Brokerage Office Business Practices

Published on 22 January, 2020

Mature woman standing and smiling with her team behind her.

Advertising

As required by section 4-6 of the Rules, the licensee name of the brokerage must be displayed in a prominent and easily readable way in all real estate advertising.

If real estate advertising identifies a managing broker, associate broker or representative, this must be done:

(a) if that person is an individual, by using the licensee name of the individual, or

(b) if that person is a personal real estate corporation or a controlling individual of a personal real estate corporation, by using the licensee name of the personal real estate corporation only.

If real estate advertising includes an office address for the licensee, this must be the address of the related brokerage office.If RECBC approves a team name for a group of related licensees, real estate advertising may also identify the group by this team name.

Brokerage Offices

As set out in Brokerage Operations, other than in very limited circumstances, the head office or branch office of the brokerage must be situated in commercial premises.

Changes in Partnerships

Section 2-14 of the Rules provides that when a brokerage licence is issued to a partnership, the licence is specific to the partnership as it exists at the time of application. If there is any change in the partners, the brokerage licence is cancelled effective 14 days after the change, unless RECBC has permitted a longer period for the brokerage licence to be effective.

Changes in Information

During the licensing period, a brokerage may change a variety of things, from its name to the financial institution at which it conducts business. When certain information is changed, the licence of the brokerage may need to be amended. However, even when the licence will not be amended, the Rules still require that RECBC be advised of the various changes in information. Brokerages and licensees should be aware of these requirements and advise RECBC accordingly.

Brokerage Name and Address Changes

 

If a brokerage changes its name or business address, the brokerage licence must be changed. To change the brokerage’s name or address, the following procedures must be completed:

  • Obtain approval from RECBC regarding the intended name change prior to registering the name change with the B.C. Corporate Registry. If using a trade or franchise name, it must also be registered with the BC Corporate Registry prior to RECBC’s records being amended. In order to assist applicants, RECBC requests that applicants complete and submit the Request for Brokerage Name Approval, available on the website at www.recbc.ca;
  • Submit a Request for Brokerage Name Change form, accompanied by the appropriate fee;
  • Return the existing brokerage licence certificates to be amended. All licensed offices of the brokerage must have their licences amended in the case of a name change. Certificates of related licensees are not required to be amended;
  • In the case of an address change, submit a copy of the city or municipal business licence;
  • In the case of an address change, submit a Request for Brokerage Address Change form and provide written confirmation that the business address is in a commercial location. Alternatively, if the brokerage is moving to a residential office, the applicant must provide evidence satisfactory to RECBC:
  • That the local government bylaws applicable to the residence permit the brokerage to conduct business from the residence; and
  • Of any restrictions established by local government bylaw limiting the persons who may conduct business from the brokerage office.
 

RECBC permits both corporations and individuals to do business under a name other than their legal name. Brokerages are reminded that RECBC must approve both the legal name and trade name of the brokerage and the names must be registered with the B.C. Corporate Registry. The licence certificates will reflect both the legal name and the trade name.

Once a trade name has been approved by RECBC and registered with the BC Corporate Registry, that trade name becomes the licensee name of the brokerage for the purposes of RESA. The legal name and the trade name of the brokerage are both shown on the brokerage’s licence certificate, however the Rules require that the brokerage’s licensee name (the trade name) be clearly indicated in the course of providing real estate services (section 4-5) and be displayed in a prominent and easily readable way in all advertising published by any of its related licensees (section 4-6).

 

It should also be noted that section 27  — will open in a new tab of the Business Corporations Act contains certain requirements regarding the use of a company’s legal name. Brokerages should seek legal advice as to the how these obligations are to be incorporated into their business activities.

 

If, after licensing, a brokerage decided to use a trade name rather than the legal name under which it was licensed, the trade name would have to be approved by RECBC and registered with the BC Corporate Registry. The real estate licence of the brokerage and any branch offices would then have to be amended.

 

If, after licensing, a brokerage intends to operate under a franchise arrangement, the licence must be amended before operating under a franchise name.

 

Brokerages associated under a franchise agreement may all share a common part of their names (i.e. that part which identifies them as franchisees). However, franchisee brokerages must be readily identifiable by their full name or trade name.

