Designated Agency FAQs

What is designated agency?

Designated agency is a way for a brokerage to provide agency representation services to consumers, as an alternative to the traditional common-law agency model. In designated agency, the agreement to provide brokerage services is still between the brokerage and the consumer, but the agency relationship is strictly between the consumer and the 'designated agent’. The term designated agent refers to the named individual licensee(s) with whom the client has an agency relationship. In order to practice this form of agency, a brokerage must formally adopt this model by becoming a designated agency brokerage and thereby ceasing to be a common-law brokerage. Any broker interested in transitioning into designated agency must first contact the Nova Scotia Real Estate Commission.

Are there benefits of designated agency?

You decide. Arguably, consumers see their relationship as being with the individual licensee with whom they interact, so designated agency is consistent with consumer expectations. When properly practiced, it eliminates the conflicts of interest under common-law that arise when two licensees in the same brokerage represent the buyer and seller, in the same transaction.

In a common-law brokerage, two licensees may, for example, have an agency relationship with a seller and a buyer, respectively.If the buyer client were to decide to offer on the seller client’s property, the concurrent representation of two opposing parties in a single transaction would create an inherent conflict of interest, based on the principles of common law. Per the By-law, this would require a change in representative capacity to eliminate this conflict of interest since the brokerage is legally unable to provide sole agency representation to parties on competing sides of a transaction.

A licensee working under designated agency is the sole agent for each of their clients. Therefore, they are able to maintain that agency relationship, even in an “in-house” transaction, as long as both buyer and seller are represented by two different designated agents within the same brokerage.

As a result of these differences, the instances of concurrent representation conflicts of interest arising has the potential to be reduced when a brokerage adopts the designated agency model. This results in more clients being able to maintain full agency benefits from the licensees who represent them.

What happens if a buyer and seller in a single transaction are represented by two different designated agents, who are licensed by the same designated agency brokerage?

The buyer would have a Buyer Designated Brokerage Agreement (BDBA) with their designated agent and the seller would have a Seller Designated Brokerage Agreement (SDBA) with their designated agent. Each designated agent must maintain the confidentiality of their client’s information, act solely in their client’s best interests and provide full agency representation.

What happens if two or more buyers competing for the same property are represented by two different designated agents, who are licensed by the same designated agency brokerage?

The buyers would each have a BDBA with their respective designated agent. Each designated agent must maintain the confidentiality of their client’s information, act solely in their client’s best interests and provide full agency representation.

What happens if the same designated agent at a designated agency brokerage represents a buyer and seller in a single transaction?

As the designated agent of both the seller and the buyer, the licensee would owe conflicting duties of loyalty, confidentiality and representing best interests, to the seller and buyer. Accordingly, the designated agent would have to address and resolve the conflict of interest, per the Commission By-law before proceeding (especially before an offer can be prepared.)

I only intend to introduce my buyers to properties where my commission is paid by the seller. Is that okay?

No. The BDBA (as well as the common-law buyer brokerage agreement, “BBA”) and the Commission By-law require licensees to seek out and advise the buyer of available properties in the market area which may meet the buyer’s requirements, including those listed with other brokerages, those “for sale by owner” and all other available properties known to the licensee. Industry members who do not intend to introduce their buyers to;

a “For Sale By Owner” where the seller is not prepared to remunerate the buyer’s brokerage;
an exclusive listing with a brokerage that is not offering any cooperating brokerage commission; or
an MLS® listing where the cooperating brokerage commission being offered is less than the licensee is prepared to provide their services for (including Mere Postings);

must ensure that their signed BDBA (or BBA) reflects this limited representation. Without the written lawful instruction to not show such properties or represent their client in such circumstances, the designated agent may breach the By-law and their fiduciary duties to their client. It is imperative that licensees wishing to represent buyers reach a clear, written, understanding with their client at the start of their representation about compensation and the nature and extent of the services they are prepared to provide.

Remuneration expectations are laid out in the BDBA (or BBA) and any changes to the remuneration must be properly documented and authorized in a written amendment to that agreement.

How are privacy and confidentiality different under designated agency?

Under common-law agency, the service agreement and agency relationship is between the brokerage and the client. The agency obligation of client confidentiality—whether personal information, information relating to the service agreement or relating to a specific transaction—is owed at the level of the brokerage. The brokerage is responsible for keeping client information confidential from third parties, but not from other licensees within the brokerage. This means, even though a client may only deal with one specific licensee, the client’s file is theoretically available to all licensees in the brokerage, and the knowledge of the specific licensee is attributed by law to all other licensees in the brokerage. All licensees in a common-law brokerage are legally deemed to have the same knowledge of each client.

