Duties Customer Duties Customer duties are duties owned

Duties

Customer Duties � Customer duties are duties owned by the brokerage and salesperson/broker to the customer (3 rd party) ◦ Specific duties: �Should not make misrepresentations about property to customers �Take care in asking customer inquiries to insure accurate and complete information ◦ General duties (MHD): �Legal duty not to misrepresent �Ethical duty to be honest �Duty to take due care when making disclosures

Client Duties (COLD-AC) ◦ Competence – agent must exercise level of care expected from an average person in the occupation �Principal liable for agent’s actions ◦ Obedience – agent must follow all reasonable and lawful instructions even if he doesn’t agree with it ◦ Loyalty – most important duty because duties to client are above all else except the law �You must be loyal within scope of responsibilities ◦ Disclosure – agent must disclose all information that is relevant to the transaction, i. e. any information that affects the desirability/value of the property and all material information that is known

Client Duties (COLD-AC) ◦ Accounting – agent must account for all property, documents and money entrusted to them ◦ Confidentiality – agent is not allowed to use information that they have acquired from the principal in a way that would harm the principal � Failure to perform duties owed may result in prosecution and liability from Registration authorities and the Local Board

Duties Clients Owe Brokers � These duties are outlined in the Representation/Service Agreements ◦ Indemnification �Brokers are not responsible for any loss or damage during the period when a property is listed or sold, so long as they act in a lawful manner �If the agent acts without authority or in a manner that is unlawful, they will be held liable �For instance, if an agent constructs a house in a vacant plot that they have listed, they will be held liable �Indemnification in the Listing Agreement (Clause 7 of Form 200) now includes liability, loss, cost, claim, damage or injury that results from environmental problems or contamination

Duties Clients Owe Brokers ◦ Remuneration �Brokers are entitled to commission for the services they provide �Commission is to be paid once the property is sold �In case of an incomplete sale, commission is still to be paid if the reason for the sale not going through is default or negligence on part of the seller/buyer �The broker has a right to take commission from the deposit before they disburse the remaining funds to relevant parties such as the lawyers �The seller must pay the broker any commission that is payable if the Deposit is not sufficient to cover the whole cost �The seller agrees to pay tax on the commission that is payable to the broker