Agency, Representation, and Fiduciary Duties
Core Concepts
Agency relationships in Nova Scotia are governed by the Real Estate Trading Act and common law. Candidates must understand the different types of agency (seller agency, buyer agency, dual agency) and the fiduciary duties owed: loyalty, confidentiality, disclosure, obedience, accounting, and reasonable care. You must know how agency is created (written agreement required for buyer agency) and terminated. Also, understand the concept of designated agency (where different licensees in the same brokerage represent different clients) and the disclosure requirements.
Traps in Questions
A common trap is the assumption that a salesperson automatically represents the buyer. In Nova Scotia, unless a buyer agency agreement is signed, the salesperson may be acting for the seller. Another trap is confusing dual agency with designated agency. Dual agency occurs when the same licensee represents both parties; designated agency involves different licensees within the same brokerage. Also, questions may test the duty of confidentiality after the agency relationship ends – it continues indefinitely for certain information.
Worked Example / Rule of Thumb
Rule: A buyer agency agreement must be in writing and must include a start and end date. For example, if a buyer signs an agreement on January 1 for three months, it expires on March 31. During that time, the licensee owes fiduciary duties to the buyer. If the buyer wants to buy a home the licensee has listed, the licensee must disclose the conflict and obtain consent to act as a dual agent, or refer the buyer to another licensee.
Additional Concepts
Understand the obligations when working with customers versus clients. Customers are entitled to honesty and fairness but not fiduciary duties. Also, know the rules around referral fees and the prohibition on paying fees to unlicensed persons.