the Rules for licensees to report the misconduct of those outside of their brokerage.

-licensees have a broader ethical duty to report the misconduct of any licensee, whether they are a member of their brokerage or not.

-Under this ethical duty, licensees have a responsibility to report the conduct of any licensee:

• that they believe might constitute professional misconduct, conduct unbecoming a licensee, or improper or negligent conduct; or

• that presents a danger to that licensee’s clients or to the public interest.

-also applies to potential misconduct by unlicensed employees at brokerage

Where to Report Misconduct

-In most cases, reports of misconduct should be directed to one’s managing broker.

-Under RESA, managing brokers are responsible for exercising the rights, and performing the duties, of the brokerage, and for the control and conduct of the brokerage’s real estate business.

-does not preclude or prevent the licensee from reporting misconduct directly to BCFSA.

-Direct reporting to BCFSA may be necessary if:

• another licensee’s conduct presents such a great risk to the public that immediate action by BCFSA is necessary (e.g., a licensee has misappropriated, or stolen, a client’s money); or

• the licensee’s managing broker is not immediately available, and the misconduct is of a serious nature.

• they have concerns about how their managing broker is handling, or has handled, an instance of misconduct;

• it is the managing broker who has committed the professional misconduct; or

• for any other reason, they would feel more comfortable reporting to BCFSA rather than to their managing broker.

-In addition to handling formal, written complaints, BCFSA maintains an anonymous tip line where licensees and members of the public can report suspicious activity or unethical conduct by licensees or employees of brokerages by telephone or by submitting an online tip form.

HANDLING REPORTS OF MISCONDUCT AS A MANAGING BROKER

Managing brokers have a range of options available to them to deal with issues of misconduct in their brokerage, such as:

• speaking to BCFSA for guidance;

• addressing the issue with:

◦ the licensee or employee involved in the potential misconduct;

◦ the consumer(s) impacted by the misconduct;

◦ the managing brokers of the other licensees and employees involved;

◦ others in the brokerage who were not involved in the misconduct; and

◦ the brokerage’s legal counsel to determine what legal risks may be associated with the conduct;

• reporting the matter directly to BCFSA;

• cancelling the employment or independent contractor relationship with the licensee or employee;

• reviewing and updating the brokerage’s policies and procedures to address the unacceptable conduct;

• creating brokerage training that focuses on discouraging the inappropriate behaviour; and

• offering to compensate those who have suffered damages with respect to the misconduct.

- the decision to report is separate from any decision regarding compensation provided to a client who has been harmed; even if the matter has been “made right” with the client, the obligation for reporting the matter still stand.

A FRAMEWORK FOR ETHICAL DECISION MAKING

-a number of resources that you should consult:

• official resources, including:

◦ the Rules and the Regulation;

◦ the Knowledge Base; and

◦ Practice Standards Advisors;

• unofficial resources, including:

◦ lawyers;

◦ senior licensees;

◦ mentors;

◦ managing broker