| In any Listing Agreement there is a point in time | | | | court proceedings. |
| when the agency relationship ends. | | | | The real estate brokerage, on the other hand, |
| A Listing Agreement, as it is widely known, is | | | | took the position that any duty of confidentiality |
| none other than a contract between the rightful | | | | arising from the agency relationship ended with |
| titleholder of an interest in land (the 'Principal') and | | | | the expiration of the Listing Agreement. The firm |
| a duly licensed real estate firm (the 'Agent'), | | | | argued, moreover, that even if there was a duty |
| whereby the firm stipulates and agrees to find a | | | | of continuing confidentiality such duty would not |
| Buyer within a specified timeframe who is ready, | | | | preclude or otherwise limit the evidence that the |
| willing and able to purchase the interest in land | | | | real estate brokerage would be compelled to give |
| that is the subject matter of the contract while | | | | under a subpoena or in a process under the Rules |
| acting within the realm of the authority that the | | | | Of Court. And, finally, the realty company pointed |
| Principal confers onto the Agent, and wherein | | | | out that there is no such thing as a realtor-client |
| furthermore the titleholder stipulates and agrees | | | | privilege, and that in the instant circumstances the |
| to pay a commission should the licensee ever be | | | | Seller could not have prevented the firm from |
| successful in finding such Buyer. | | | | giving evidence in the lawsuit. |
| As in all contracts, there is implied in a Listing | | | | The Real Estate Council did not accept the line of |
| Agreement an element which is commonly know | | | | defence and maintained that there exists a |
| at law as an 'implied covenant of good faith and | | | | continuing duty of confidentiality, which extends |
| fair dealings'. This covenant is a general | | | | after the expiration of the Listing Agreement. |
| assumption of the law that the parties to the | | | | Council ruled that by providing the Affidavits both |
| contract - in this case the titleholder and the | | | | the brokerage and the two licensee had breached |
| licensed real estate firm - will deal fairly with each | | | | this duty. |
| other and that they will not cause each other to | | | | The attorney-client privilege is a legal concept that |
| suffer damages by either breaking their words or | | | | protects communications between a client and the |
| otherwise breach their respective and mutual | | | | attorney and keeps those communications |
| contractual obligations, express and implied. A | | | | confidential. There are limitations to the |
| breach of this implied covenant gives rise to | | | | attorney-client privilege, like for instance the fact |
| liability both in contract law and, depending on the | | | | that the privilege protects the confidential |
| circumstances, in tort as well. | | | | communication but not the underlying information. |
| Due to the particular nature of a Listing | | | | For instance, if a client has previously disclosed |
| Agreement, the Courts have long since ruled that | | | | confidential information to a third party who is not |
| during the term of the agency relationship there is | | | | an attorney, and then gives the same information |
| implied in the contract a second element that | | | | to an attorney, the attorney-client privilege will still |
| arises out of the many duties and responsibilities | | | | protect the communication to the attorney, but |
| of the Agent towards the Principal: a duty of | | | | will not protect the information provided to the |
| confidentiality, which obligates an Agent acting | | | | third party. |
| exclusively for a Seller or for a Buyer, or a Dual | | | | Because of this, an analogy can be drawn in the |
| Agent acting for both parties under the provisions | | | | case of a realtor-client privilege during the |
| of a Limited Dual Agency Agreement, to keep | | | | existence of a Listing Agreement, whereby |
| confidential certain information provided by the | | | | confidential information is disclosed to a third party |
| Principal. Like for the implied covenant of good | | | | such as a Real Estate Board for publication under |
| faith and fair dealings, a breach of this duty of | | | | the terms of a Multiple Listings Service |
| confidentiality gives rise to liability both in contract | | | | agreement, but not before such information is |
| law and, depending on the circumstances, in tort | | | | disclosed to the real estate brokerage. In this |
| as well. | | | | instance the privilege theoretically would protect |
| Pursuant to a recent decision of the Real Estate | | | | the confidential communication as well as the |
| Council of British Columbia ( , the regulatory body | | | | underlying information. |
| empowered with the mandate to protect the | | | | And as to whether or not the duty of |
| interest of the public in matters involving Real | | | | confidentiality extends past the termination of a |
| Estate, a question now arises as to whether or | | | | Listing Agreement is still a matter of open debate, |
| not the duty of confidentiality extends beyond | | | | again in the case of an attorney-client privilege |
| the expiration or otherwise termination of the | | | | there is ample legal authority to support the |
| Listing Agreement. | | | | position that such privilege does in fact extend |
| In a recent case the Real Estate Council | | | | indefinitely, so that arguably an analogy can be |
| reprimanded two licensees and a real estate firm | | | | inferred as well respecting the duration of the |
| for breaching a continuing duty of confidentiality, | | | | duty of confidentiality that the Agent owes the |
| which the Real Estate Council found was owing to | | | | Seller, to the extent that such duty extends |
| the Seller of a property. In this case the subject | | | | indefinitely. |
| property was listed for sale for over two years. | | | | This, in a synopsis, seems to be the position |
| During the term of the Listing Agreement the | | | | taken by the Real Estate Council of British |
| price of the property was reduced on two | | | | Columbia in this matter. |
| occasions. This notwithstanding, the property | | | | Clearly, whether the duty of confidentiality that |
| ultimately did not sell and the listing expired. | | | | stems out of a Listing Agreement survives the |
| Following the expiration of the listing the Seller | | | | termination of the contract is problematic to the |
| entered into three separate 'fee agreements' with | | | | Real Estate profession in terms of practical |
| the real estate firm. On all three occasions the | | | | applications. If, for instance, a listing with |
| Seller declined agency representation, and the firm | | | | Brokerage A expires and the Seller re-lists with |
| was identified as 'Buyer's Agent' in these fee | | | | Brokerage B, if there is a continuing duty of |
| agreements. A party commenced a lawsuit as | | | | confidentiality on the part of Brokerage A, in the |
| against the Seller, which was related to the | | | | absence of express consent on the part of the |
| subject property. | | | | Seller a Realtor of Brokerage A could not act as |
| The lawyer acting for the Plaintiff approached the | | | | a Buyer's Agent for the purchase of the Seller's |
| real estate firm and requested that they provide | | | | property, if this was re-listed by Brokerage B. All |
| Affidavits containing information about the listing | | | | of which, therefore, would fly right in the face of |
| of the property. This lawyer made it very clear | | | | all the rules of professional cooperation between |
| that if the firm did not provide the Affidavits | | | | real estate firms and their representatives. In |
| voluntarily, he would either subpoena the firm and | | | | fact, this process could potentially destabilize the |
| the licensees as witnesses to give evidence | | | | entire foundation of the Multiple Listings Service |
| before the Judge, or he would obtain a Court | | | | system. |
| Order pursuant to the Rules Of Court compelling | | | | In the absence of specific guidelines, until this |
| the firm to give such evidence. The real estate | | | | entire matter is clarified perhaps the best course |
| firm, believing there was no other choice in the | | | | of action for real estate firms and licensees when |
| matter, promptly complied by providing the | | | | requested by a lawyer to provide information that |
| requested Affidavits. | | | | is confidential, is to respond that the brokerage will |
| As a direct and proximate result, the Seller filed a | | | | seek to obtain the necessary consent from the |
| complaint with the Real Estate Council maintaining | | | | client and, if that consent is not forthcoming, that |
| that the information contained in the Affidavits | | | | the lawyer will have to take the necessary legal |
| was 'confidential' and that the firm had breached a | | | | steps to compel the disclosure of such |
| duty of confidentiality owing to the Seller. As it | | | | information. |
| turned out, the Affidavits were never used in the | | | | |