IMPORTANCE OF AGENCY LAW IN PROVIDING REAL ESTATE SERVICES

Agency

The legal concept that involves acting on behalf of another; a relationship in which one person (the “agent”) is authorized by another person (the “principal”) to act on their behalf in dealing with third parties

Reasons to Use an Agent

The key reason why people hire agents is to benefit from the agent’s knowledge, skills, and abilities.

Fiduciary relationship

The agent is known as the “fiduciary” while the principal is known as the “beneficiary”

The Role of the Fiduciary

The law imposes strict “fiduciary duties” upon the fiduciary

The overarching duty is the duty of loyalty – the fiduciary must act solely for the beneficiary’s benefit (even to the fiduciary’s detriment) for all matters within their relationship

Fiduciary

A person who holds a position of trust with respect to someone else and is obliged, by virtue of the relationship of trust, to act solely in the other person’s benefit

Key fiduciary duties:

• The duty of loyalty

• The duty to avoid conflicts of interest

• The duty of full disclosure

• The duty of confidentiality

• The duty to obey lawful instructions

Central purpose of regulating and licensing real estate services in British Columbia

to ensure that individuals offering real estate services fulfil their agency/fiduciary duties in accordance with the public interest. When acting in an agency relationship, always ask yourself: is this action or decision in the best interests of my principal?