 

The franchise name must be approved by RECBC and registered with the BC Corporate Registry. RECBC may require a copy of the licensing agreement or “consent for use of name” from the franchisor. If a brokerage entered into a franchise agreement after the brokerage licence was issued, the brokerage’s licences would then have to be amended to reflect the change in name.

See the Real Estate Licensing Guidelines for additional information.

 

Notice of Brokerage Business Changes

Section 2-22 of the Rules requires a brokerage to promptly notify RECBC in writing of the following changes. Notification is required even though the change does not require an amendment to the brokerage licence:

  • a change in the telephone number, fax number or email address of a brokerage’s head office or branch office;
  • if any related managing broker, associate broker or representative ceases to be engaged by the brokerage and the reasons for this;
  • in the case of a brokerage that is a partnership:
  • any change in the partners and whether, as a result of licence cancellation of the licence because of the change in partners, an application for a new brokerage licence is intended to be made;
  • any change in the nature of the partnership, such as registration as a limited liability partnership;
  • in the case of a brokerage that is a corporation:
  • any change in the directors or officers of the corporation; or

any fundamental change to the corporation, such as an amalgamation or continuation;

  • NOTE: If a new director or officer has been elected or appointed, within 30 days after the election or appointment the brokerage must submit to RECBC a “Director, Officer or Partner Information” form for each new director or officer. The Director, Officer or Partner Information form is contained on RECBC’s website at www.recbc.ca
  • a change in the end date of the brokerage’s fiscal year;
  • a change in the savings institutions, or branch location of a savings institution, at which the brokerage maintains accounts.

Changes of Licensee Information

A licensee must provide a mailing address to RECBC and must promptly deliver a notice to RECBC if the mailing address changes.

As required by section 2-21 of the Rules, a licensee must promptly notify RECBC in writing if:

  • The licensee is subject to a disciplinary or regulatory proceeding in which the licensee may have or has been made subject to a disciplinary sanction (which includes a warning, reprimand, fine, educational requirement, imposed restriction or condition, suspension, cancellation or any other sanction) either in British Columbia or elsewhere under legislation relating to:
    • real estate activities;
    • insurance activities;
    • securities activities;
    • mortgage brokers;
    • accountants;
    • notaries; or
    • lawyers.
  • The licensee has any court order or judgment made against the licensee in relation to:
    • real estate services;
    • a dealing in insurance, mortgages or securities; or
    • misappropriation, fraud, or breach of trust.
  • Any business that the licensee owns, or of which the licensee has been a director, officer or partner at any time during the past two years has any court order or judgment made against the business in relation to:
    • real estate services;
    • a dealing in insurance, mortgages or securities; or
    • misappropriation, fraud, or breach of trust.
  • The licensee is charged with or convicted of an offence under a federal or provincial enactment or under a law of any foreign jurisdiction, excluding:
    • highway traffic offences resulting only in monetary fines or demerit points, or both; and
    • charges initiated by a violation ticket as defined in the Offence Act or by a ticket as defined in the Contraventions Act (Canada)
  • The licensee is the subject of any bankruptcy, insolvency or receivership proceedings.
  • Any business that the licensee owns, or of which the licensee has been a director, officer or partner at any time during the past two years, is the subject of any bankruptcy, insolvency or receivership proceedings.

In addition to providing notice, the licensee must provide the particulars of the matter and any other additional information required by RECBC. The notice provided to RECBC by the licensee must also be provided to the licensee’s managing broker.

Creating Team Names

A group of licensees, who are engaged by the same brokerage and who work together to provide real estate services, may ask RECBC to approve a team name which may be used in advertising. RECBC will not approve a name which might give the impression of being an incorporated company or a real estate brokerage. The team name must be approved by RECBC before it is used in any form of real estate advertising. Licensees wishing to create a team must first provide the following information to the RECBC’s Licensing Department:

  • the proposed name of the team;
  • the names of all related licensees who will be members of the team; and
  • the names of all unlicensed people who will be working directly as part of the team.

Sound Financial Circumstances

Section 2-11 of the Rules requires that an applicant for a brokerage licence must satisfy RECBC that the applicant is in sound financial circumstances. This requirement is clarified in section 4-4(3)(g) of the Council Bylaws which requires that an applicant for a brokerage licence must provide evidence of unimpaired working capital of an estimate of the operating and capital expenditures of the brokerage for the first three months of operation plus an additional $5,000.00.

