Client or customer – is there a difference. Absolutely!
The terms are not interchangeable. Each has been defined within the Real Estate and Business Brokers Act, 2002, and Regulations (REBBA 2002). The key to remembering the difference rests with the type of agreement the consumer has with the brokerage. A client is represented under a (buyer or seller) representation agreement. A customer is not and is provided services only. As such, the obligations owed to each is different, including the duty of care.
The duty of care owed to customers involves providing accurate information, responding to questions, being honest, and performing specific agreed-upon functions.
The duty of care owed to clients includes everything you do for that client, and may be outlined in the representation agreement, general, and fiduciary obligations under agency law and regulatory obligations (as set out in REBBA 2002).
Duties to Clients
In addition to the foregoing duty of care, some of the obligations owed to clients under agency law include the following:
1. Exercise care and skill – have the requisite knowledge and skills; provide complete and accurate information; recommend relevant experts, where applicable
2. Negotiate favourable terms – advance the client’s interests by assisting in negotiations; draft favourable terms and conditions for agreements arising from the negotiations
3. Maintain confidentiality – maintain confidentiality regarding all matters (e.g., client’s personal information, client’s motivation for buying/selling, the amount to be paid or accepted during negotiations)
4. Disclose information – disclose information pertinent to the client (e.g., actual or potential conflicts of interest); disclose matters relating to the transaction
5. Ensure honesty – demonstrate honesty of intent in all dealing
6. Act in person – perform duties personally, unless otherwise instructed
7. Obey instructions – obey the client’s instruction, unless it’s not lawful (e.g., the client asks you to create a misleading advertisement regarding the property)
8. Perform mandate – perform the mandate as set out in the representation agreement; act only within specified authorities; seek clarification if you are uncertain about said authorities
1. Maintain utmost loyalty – the client’s interests come first, best achieved in single representation (i.e., you represent the interest of one party to a transaction)
2. Avoid conflicts of interest – beware aware of situations that may lead to conflicts of interest, such as representing two or more clients at the same time (multiple representation) acquiring the client’s property selling owned property to the client
3. Disclose conflicts – disclose any personal or third-party interests that do or might conflict with the client’s interests; disclose the exact nature and extent of the conflict(s), preferably in writing and signed by the client
4. Not make secret profit – do not make a profit at the client’s expense (e.g., providing improper advice, accepting payment from another party without the client’s knowledge and written consent)
5. Not misuse confidential information – do not use confidential information (e.g., confidential details about the client, the property, and/or the transaction) for your own interests, to harm the client, or to interfere with the client’s endeavours
Ontario Real Estate Association and Acronamic Learning Systems Inc. (2015). Land, Structures and Real Estate Trading. Don Mills, ON: MediaLinx Printing Group.
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