This site uses cookies.

The types of cookies we use, and the way we use them, are explained in our Privacy Policy. By clicking "Accept" or continuing to use our site, you agree to our use of Cookies.
More information


Brian Madigan LL.B., Broker

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

96 Rexdale Blvd. 
Toronto, Ontario 

Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

Search in:  

Sort by:

Brokerages Should "Supervise"

November 8, 2016 - Updated: November 8, 2016

Brokerages Should “Supervise”


This doesn’t really seem to happen very often in 2016. It did decades earlier, but that was based upon a model of “employment”.


Brokerages would obtain the leads and drive the business. The individual sales representative was simply an employee. Brokerages received a much larger split of the commission income.


Today, we have moved away from that business model. Under the Real Estate and Business Brokers Act, 2002, the sales professionals are technically employees. That makes the Brokerages vicariously liable in law for their actions. However, the new business model is that of the “independent contractor”. It’s accepted under the Income Tax Act. That’s “good and bad”. From the perspective of success, efficiency and taxation, it works well. But, oversight, and supervision were lost.


Under the Act:


Duty of brokerage


26. A brokerage shall ensure that every salesperson and broker that the brokerage employs is carrying out their duties in compliance with this Act and the regulations. 


Under the Code:


Duty to ensure compliance


41. (1) A brokerage shall ensure that every salesperson and broker that the brokerage employs is carrying out their duties in compliance with this Regulation.


(2) A broker of record shall ensure that the brokerage complies with this Regulation.


Unfortunately, like the RECO model, this is often more like a “fire department” approach. Only when something goes terribly wrong does the Brokerage find out about it and do something about it. Sometimes, that means the sales professional is simply “dismissed”. So, they lose that oversight in their next position.


Mandatory Supervision


Surely, if there is a disciplinary offence, the Brokerage should be obligated to oversee, monitor, document and report in respect to the appropriate activities of the agent over a specified time period. I think that should be added to the discipline system. It’s there now, so nothing actually needs to be changed. It’s just underutilized.


Regular Supervision


There are a whole series of issues here. How many transactions does the agent do each year? How many Offers do they write? Do they have a mentor? What is their area of expertise? What programs and courses are they taking? Naturally, the nature and type of supervision can be customized to suit the circumstances.


The Real Estate Audit


Brokerages are placed in a unique situation to review the Offers and related documents prepared by an agent. Why not annually, at the minimum, pull three files for a detailed review?


This would step up the degree of supervision and stave off problems before they materialize.


To continue to use the fire department model, seems somewhat foolhardy.


Brian Madigan LL.B., Broker

Tagged with: supervision obligation duty brokerage rebba 2002 code of ethics
| | Share

Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

Powered by Lone Wolf Real Estate Technologies (CMS6)