Under designated agency, the agency obligation of client confidentiality is owed at the level of the licensee acting as the designated agent. The brokerage is still responsible for keeping client information confidential when dealing with third parties. The brokerage must also ensure each licensee within the brokerage keeps their own clients’ information confidential from other licensees licensed within the brokerage who are not acting as designated agents for the same clients. The brokerage and the designated agent undertake that they will not disclose any confidential information concerning the client to any other designated agent at the brokerage unless authorized by the client or required by law. This responsibility also pertains to any unlicensed employee of the brokerage or designated agent.

I am a salesperson at designated agency brokerage and I need advice on a transaction. Can my broker give me advice?

Potentially. Brokers have obligations under the Commission’s By-law to supervise the activities of their licensees, which include ensuring the business of the brokerage is carried out competently. Despite the fiduciary obligations between the client and the designated agent established under designated agency, the broker still must comply with the By-law by adequately supervising the designated agents and ensuring the designated agents are compliant with the Act, Commission By-law and the brokerage’s policies.

In order to ensure you are simultaneously supervised and assisted, one of the following may take place;

The broker may provide hypothetical advice to broad questioning, while continuing to treat the interests of the seller and\or buyer in an even-handed and objective manner. If this option has any potential to create a conflict of interest with the broker the risk of conflict increases substantially in cases where the buyer and seller are clients of the brokerage to a particular trade.
The broker may assign an additional second designated agent to help represent the client. Again, if there is a potential conflict, the risk of conflict increases substantially.
The broker may advise if the designated agent(s) is violating a provision of the Act or a By-aw, and suggest they review specific sections of the appropriate legislation.

In each of these scenarios, the broker acts as a supervisor but can provide some assistance and advice regarding a transaction. Regardless of the approach, your duty of confidentiality to the client is paramount and you must take every action to ensure that their information is protected.

When must a seller or buyer sign an agency Agreement?

A Seller Designated Brokerage Agreement or Buyer Designated Brokerage Agreement must be signed as soon as an agency relationship occurs (after completing Form 100: Working with the Real Estate Industry and before preperation of an offer or giving advice). The seller/buyer must be given a true copy (original or identical copy of the original) of the signed SDBA/BDBA immediately upon signing and initialing.

In a designated agency brokerage, is it necessary to have written agency agreements with buyers, and which form do I use?

Yes. Designated agents representing buyers must have a Form 301: Buyer Designated Brokerage Agreement (BDBA) completed and signed by their buyer clients.

I am a designated agent with several buyer and seller clients. Are these my clients?

In designated agency, the agency relationship is between the designated agent and the clients, however contracts with clients and unrepresented parties are with the brokerage.

I work at a designated agency brokerage, and am changing brokerages. Can I take my clients with me?

In designated agency, the agency relationship is between the designated agent and the clients, however contracts with clients and customers are with the brokerage.

By-laws 705 and 706 requires brokers to have written contracts for the terms of engagements for individuals that intend to be licensed with their brokerage, including specficially documenting whether the brokerage will release consumers subject to service agreements that were entered into by the individual or team on behalf of the brokerage if the licensee eventually ceases to be licensed with the brokerage.

If the contract between you and your broker does not permit releasing consumers if you leave that brokerage, the broker will keep the consumers under contract and re-assign them to other licensees within their brokerage.

If you do have the ability to release those consumers from their contract with the original brokerage, you must also obtain consent from the client(s) and the receiving broker before transferring to the new brokerage.

If the transferring brokerage and the receiving brokerage practice the same agency model, the agency agreements can be assigned using Form 223: Assignment of Seller/Buyer Brokerage/Designated Brokerage Agreement. In these situations, a Form 223 is prepared for each client and is signed by the client and the old and new broker.

If the transferring brokerage and the receiving brokerage practice different agency models, the original brokerage agreement must be terminated (using Form 221: Temporary Withdrawal or Termination of Seller/Buyer Brokerage Agreement/Designated Brokerage Agreement) and a new brokerage agreement at the new brokerage with the appropriate agency model needs to be signed for each transferring client. Because of the differences in agency models, Form 223 cannot be used to assign client agreements. Before proceeding with the terminations, you must discuss the differences between the two agency models with each client to ensure they are comfortable working with a brokerage under the alternative model of agency.

You are only permitted to trade on behalf of the brokerage with which you are licensed. You must sever the client relationships with your clients before transferring to the new brokerage and once licensed with the new brokerage, enter those former clients into client relationships with the new brokerage.

If my brokerage changes agency models, do unrepresented parties need to sign new unrepresented party acknowledgements?

