BCSA (Ontario) - Customer

Buyer Customer Service Agreement – What is a CUSTOMER?

We are going to examine the Buyer Customer Service Agreement. In doing so, we will have to have a look at it carefully, paragraph by paragraph, line by line and word by word. Otherwise, it’s just general impressions, and you really don’t need that.

The first question before we get to the Form is: What is a Custromer?

A short explanation has been offered by the Ontario Real Estate Association in its document entitled “Working with a REALTOR”:

Customer

A buyer/tenant or seller/landlord may not wish to be under contract as a client with the brokerage but would rather be treated as a customer. A REALTOR® is obligated to treat every person in a real estate transaction with honesty, fairness, and integrity, but unlike a client, provides a customer with a restricted level of service. Services provided to a customer may include showing the property or properties, drafting the offer, presenting the offer, etc. Brokerages use a Customer Service Agreement to document the services they are providing to a buyer/tenant or seller/landlord customer. Under the Act, the REALTOR® has disclosure obligations to a customer and must disclose material facts known to the brokerage that relate to the transaction.

I propose to go through the explanation and offer my own commentary in “italics”.

Let’s have a better look at what that says:

Customer

A buyer/tenant or seller/landlord may not wish to be under contract as a client with the brokerage

This means just about anybody on either side of a buy/sell or lease of real estate

but would rather be treated as a customer.

You will appreciate that this presumes that the consumer knows and appreciates what a client is and what a customer is, and the differences between them.

A REALTOR® is obligated to treat every person in a real estate transaction with honesty, fairness, and integrity,

This duty is set out in the Code of Ethics which is a Regulation passed pursuant to the Real Estate and Business Brokers Act, 2002, (often referred to as REBBA, 2002).

That duty is owed to every member of the public. No special relationship need exist.

but unlike a client, provides a customer with a restricted level of service.

So, here the key concept is “RESTRICTED” level of service. Obviously, this also begs the question: “how restricted”.

Services provided to a customer may include showing the property or properties, drafting the offer, presenting the offer, etc.

These are just examples and include under the definition of services:

1)    Showing property

2)    Drafting Offers,

3)    Presenting Offers, and

4)    Other services, not specified.

Brokerages use a Customer Service Agreement to document the services they are providing to a buyer/tenant or seller/landlord customer.

Presumably, if there are to be restricted services, then they should be spelled out specifically in the agreement.

Under the Act, the REALTOR® has disclosure obligations to a customer and must disclose material facts known to the brokerage that relate to the transaction.

This statement is partly true. In addition, for customers, the REALTOR must disclose those material facts which “ought to be known”. That was a major oversight in the explanation.

This is an obligation imposed under the Code of Ethics. It says “known” and this is fine, the agent can make that disclosure, but it also says “ought to know”. So how can an agent disclose something that they don’t know about? That calls for investigation and inquiry!

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com