Sustainable housing and real estate in Kitchener-Waterloo Region

What duties does a Realtor owe you?
January 13, 2009, 2:58 am
Filed under: Buying, Rebecca Sargent, Selling, Uncategorized | Tags:

People are often concerned about what Realtors are actually supposed to do for them.

In Canada, Realtors are licensed and regulated by the Real Estate Council of Ontario (RECO) and governed under the Real Estate and Business Brokers Act (REBBA), which carries certain liabilities and expectations of service. These structures are in place to protect both you (the buyer or seller) and the Realtor.

Let’s say you walk into an open house, and you ask the Realtor at the property some questions? What can they tell, what can’t they tell you, and how should they act? Do they have to tell you the truth? In this situation, regardless of whether you are in a contract or not, the Realtor owes you honesty, fairness and due care in answering questions. As  skilled and licensed professionals, Realtors are expected to provide sound real estate advice that a person can rely on. They are not allowed to willfully or negligently misrepresent information, or assert themselves as experts in an area that they are not familiar with. They may not be able to provide you with all the information they have on a transaction unless you are in an agency relationship, as a protection to their clients, but they are NOT permitted to provide you with faulty information.You should not tell the Realtor in this situation anything you do not want them to directly reveal to the other party. The Realtor’s primary obligation lies with their contracted clients.

If you decide to sign an agency contract with a Realtor, they owe you added duties, including accountability, confidentiality, competence, good faith/full disclosure, loyalty and obedience. Accounting means the agent must keep accurate records of all funds they receive and that all transactions must comply with provincial regulations. Canada’s FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) requires all Realtors to check your identification for all financial transactions. They are also required to report any suspicious activity (which includes any large cash transactions) to federal authorities by law. Confidentiality requires that the Realtor should not disclose any information relating to your transactions to anyone else without your consent. This means they can’t tell the other party that you are motivated to move, your financial situation, or any other detail about you without your consent. This does not apply to any known material facts of your property (including defects), which a Realtor is obligated to disclose under the general honesty regulation owed to all people.

Competence means that your Realtor must have sufficient knowledge and skill to carry out the transaction. Realtors are obligated to discover certain facts about the property that a reasonable Realtor should be able to ascertain, and have been given training to do this. They are instructed to refer their clients to a third party if they are unable to adequately answer a question. A licence in real estate does not mean the Realtor is licenced to do home inspections, appraisals, or answer legal questions. All homes should be inspected by a licenced inspector for your protection, and a Realtor should not advise you otherwise.

Good faith/full disclosure means that the Realtor must disclose all information they have that relates to the transaction. This means they must tell you everything they know about the property, including any profits they may gain for the transaction from referrals or other reasons. Dual agency, when a Realtor represents both the Buyer and the Seller, is a slightly different situation, as the Realtor must protect the interests of both parties. In this situation, the Realtor should explain the situation to you and get your permission in writing. The Realtor may not tell the Buyer or Seller the price the other party is willing to accept, the motivation of either party, the price the Buyer should offer, or the price the Seller should accept.

Loyalty means that the Realtor should place the interests of their clients above all else except the law. They must act in the best interest of their clients at all times. Obedience means that in a client relationship, the Realtor must follow their client’s lawful instructions whether they agree with them or not.

What is the best way to ensure you are receiving the care and treatment you deserve from a Realtor? Inform yourself of what to expect, and interview a couple of Realtors before you hire one. Ask them what services they are willing to provide you with for their services and get it in writing. Keep copies of all your communication or documents. You always have the option to fire the Realtor if they do not meet the contract. Be aware that most agency contracts have holdover periods which may obligate you to pay commission to them for certain services. If you don’t know, ask. There is no such thing as a stupid question, and your Realtor should make an effort to answer you- that is what you pay them for. 

If you feel that a Realtor has not performed their prescribed duties under their licencing, you should contact CREA or the provincial governing body. The Real Estate Council of Ontario (RECO) handles all complaints in Ontario (

A good Realtor is worth their commission, unfortunately a small handful give the rest a bad name. It is in your best interest to protect yourself by knowing what to expect in the process!


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