No. Changing agency models only impacts those in agency relationships (clients.) Non-agency relationships between licensees and unrepresented parties are the same under either agency model.

If my brokerage changes agency models, do I have to get new Agreements of Purchase and Sale/amend existing Agreements?

No. The agency disclosure in the Agreement of Purchase and Sale would be the same for licensees in either agency model.

If I am in a designated agency brokerage, who can take care of my clients if I am sick or away on vacation?

With the seller’s/buyer’s written consent, the broker may designate another licensee to act on the buyer’s/seller’s behalf for the period of time you are away (or otherwise unavailable). The replacement licensee must be added to the SDBA or BDBA by a written amendment signed by the client and both licensees. The replacement licensee then becomes part of the designated agent for the client. Their agency relationship with the client can be severed at the end of the period for which it is required, providing the amendment to the brokerage/designated brokerage agreement reflects a specific time-period, or the designated brokerage agreement is again modified by written amendment. The termination of the replacement licensee’s agency relationship does not relieve them of their duty of confidentiality to the seller/buyer even after their agency relationship is severed.

Does a client have to be notified and provide a signature to authorize a replacement (or additional) licensee to become their designated agent?

Yes. The client must consent in writing to all changes to the SDBA or BDBA , using an amendment to the seller or buyer designated brokerage agreement.

Must a licensee who hosts an open house for the seller’s designated agent always become a designated agent for the seller?

Yes, though that relationship may be severed later (as noted above). If the seller’s designated agent cannot be present at an open house, they may, with the seller’s written consent, have another licensee “host” the open house. As noted above, the replacement licensee must be included on the SDBA, or added (even for a short period of time) using an amendment to the seller/designated brokerage agreement in order to become part of the designated agent and be deemed to act on behalf of the seller.

Why is there a difference between what teams are required to do under common-law and under designated agency?

Under common-law agency, the agency relationship is between the client and the brokerage. All licensees within the brokerage represent the clients of brokerage and are deemed to know all relevant information about those clients. For example, when any licensee at a common-law brokerage takes a listing, every licensee at the brokerage is immediately considered to be a representative of that seller and owes that seller undivided loyalty, advice and advocacy.

When it comes to teams under common-law, team members can freely share information about brokerage clients amongst themselves, because licensees at common-law brokerages have always been free to share information about brokerage clients.

Under designated agency, agency relationship is between the client and the designated agent specified in the brokerage agreement only. Unlike under common- law agency, when any licensee at a designated agency brokerage takes a listing, only the licensee specified in the brokerage agreement as the designated agent represents the seller and owes that seller undivided loyalty, advice and advocacy. It is the brokerage’s responsibility to put policies and procedures in place to protect the confidential information of all brokerage clients and ensure the designated agent does not communicate any of the client’s confidential or sensitive information to other licensees of the brokerage. This is why a designated agency brokerage can represent a buyer and a seller in a single transaction with full agency representation to both parties.

As broker, what documents do I need in place for each team operating with my brokerage?

You must create a written brokerage/team contract for each team and their respective team members. The brokerage/team contract must state the team name, that the team members agree to work together on the team as one designated agent and identify which team members can sign a real estate service agreement (i.e. SDBA) on behalf of all other members on the team. The brokerage/team contract must be signed and dated by each member of the team and the broker. Maintain the brokerage/team contract as long as the team operates at your brokerage. If there are any change to the team, a new brokerage/team contract must be completed.

Do the names of all team members have to be included as the designated agent on designated brokerage agreements?

Yes. The licensed names of all members of the team must be inserted in the space provided in designated brokerage agreements. Where there are space considerations, additional names must be provided on an attached Schedule. While all members of the team must be listed as the designated agent, any single member of the team may execute documents on behalf of the brokerage (i.e. all members of the team are not required to sign the document), providing the brokerage maintains a signed team agreement that indicates who has the authority to bind the team.

What if I am part of a large team and there isn’t enough room on the brokerage designate section?

You must write the name of your team and followed by an attachment reference. The attachment to the service agreement must be a written document (i.e. schedule or addendum) that clearly identifies all the members of your team.

Can a single member of a team be appointed as the designated agent of a buyer or seller?

No. As team members share, or are deemed to share, confidential information of their clients, all members of the team must be listed as the designated agent of any buyer or seller represented by the team or any of its members. Where both the buyer and the seller are being represented by the team as the designated agent, they must agree to the team limiting its agency obligations in transaction brokerage. Teams cannot "split up" in an effort to avoid conflicts of interest.

