Working as a team in real estate brokerage

First, these are not new rules, but rather a reminder of the applicable law, regulations and jurisprudence to prevent licensees who work as part of a team from ending up in a situation of non-compliance or breach of ethics, particularly regarding conflicts of interest and the protection of confidential and strategic client information.

The OACIQ has made some observations concerning, among other things, the application of the prohibition of conflicts of interest in a team context and has deemed it necessary to make recommendations by referring to the applicable provisions.

The REBA does not provide a definition of the team concept.

In addition, the applicable legislation and regulations contain the following elements:

1. A team is made up of at least two licensees (a single person cannot form a team) (RBR 78 and 113)
2. A team is a subgroup of real estate brokers who belong to the same agency (REBA 11 and 78, and RBR 113)
3. Only OACIQ licensees may be members of a team. Employees, assistants or other business partners who do not hold a licence issued by the OACIQ may not be members of a team (REBA 124)
4. Team members are all tied to the same real estate agency: a team cannot be made up of members from different real estate agencies (REBA 11)
5. Team members may only belong to one team at a time (RBR 78 and 113)

Please note: a team should not be confused with an occasional co-listing. Co-listings are possible within the same agency as well as within separate agencies. 

Several warnings are in order. Here are a few:

1. The members of a team collectively represent the clients of the team (e.g. if a brokerage contract is signed by the team with a seller, all the members of the team represent the seller), which is what is generally proposed as an offer of services and benefits to consumers.
2. Under the prohibition against placing oneself in a conflict of interest (RBR 2) and case law, members of the same team cannot represent the buyer and the seller in the same transaction, among other things if they have received strategic or confidential information specific to the seller or if they are otherwise disloyal to the seller who has signed a brokerage contract with the team, since they are placing themselves in a conflict of interest, which is prohibited.
3. What about double representation? The rule prohibiting double representation applies under section 29.1 of the REBA, whether or not one is practising as part of a team. However, if the ethical obligations are met, including the fact that the team member wishing to represent the buyer has not received strategic information or confidential information specific to the seller, double representation would be permitted on an exceptional basis with the buyer's written consent (RBR 17). Standard clause 1.15 NOTICE REGARDING THE EXCEPTION APPLICABLE IN A SITUATION OF DOUBLE REPRESENTATION has been designed for this purpose.
   
   It's important to remember that each licensee is responsible for complying with his or her ethical obligations, including those mentioned above. The use of the exception to the double representation prohibition set out in section 17 of the RBR, in the context of a team, is a risk factor that should not be overlooked. The real estate broker must not have received strategic or confidential information specific to the seller and must not be disloyal to the seller who has signed a brokerage contract with the team.  At all times, brokers must avoid placing themselves in a real or apparent conflict of interest situation.  
4. When a buyer is not represented, team members offer fair treatment to the buyer (RBR 14 and 15).

Yes, as in the case of a broker representing a seller and acting alone, the same rules apply. The broker must inform the buyer that he is representing the seller that he must protect and promote his client's interests, and that he may treat the client fairly if he is not represented. To ensure that the buyer understands this, the seller's broker can complete the recommended form Notice from the seller’s broker to the unrepresented buyer, which explains the broker's role, obligations and method of compensation.

The seller's broker may refer the buyer to real estate brokers who are not part of his team for representation. The appearance of conflict of interest is at the heart of this situation. The seller's broker must refer more than one name, ideally three, and may not receive any remuneration for the referral, since he himself is involved in the transaction.  

Obviously, the buyer referred to another broker in the agency must accept the situation, as this is an exception to the double representation ban in agencies (standard clause 1.16 – Warning to the buyer – double representation). The OACIQ does not encourage the practice of referring to brokers within one's agency: brokers (or teams) who systematically refer to brokers within their agency are more exposed to the risk of an apparent conflict of interest. In the event of a complaint, all factors would be evaluated, including the fact that these brokers may have obtained confidential information, especially for small agencies or if there is a close relationship between the brokers (e.g. family ties, etc.). Ideally, make referrals to several brokers from different agencies.

No. The team must refer more than one broker, ideally three, and will not receive any remuneration for the referral since the team itself is involved in the transaction. 

Under the prohibition against placing oneself in a conflict of interest situation (RBR 2) and case law, members of the same team may not represent the buyer and the seller in the same transaction if, for instance, they have received strategic or confidential information specific to the seller or if they are otherwise disloyal to the seller who has signed a brokerage contract with the team, since they are placing themselves in a conflict of interest, which is prohibited.  

What about double representation? The rule prohibiting double representation applies under section 29.1 of the REBA, whether or not one is practising as part of a team. However, if ethical obligations are met, including the fact that the team member wishing to represent the buyer has not received strategic or confidential information specific to the seller, double representation would be permitted on an exceptional basis with the buyer's written consent (RBR 17). Standard clause 1.15 NOTICE REGARDING THE EXCEPTION APPLICABLE IN A SITUATION OF DOUBLE REPRESENTATION has been designed for this purpose.

It is important to remember that each licensee is responsible for complying with his or her ethical obligations, including those mentioned above. The use of the exception to the double representation prohibition set out in section 17 of the RBR, in the context of a team, is a risk factor that should not be overlooked. The real estate broker must not have received strategic or confidential information specific to the seller, must not be disloyal to the seller who has signed a brokerage contract with the team, and therefore must not place himself in a conflict of interest.

The rules prohibiting conflicts of interest and requiring the protection of confidential and strategic information are the same for residential and commercial real estate brokerage.

The agency's name must take precedence over the team's name in all forms of representation and advertising.

The business plan must be well defined beforehand and must not be used as a means of circumventing the application of the regulations. A co-listing broker from each agency must sign the brokerage contract to bind the agency. Advertising must not be misleading, giving the impression that it is a team when it is in fact a co-listing, for example, and vice versa. The role of each broker must also be clearly established and communicated to the client.

No. Team members must all be linked to the same real estate agency. A team cannot be made up of members from different real estate agencies (REBA 11). Each sub-franchised company is a real estate agency, with its own licence number and ethical obligations.