VANCOUVER — Real estate agents in B.C. say they are not ready and may risk significant financial penalties when new rules are implemented prohibiting “dual agency,” the practice where an agent represents both a buyer and a seller.

Starting June 15, according to rules posted by the B.C. Real Estate Council, agents are prohibited from representing both the buyer and seller in a transaction in almost all circumstances. The regulations, announced last November by B.C.’s Office of the Superintendent of Real Estate, require listing agents to present a disclosure form to every unrepresented potential buyer who asks for advice. Even answering even simple questions about real estate could be seen as acting as someone’s agent.

Additional rules require agents to disclose, in dollar value, exactly how much commission they would make whenever an offer is made.

To help agents understand the changes, the Real Estate Council of B.C., the regulator responsible for enforcing the rules, has a prepared three-day mandatory course agents must take before their licences expire.

But even on the eve of June 15, multiple agents told StarMetro they have yet to take the course. One agent said they received an invitation to take the course only nine days before the new rules were slated to take effect.

Barbara Bell-Olsen, managing broker at Royal LePage Westside, said the changes put agents who want to help unrepresented buyers by answering questions into a difficult position. She questioned whether the changes are truly helping the public.

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“What happens is if you’re holding an open house and ... you come in. If you start to tell me private or confidential information about yourself, I have to make sure I stop you right away. Because at that point, you could fall into implied agency,” Bell-Olsen said.

Such private or confidential information could include how much money a potential buyer is willing to spend, their motivation for the purchase, or what they’re looking for in a real-estate transaction.

“If you phone me up and you want information, I’m going to refer you to get your own realtor,” Bell-Olsen said.

Darlene Hyde, CEO of the B.C. Real Estate Association, has been unsuccessfully calling for a grace period after June 15, so agents can learn the new rules without risking penalties. Her association has been spending the last few weeks updating forms used by agents, educational materials and course curricula in an effort to make sure everyone will comply.

The group is tasked with educating 23,000 real estate agents.

“We’ve maxed out on our outreach efforts to realtor,” Hyde said. “All I can say is that the relationship that the consumer has with the agent is going to have to change in some circumstances.”

The new conflict-of-interest and dual-agency regulations were created in response to concerns that agents could not objectively represent two parties in the same transaction. They were intended as transparency measures, and to help the public make more informed real estate financial decisions.

For agents, however, the rules represent barriers to their established way of doing business. For example, an agent who specializes in a certain neighbourhood could find themselves in conflict of interest should more than one of their clients ever wish to make an offer on the same property.

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In those circumstances, an agent might find 10 clients vying for the same three listings, and the only way to avoid a conflict would be to convince the opposing buyers to agree to continue despite the conflict of interest, or to drop the clients altogether.

Erin Seeley, executive officer of the Real Estate Council of B.C., which enforces the new regulations, said agents have had plenty of time to prepare. She said the council will continue to perform up to 300 audits per year to ensure licensed agents are following new and old regulations.

If they fail to do so, the council can levy administrative fines of up to $50,000, conduct penalties of up to $250,000, and more fines equalling to what the agent earned from the sale in question.

She said there’s no plan to provide a grace period.

“In every complaint, there is always a potential to have a maximum fine if it meets the standards for the most egregious conduct and the ... greatest harm to the consumer,” Seeley said.

“In general, technical errors result in smaller penalties ... but there are always factors in how the misconduct is assessed.”

Brian Taylor, a lawyer with Norton Rose Fulbright, told Re/Max agents in an educational seminar that many will likely be caught for honest mistakes discovered during audits. Taylor’s advice was captured in a video distributed to Re/Max agents and obtained by StarMetro.

Taylor said one of the biggest risks is when a listing agent is approached by a potential buyer at an open house, who asks whether the listing agent can show them any other properties.

If the agent agrees, they may have just committed a dual-agency violation.

“It’s not going to come from complaints. It’s going to be audits, that’s where it’s going to get dinged,” Taylor said. “(Agents) may say, ‘This is stupid.’

“(Regulators) don’t make rules for you to ignore. It isn’t a defence to say, ‘Your rule is stupid.’ ”

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