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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Buyer Customer Service Agreement (Part 6) - REPRESENTATION and CUSTOMER SERVICE

June 1, 2015

Buyer Customer Service Agreement- REPRESENTATION AND CUSTOMER SERVICE

 

We will review the “Representation and Customer Service” provision in the Customer Service agreement in detail. My comments will appear in “italics”. I will first set out the section in full as it appears in the document, then I will break it apart for detailed review.

 

 

“3. REPRESENTATION AND CUSTOMER SERVICE: The Buyer acknowledges that the Brokerage has provided the Buyer with written information explaining agency relationships, including information on Seller Representation, Sub-Agency, Buyer Representation, Multiple Representation and Customer Service. The Buyer acknowledges that the Brokerage will be providing customer service to the Buyer and will not be representing the interests of the Buyer in a transaction. The Brokerage may be representing the interests of the seller as an agent or sub-agent. When the Brokerage is representing the seller, the seller is considered to be the Brokerage’s client, and the Brokerage’s primary duties are to protect and promote the interests of the seller/client. The Brokerage will disclose all pertinent information to a seller/client obtained from or about the Buyer.

 

Even though the Brokerage’s primary duties may be to the seller, the Brokerage may provide many valuable customer services to the Buyer.

 

When providing customer service to the Buyer, the Brokerage’s duties to the Buyer include:

 

• the Ethical duty to deal fairly, honestly and with integrity;

• the Legal duty to exercise due care when answering questions and providing information; and

• the Legal duty to avoid misrepresentation.

 

The Buyer acknowledges that the Buyer may not be shown or offered all properties that may be of interest to the Buyer. The Buyer hereby agrees that the terms of any buyer's offer or agreement to purchase or lease the property will not be disclosed to any other buyer.

 

The Buyer understands and agrees that the Brokerage also provides representation and customer service to other buyers and sellers. If the Brokerage represents or provides customer service to more than one seller or buyer for the same trade, the Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers and buyers of the nature of the Brokerage's relationship to each seller and buyer”

 

REVIEW

 

 

3. REPRESENTATION AND CUSTOMER SERVICE:

 

The Buyer acknowledges that the Brokerage has provided the Buyer with written information explaining agency relationships,

 

Generally, this would be the document entitled “Working with a REALTOR”. It comes in brochures, fax forms and electronic versions. There is also another document entitled “Working with a Commercial REALTOR”. It is identical in all respects, save and except the inclusion of the word “commercial”.

 

including information on Seller Representation, Sub-Agency, Buyer Representation, Multiple Representation and Customer Service.

 

 

Seller Representation means an agency appointment with the Seller. The Seller is a Client and fiduciary duties are owed. Sub-Agency is an arrangement whereby Brokerage A takes on Brokerage B as a sub-agent, that is, “agent of the agent”. Brokerage B owes fiduciary duties to the Client. Buyer Representation is the same for the Buyer. Here, the Buyer is a Client and fiduciary duties are owed. Multiple Representation occurs when a Brokerage has more than one Client, either Sellers or Buyers in the same deal. Obviously, there is going to be a conflict. Customer service is non-agency services with some obligations under the Act and the Ciode.

 

The Buyer acknowledges that the Brokerage will be providing customer service to the Buyer and

 

This is a simple straightforward acknowledgement that this is indeed the “customer service agreement” and NOT something else.

 

will not be representing the interests of the Buyer in a transaction.

 

Representing is the key term. That means “agency”. It also means fiduciary duties. So, by the inclusion of the word “not”, the document means “no agency” and “no fiduciary duties”.

 

The Brokerage may be representing the interests of the seller as an agent or sub-agent.

 

This is a statement of disclosure or disclaimer. But it says “may”, which means, of course, that it is not the real notice.

 

When the Brokerage is representing the seller, the seller is considered to be the Brokerage’s client, and

 

Previously explained.

 

the Brokerage’s primary duties are to protect and promote the interests of the seller/client.

 

Very specifically, it means that the Brokerage is working FOR the Seller, and just helping out the Buyer.

 

The Brokerage will disclose all pertinent information to a seller/client obtained from or about the Buyer.

 

This is interesting! The Brokerage is going to take all of your confidential information and pass it along to the Seller. So you are HEREBY WARNED. Keep your secrets to yourself, if you know what’s good for you.

 

Even though the Brokerage’s primary duties may be to the seller, the Brokerage may provide many valuable customer services to the Buyer.

 

What is meant by that? How valuable can these “customer services” actually be? Well, at least, so far, they are going to be free.

 

When providing customer service to the Buyer, the Brokerage’s duties to the Buyer include:

 

• the Ethical duty to deal fairly, honestly and with integrity;

• the Legal duty to exercise due care when answering questions and providing information; and

• the Legal duty to avoid misrepresentation.

 

 

You appreciate that the Brokerage is obligated not to lie and try to trick you. The ethical duties are set out in s. 3 of the Code of Ethics. The next section in the Code says …” the registrant shall provide conscientious and competent service”. This applies to both clients and customers. Further, section 4 requires the registrant to “demonstrate reasonable knowledge, skill, judgment and competence” in providing those services.

 

You will appreciate that goes quite beyond the legal duty set forth above.

 

There is also a provision in the Code that deals with “providing opinions”. Here, “reasonable knowledge, skill, judgment and competence” is required “in providing opinions, advice or information to any person”. This would cover off the Buyer in a customer service agreement. It’s not likely that opinions or advice would be offered. If that were to occur, then the customer becomes a client (by accident).

 

Another legal duty is identified concerning misrepresentation. The Code of Ethics deals with this in section 32 where it says: “a registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud, or unethical practice in respect to a trade in real estate”. Again this applies to both clients and customers as well as the general public.

 

 

The Buyer acknowledges that the Buyer may not be shown or offered all properties that may be of interest to the Buyer.

 

This is the property search. It will cover some properties, not all. There is no expectation here for something broad based and comprehensive. That would require an agency appointment.

 

The Buyer hereby agrees that the terms of any buyer's offer or agreement to purchase or lease the property will not be disclosed to any other buyer.

 

This is an acknowledgement of some degree of confidentiality. So, if the Brokerage represents two buyers both submitting Offers on the same property in competition with each other, one as a customer and the other as a client, they are agreeing not to disclose the customer’s Offer to the competing Buyer Client.

 

The Buyer understands and agrees that the Brokerage also provides representation and customer service to other buyers and sellers.

 

This is a simple acknowledgement, but it is not notice. Actual notice is required. At the very least the Confirmation of Co-operation and Representation (CCR) is that document. This deals with agency and non-agency arrangements.

 

If the Brokerage represents or provides customer service to more than one seller or buyer for the same trade,

 

This is the obligation, it covers agency “representation” and non-agency “customer service.

 

the Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers and buyers of the nature of the Brokerage's relationship to each seller and buyer

 

 

Full disclosure will be made BEFORE an Offer. So, ordinarily this will be the CCR.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: customer service not agent no agency rebba 2002 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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