Each year, the financial statements for the brokerage must be submitted to RECBC with the Accountant’s Report. RECBC will consider whether the brokerage continues to be in sound financial circumstances.Additionally, each brokerage is obligated under section 2-20 of the Rules to advise RECBC if, during any year, the brokerage is unable to pay its debts as they come due.

Licensee Suspension/Cancellation Procedure

(a) When the licence of an individual (representative, associate broker, or managing broker) is suspended, the licensee must cease all licensed activity for the period of the suspension. A licensee may attend the office during the terms of the suspension. However, he/she must not:

  • be involved in any listing, selling, or management activity (including managing broker activities);
  • host open houses or solicit sellers, buyers, landlords, or tenants in any manner;
  • provide advice or guidance to a consumer with regards to a listing contract, property management contract, or a Contract of Purchase and Sale;
  • meet with owners to obtain new listing or property management contracts;
  • present or negotiate offers;
  • enter into a rental contract on behalf of the brokerage;
  • communicate with consumers about any real estate transaction or service agreement;
  • present or negotiate an offer or any form of service agreement; or
  • perform any other activity for which a licence under the Act is required.

The suspended licensee must cease and remove all advertising during the term of the suspension. This includes, but is not limited to the following: real estate lawn signs, TV ads and/or channels, radio ads, bus shelters/benches, newspaper/magazine ads, sponsorship materials and signs, billboards, stadium/arena signs and automobile signs. In addition, all websites, web pages and any other online representation, promotion or solicitation must be disabled during the term of the suspension. For more information, see What to Do, and Not Do, If Your Licence is Suspended (Report from Council, December 2014).

Prior to the suspension of a representative/associate broker taking effect, the related brokerage must contact all clients/unrepresented parties of the licensee who is to be suspended and explain how the related brokerage intends to comply with the listing/service agreements.

Where the brokerage assigns listings or service agreements to another licensee, it would be an internal management decision as to whether any related commission or fee should be paid to the suspended licensee.

If the suspended licensee is the only managing broker for a real estate brokerage and a managing broker is not licensed to replace the suspended managing broker, the office must close for the duration of the suspension or until a replacement managing broker is licensed [see (b) and (c)]. Note: In some situations where a managing broker’s licence is suspended, that person may be allowed to be licensed as an associate broker or representative. Whether this person remains unlicensed or becomes licensed as an associate broker or representative during the suspension period, that person may not perform, nor may they accept the delegation of any duties or obligations of a managing broker (as outlined in section VI of this manual) during the suspension period.

(b) When the licence of a brokerage is suspended, the head office and any brokerage/branch office including kiosks must close for the period of suspension:

  • All activity requiring a real estate licence must cease.
  • All clients/unrepresented parties of the brokerage (including those of all licensee employed by the brokerage) must be advised in writing of the suspension.
  • All licensees licensed to the suspended brokerage become inoperative for the term of the suspension unless they transfer to another brokerage.
  • All advertising in the media must cease (including contract ads). The suspended brokerage must cease and remove all advertising during the term of the suspension. This includes, but is not limited to the following: real estate lawn signs, TV ads, and/or channels, radio ads, but shelters/benches, newspaper/magazine ads, sponsorship materials and signs, billboards, stadium/arena signs and automobile signs. In addition, all websites, web pages and any other online representation, promotion or solicitation must be disabled during the term of the suspension.
  • All real estate signs must be removed.
  • The brokerage, during the term of the suspension, must continue to fulfill the obligation of disbursing funds, as required, from the trust account.

(c) When the licence of a brokerage/branch office is suspended

  • All activity of the brokerage/branch office requiring a real estate licence must cease.
  • Prior to the suspension, advise all clients/unrepresented parties of the suspension and determine if listing/service agreements are to be transferred to the head office, to another brokerage, or are to be cancelled.
  • All licensees licensed at the suspended brokerage/branch office become inoperative for the term of the suspension unless they transfer to another office.
  • All advertising in the media must cease (including contract ads).
  • All real estate signs that refer to the suspended brokerage/branch office must be removed.

For more information, see Suspended: Brokerage Licence Suspensions and What They Mean to You (Report from Council, October 2014).

[updated 06/15/2018]