Mandatory agreements coming to real estate transactions in Alberta
The process of buying or selling a home in Alberta will soon change as a result of new rules instituting mandatory written service agreements between consumers and real estate professionals.
The agreements, which take effect July 1, have long been a standard in the industry. The move by Alberta
real estate’s governing body to make them mandatory comes from the desire to increase clarity and protection
for consumers, said Kevin Clark, chair of the Real Estate Council of Alberta (RECA).
“The primary reason why RECA is introducing written service agreements between residential real estate
professionals and all clients is to ensure clients are informed about, and understand, what they can and should expect from their relationship with their authorized industry professional. When clients are better informed, there will be less confusion and fewer disputes,” he said.
By making the change, RECA said it hopes to improve the relationship between consumers and REALTORS® by better explaining the services to be provided by the brokerage, as well as the obligations and responsibilities of the parties involved.
Since the agreements put to paper what was previously often agreed to verbally, sellers – and, more specifically, buyers – stand to gain a better understanding of the process, as well as lessen any possibilities of confusion or disputes, added Clark.
“While some buyers say they have an understanding of an agreement on what their real estate professional
will do on their behalf and what services would be provided, those understandings or agreements have typically been verbal,” he said.
“For the average buyer, it means they will be asked to sign a written service agreement – a buyer representation
agreement. They can continue to receive the services from their real estate representative that they would
expect as a buyer; only now the written agreement will make sure they have greater clarity of their real estate
professional’s role and responsibilities, and their own obligations.”
As part of the new agreements, buyers and sellers will also agree on the personal information that can be collected, shared and distributed as part of the transaction, including access to credit reports. The agreements
also set out the fee structure real estate transactions.
While the move toward the new agreements has been in the works since last September, CREB® president
Bill Kirk believes more could have been done to inform buyers and sellers in the province of the impending
changes and how they will be affected.
“In theory, there are some benefits to consumers, but the reality is that RECA needs to do more to explain the
benefits of this regulatory change to consumers,” said Kirk.
“In this situation, we ask consumers and REALTORS® to understand the presentation of these forms is a
regulator’s mandate with which we must comply. In any event, this new process may be an opportunity for
our members to talk to their clients about the value they bring to a real estate transaction.”