Agency Relationships and Disclosure
Agency Relationships and Disclosure
Agency law in Nova Scotia is governed by the Real Estate Trading Act and common law. A licensee must establish a clear agency relationship with clients and disclose it in writing. The most common agency models are seller representation (listing brokerage represents the seller), buyer representation (buyer's brokerage represents the buyer), and dual agency (one brokerage represents both parties, which requires informed written consent from both).
Key concepts include: fiduciary duties (loyalty, confidentiality, full disclosure, obedience, reasonable care, accounting), disclosure of agency at first substantive contact, and conflicts of interest. Licensees must disclose any personal interest in a property and avoid undisclosed dual agency. The Act requires written service agreements for both seller and buyer representation.
Traps: Questions often test whether dual agency is permitted-it is, but only with written consent. Another trap is assuming that a salesperson can represent both parties without brokerage consent. Also, be careful about implied agency: it can arise from actions, but written disclosure is required. Confidentiality survives the end of the agency relationship.
Worked example / rule of thumb: If a salesperson shows a property to a buyer who is not represented, the salesperson must disclose that they represent the seller and provide a written disclosure. Rule: "Disclose early, disclose in writing, and get consent for dual agency." Always use the Commission's prescribed forms for agency disclosure.
Proper agency disclosure protects both consumers and licensees.
Conduct, Trade Practices and Professional Standards
Professional Conduct and Trade Practices
The Commission sets standards for professional conduct and trade practices to protect the public. Licensees must act with integrity, honesty, and professionalism. The Act and Regulations prohibit false advertising, misrepresentation, fraud, and undue influence. Licensees must also avoid conflicts of interest and must not engage in discriminatory practices under human rights legislation.
Key concepts include: competence (knowing the market and legal requirements), confidentiality, cooperation with other licensees, and handling of trust funds. Trade practices cover how listings are presented, how offers are handled, and how commissions are negotiated. The Commission can discipline licensees for breaches, including fines, suspension, or revocation.
Traps: Questions may test the difference between unethical and illegal conduct-both can lead to discipline. Another trap is assuming that "puffery" is acceptable; exaggerated claims can be misrepresentation. Also, beware of rebates or inducements that are not disclosed. Licensees must not disclose confidential information about sellers to buyers without consent.
Worked example / rule of thumb: If a licensee discovers a latent defect in a property, they must disclose it to the buyer if it is material. Rule: "When in doubt, disclose." Always document your actions and communications. The Commission's Code of Ethics provides guidance.
Professional standards are enforced through complaints, investigations, and disciplinary hearings. Maintaining high standards builds public trust.