If a designated agency relationship has already been established with one party but has not yet been established with the other party, there is also the option of all team members being the designated agent for the first party, and all team members treating the second party as an unrepresented party.

Who is required to sign service agreements and related documents that I prepare (i.e. amendments to seller/buyer designated brokerage agreements)?

If your brokerage/team contract identifies you as being authorized to sign service and service-related agreements on behalf of your team, you must sign them. If you are not identi ed as a team member who can sign on behalf of a team, another team member who has signing authority must sign agreements that you prepare.

When I am preparing service agreements and service-related agreements, how do I fill out the section that identifies who the brokerage designates?

You must write in all the names of the licensees on the team and the team name.

When I prepare an agreement of purchase and sale for a buyer, how do I complete the agency relationship disclosure section of that agreement?

You write in your brokerage name, your name and your team’s name.

Whose name do I write in the agency relationship section for the seller if they are represented by another brokerage?

If the property is listed on MLS® and is not a mere posting, you write the other brokerage’s name, the licensee(s) identified with the listing and the team name, if applicable.

If I have an unlicensed assistant, are we a team and can we advertise as a team?

No, and no. Unlicensed assistants are not counted as team members. Unlicensed assistants cannot advertise directly or indirectly in real estate.

I want to advertise as being part of a team, but also on my own. Is this okay?

No. You are on team or you are an individual. You cannot be both. All advertising must identify your team, including, but not limited to, business cards, print advertising, digital advertising, social media, for sale signs, etc.

Can my team have a team logo and can I advertise using that logo?

Yes, but your team logo/name cannot appear larger than the brokerage name in any advertising. Your team logo/name must be the same size as or smaller than the brokerage name in all advertising. The team name/logo cannot appear to be a brokerage.

Our advertising has our team picture. Is that okay?

If your advertising contains a team photo, you must identify each person in the picture.

Our For Sale signs and business cards contain our team name, but are individualized for each person with their own picture, name and phone number. Is that okay?

Yes, providing the brokerage name and team name appear, with the brokerage name prominent.

Who approves my team name/logo?

Brokers are responsible for approving all team names, logos and all advertising.

Another licensee and I want to advertise our services jointly to save money. Does this make us a team?

No. Not unless your advertisement makes you and the other licensee appear;

to be working together to provide real estate services,
to be a single entity, and
under a collective name, like team or group.

I am not part of a team. What do I need to know about co-advertising?

Licensees do not have to be a team to co-advertise; however, designated agency places additional obligations on licensees to safeguard client information, including designated agency information barriers. Co-advertising must comply with the requirement for each designated agent to have a dedicated phone number, email address and fax number, which means advertisements and websites must display individual contact information for each licensee engaging in co-advertising. As with all advertising, make sure you have your broker review and approve the ads.

My For Sale sign has my brokerage name and my team name on it. Can I add a rider to the sign that has my name on it?

Yes.

If I am on a team and we advertise together, may we list individual phone numbers for each team member in the advertisement?

Yes

How does designated agency apply to a co-listing between two different brokerages?

In a scenario where two industry members at different designated agency brokerages co-list a property, only the specified designated agents are representing the seller. If a prospective buyer was represented by either one of the designated agents, the conflict of interest must to be resolved per the By-law (refer out, treat one party as an unrepresented party or transaction brokerage.)

Within a designated agency brokerage, if a licensee lists their own property with another licensee within the same brokerage, can a third licensee at the brokerage act as the designated agent of a prospective buyer client?

Yes. Within a designated agency brokerage, if a licensee (#1) lists their own property with another licensee (#2) within the same brokerage, a third licensee (#3) at the brokerage can act as the designated agent of a prospective buyer client.

Under the designated agency model, licensee #1 (the seller) and #2 cannot share confidential information with licensee #3 (who represents the buyer) or vice versa.

Due to the sensitive nature of this type of transaction, brokerages and their licensees should proceed with caution and ensure that the buyer is fully aware of the unique situation. Licensee #1 (the seller) will be required to provide the usual written disclosure of their interest in the trade to the buyer, and of their licence status, when presenting the offer.

The latter also applies where a licensee wishes to purchase a property listed by their brokerage where another licensee is representing an (unlicensed consumer) seller.

If I am representing a buyer, does it have to be an exclusive right to represent?

No. A buyer may choose to have a non-exclusive contract (or open contract). Such an arrangement must be clearly documented in the BDBA.

We are married designated agents who are not a team and do not co-list. Can this work?

Yes, provided each licensee takes every action to ensure the client’s confidentiality is protected. For example, if husband and wife represented both sides of a transaction it would be difficult to represent. You would have to assess every situation to ensure you are not in a perceived conflict.

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