Why things go wrong … and how to prevent it

Keep learning. Mistakes happen when… you don’t know the law, regulatory requirements or best practices. It’s your responsibility to know the law, regulatory requirements or best practices in your field of practice. We’ll go through some examples of the types of claims that have been made and reported to E&O and review how to prevent similar claims from happening to you.

Claim example: A licensee told a buyer that if she changed her mind for any reason after entering into a contract, she didn’t have to remove subject clauses and she would get her deposit back. Why is this incorrect?

The law: The law implies as a term of the contract that the party with the benefit of the subject clause must act fairly, honestly, and in good faith to satisfy the subject.

Claim example: A licensee failed to ensure the contract set out the agreement on GST when GST applied. What should the licensee have done?

Contract should be clear. If GST applies, the agreement should indicate if GST is included in the purchase price or is in addition to the purchase price.

Claim example: A licensee received a deposit prior to the deadline in the contract and held on to it instead of delivering it to his brokerage. Why is this wrong?

The law: S.27 of RESA says that licensees must promptly pay or deliver to their brokerage “all money held or received from, for or on behalf of a principal in relation to real estate services…”

Keep learning. It’s your responsibility to keep up to date: Office meetings, RECBC and E&O Risk Report articles (online) Keep current on regional or specialized topics.

Recognize your expertise. Mistakes happen when… you step outside your area of expertise.

Claim examples: Giving incorrect advice on how GST is calculated and paid Reviewing engineering plans and giving incorrect advice on suitability for development

Don’t step outside your expertise. If you don’t know, say so. Recommend clients get expert advice. Document your recommendation.

Track dates and deadlines. Mistakes happen when…. You don’t have a system in place to record and monitor important dates and deadlines.

Claim example: Missing or miscalculating the subject removal deadline How can the licensee prevent this?

Set up a diary system. Set up a system for managing deadlines. Use checklists.

Communicate. Mistakes happen when…. you don’t communicate important information to the person stepping into your shoes.

Claim example: Property manager failed to leave written records for successor. What should the licensees have done?

Record and share knowledge. Especially important when person in charge changes over time (ex. property management)

Record and share knowledge. If someone else is looking after your business for you while you are away, do they have all the information they need? Keep records and leave for successor.

Check the details. Mistakes happen when you …. rush don’t double check make assumptions.

Claim examples: Failing to ensure a back-up offer included a backup clause Wrong completion date

Claim examples: Failing to present all offers Sending subject removal to wrong email

Notice the details. Slow down; read carefully. Double-check. Proofread. Don’t assume!

Know your product. Mistakes happen when… you don’t know your product.

Claim examples: Missing restrictions on title Not knowing who was on title to a property

Claim examples: Selling a manufactured home without a valid CSA sticker

Know your product. Review title. Use RECBC listing checklist. Know rules for specialized properties.

Set up/ follow office procedures. Mistakes happen when…. the brokerage doesn’t have a good system of policies and procedures in place.

Claim examples: Improper handling of deposit cheque Failing to properly communicate receipt of legal documents

Set up/ follow office procedures. Create manuals and procedures. Train all staff. Staff members only do what they’re qualified and authorized to do.

Questions? Thank you.