Section 30 Real Estate Act #78
CATEGORY: Legally Speaking
TAGS: Commission Court of Appeal Real Estate Act REALTOR® Licensing Residential Tenancy
By Gerry Neely
This is the section that prohibits payment of any commission or other compensation to any unlicensed person for "acting or attempting or assuming to act, as an agent or salesman."
BCREA has been asked whether payment of a tip for a tip that leads to a listing, is a breach of Section 30. This involves the $100.00 payment, or a bottle or case of scotch or the dinner you bought the member of your breakfast information club who provided you with the name of the couple who purchased your listing, or the 25% of a commission which a hardnosed business associate says he wants if the information he gives you results in a sale? Are these breaches of Section 30?
There do not appear to be any reported decisions dealing with this section. I have been told that there was a case a few years ago in which a licensee was charged with an offence under this section of the Act and was acquitted. Perhaps someone reading this column may be able to provide me with sufficient details about the case to reveal the facts which appeared to constitute the offence.
An Alberta prosecution dealt with a man whose business consisted of obtaining from a number of sources a referral list of residential properties for rent in the Edmonton area. This information was available to a customer who paid a fee. The accused did not show any properties, did not negotiate any terms or rental and did not act as a rental agent. He supplied information only and his fee was not dependent upon whether the customer was able to lease any premises. On the basis of these facts, the businessman was charged with an offence under the Alberta Real Estate Agents Licensing Act which is similar to the Real Estate Act. The offence was that he unlawfully traded in real estate without being licensed. He was convicted but on appeal the Alberta Court of Appeal acquitted him holding that he neither acted as an agent nor held himself out as an agent. Merely supplying information for his own profit was not an offence.1
This case provides some guidance as to how a B.C. Court might (not will) interpret Section 30 to decide that it is not an offence for a licensee to pay some compensation to an unlicensed person for the name of a prospective vendor or purchaser. It will be argued that merely providing information is not an action that brings the unlicensed person within the definition of an agent or a salesman licensed under the Real Estate Act.
In 1955 the Saskatchewan Court of Appeal held that the action of an unlicensed employee of a real estate agent who took a listing brought that transaction within the definition of an act done by a salesman. The result was that the contract for which the agent was suing for commission was illegal and no commission was recoverable. This was the first case in Saskatchewan to decide what acts a licensed salesman had to perform. It was argued that the act of taking the listing was merely a clerical function. The Court said that for this argument to succeed, a licensed salesman must have first seen, interviewed or talked to the owner before the physical act of writing up the listing by an unlicensed employee became only a clerical function.
This case indicates where the risk of a breach of Section 30 may arise. That is, where the delivery of the information is also accompanied by work done by the unlicensed person which would be held to be acts that an agent or salesman would do. The obvious example would be payment of a portion of the commission to an unlicensed person who actively assists the licensee in the sale of the listed property.
A trifling payment in cash or kind is unlikely to create a problem and an educated guess suggests that even payment of a substantial sum for information only, will be held not to be a breach of Section 30. Until that section is interpreted by a Court whose decision sets a precedent, licensees can only rely upon their common sense and good judgment to decide whether they are at risk from a proposal made by an unlicensed person for compensation in return for information.
Regina v. Clarke, (1973) 3 W.W.R. 666.
Prince Albert Properties and Land Sales Ltd. v. Kushneryk, (1955) 5 D.L.R. 458.
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