Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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Brian Madigan's Lock Box Rules

August 19, 2016 - Updated: August 19, 2016

Brian Madigan’s Lock Box Rules

 

You wouldn’t really think that there would be any need for this, but, if you look at recent Discipline cases which came before the Real Estate Council of Ontario, you would appreciate that there are just too many transgressions.

 

Far too many are unfamiliar with the “rules”. What rules? Well, I just had to make some up!

 

The Hardware

 

A lock box is a secured device which contains a key or several keys in order to gain access to the premises.

 

There are three types of lock box systems in use throughout Toronto and the GTA:

 

1)    Combination lock, alphabetical, spin dial, similar to student’s locker combination locks, (three rotations)

 

2)    Push Button, using 10 numbers, correct 4 in sequence will work,

 

3)    Rotational Alignment, Numbers will roll into alignment, correct 4 will be sufficient.

 

There are also electronic boxes which operate over the internet with the use a mobile smartphone. This ensures that only the authorized agent may enter.

 

The difficulty here is that they are considerably more expensive. Some boards have implemented their use and they are very much to be preferred. However, the Toronto Real Estate Board with about 45,000 members will not likely use it.

 

Security of the Lock Boxes

 

The boxes themselves can be easily broken, with a hammer, screwdriver or pliers. Provided that one is not concerned about the damage, then access is relatively easy. Your client homeowner should know this.

 

The presence of the lock box on the door also advertises the fact that there is a key present in the unit.

 

The Combination

 

When the unit is purchased, there is either a default setting already set, or the purchaser will have to follow the instructions and enter a new combination into the lock box.

 

Now, you can see the risks here!

 

One agent uses “CAT”, and that’s enough. The agent gets busy and purchases two more units and codes them both with “CAT”.

 

Then a decade passes, 10 units, all accessible using the combination “CAT”. By this time the agent has had about 150 listings over the decade, all viewed at least 20 times, with 150 owners also knowing the combination. That’s a lot of people.

 

Actually, the agent who used “CAT”, also became quite innovative and used “DOG” for some of his newer units.

 

If people are looking for four sequential numbers, they often select the year that they were born, so for a 40 year old agent, that means “1976” is the code.

 

Change the code weekly. Every unit should have its own distinct code.

 

Publishing the Code

 

There are two presentations of MLS Listings, one for the public generally, and the other for Brokers. There is a section for “Broker’s remarks”. Sometimes the lock box code is published there and on occasion an agent will forward the Broker’s copy to the client, thereby, through inadvertence revealing the code.

 

Two items here, the code should never, ever be displayed on the MLS system, and consumers should only receive the Client version of the MLS listing.

 

Releasing the Code

 

Whether the code is “CAT” or “DOG” it should only be released to a current “registrant” who has booked a showing. The Listing Brokerage can check registration online and then communicate directly with the registrant’s brokerage. This is how a reasonably safe system should work.

 

Sometimes, one agent will release it over the phone, “trying to be nice” to another agent. It would be easy to simply say “that’s great, please book the appointment through my office and they will release the code….”.

 

It would then be the obligation of the Buyer’s brokerage to pass the code along to their own agent.

 

This seems like a relatively simple procedure, but unfortunately there are many transgressions.

 

Using the Combination

 

Buyer’s agents upon approaching the lock box should seek some degree of privacy using the combination. They should not say “CAT” or “DOG” out loud while trying the combination.

 

Protecting the Lock Box while Viewing the Premises

 

Some agents will leave the Lock Box open, and on the front door; and while only the “T” or “G” might be visible for alphabetical combinations, “1976” is there for all to see.

 

If the property is hot, because the listing is new, then there could be several other showings at about the same time. This means that the code is apparent to all.

 

Transferring the Key to Another Agent

 

This process needs to be handled cautiously. This occurs when the next appointment people arrive with their agent before the first showing is finished.

 

Do you know the other agent? You can check them on your phone, providing you have access to the internet at that moment. At the very least, you will have to obtain a business card.

 

If there is uncertainty, lock the door, place the key in the lock box and require the next agent to use the code he was given in order to permit entry.

 

On occasion, you will find an aggressive second agent who wants to run through the house with his clients in the middle of your showing. They’re gone before you.

 

This is problematic, if there was no agent and they were just random people; and much, much worse, if they were thieves.

 

In order to prevent this from taking place at the outset, bring the lock box into the house during the showing and lock the door from the inside. That will force the second agent to wait, and make sure that nothing goes wrong on your “watch”.

 

Replacing the Lock Box

 

After ensuring that all the windows and doors are properly secured, the door should be locked and the key placed within the lock box. Then, spin the dial if the combination would otherwise be evident. Don’t leave “1976” reading on the dial.

 

Appointment Times

 

Let’s assume that your appointment is from 6:30 pm to 7:30 pm, that’s one full hour. Be there, or don’t use you lock box. If you are going to be late and need more time, then call.

 

Don’t Come Back

 

If you saw the property once and you like it, don’t go back and see it again letting yourself in again in the process. You do not have permission for re-entry. This means that if you go to a coffee shop with your clients and want to go back, you will have to book again. And, I know that the Listing agent will see that you are obviously interested because you booked two appointments. You will just have to deal with that.

 

The Buyer’s Agent Has to be There

 

While this might seem obvious, this is missed and is a common mistake. The fact that the agent trusts their own clients or the home inspector doesn’t really matter. They are there to “supervise” the attendance, not to release the code.

 

RECO Decisions

 

There are some recent decisions dealing with the issue of unauthorized access to people’s homes:

 

·        Plotting to Permit Entry- $7,000 fine

·        Going back a second time without permission- $5,000 fine

·        Crawling in through the Window- $4,000 fine

·        Giving keys to Buyers before closing- $3,000 fine

·        Releasing Code to Client directly- $3,500 fine

·        Releasing Code to Client directly- $3,000 fine

·        Letting Home Inspector In without supervision- $3,000 fine

 

Access by a High Level Thief

 

Within the last month (July 2016), an individual called a Brokerage to book an appointment. She impersonated a well-known real estate agent and requested that the code be sent to her directly and not through her brokerage.

 

The receptionist for the Listing Brokerage complied. The woman gained access and stole a number of valuables. This was repeated several times over before she was caught.

 

This woman had formerly been a real estate agent, so she knew the right things to say.

 

Brian Madigan’s Rules for Lock Boxes

 

·        Explain the use and procedure to the Owner

·        Obtain their consent in writing to place a lock box on the premises

·        It’s the owner’s property

·        It’s the owner’s key

·        Permission is always required

·        Use a good a secure lock box

·        Protect the code

·        Change the code weekly

·        Make sure the code is different from other units

·        Never publish the code on MLS

·        Don’t sent the client a Broker’s copy of the listing without reading it

·        Confirm the identity of the buyer’s agent

·        Transfer the code in writing (email) to the Buyer’s Brokerage

·        Don’t have two appointments at the same time

·        As a buyer’s agent, don’t give the key, the code or access to another buyer’s agent

·        As a buyer’s agent, be ontime

·        Don’t go back, you don’t have permission

·        Don’t let your clients know the code

·        Don’t give the code to your clients while you are enroute

·        Don’t give the code to the home inspector, you are to be there to supervise

·        Lock up when you leave

·        Protect the privacy of the code upon departure

 

Be cautious, be safe and protect other people’s property.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com

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Tagged with: lock boxes rules safety security protection ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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