An Alberta real estate agent discovers their brokerage is also the property manager for a building where they are showing units to buyers. What disclosure is required?

Q: What is the correct answer to: An Alberta real estate agent discovers their brokerage is also the property manager for a building where they are showing units to buyers. What disclosure is required?

The correct answer is Written disclosure of the potential conflict of interest. Option C is correct because RECA regulations mandate written disclosure of all potential conflicts of interest. When a brokerage serves as both the buyer's representative and the property manager, this creates a material conflict that must be disclosed in writing. The Real Estate Act requires agents to act in their clients' best interests, and written disclosure ensures buyers understand the brokerage's dual role and can make informed decisions about proceeding with the transaction.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

Under Alberta's Real Estate Act and RECA regulations, real estate professionals must disclose any conflicts of interest in writing. A conflict of interest occurs when a brokerage or agent has competing loyalties or financial interests that could compromise their duty to act in the client's best interest. Common conflicts include dual agency, referral fees, personal property interests, or related business services like property management, mortgage brokerage, or insurance. Written disclosure must be provided before the client makes any commitments, allowing them to seek independent advice or choose alternative representation.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Remember WRITE: Written disclosure Required In Transactions with Ethical conflicts. Just like you wouldn't accept a verbal contract for a major purchase, conflicts of interest need written documentation to protect everyone involved. When you see any question about conflicts of interest or dual relationships, immediately think WRITE - the answer will almost always require written disclosure rather than verbal disclosure or no disclosure.

Q: What exam tip applies to this Agency & Professional Ethics question?

Look for keywords like 'conflict of interest,' 'dual role,' or 'multiple business relationships.' These scenarios almost always require written disclosure under RECA regulations, not verbal disclosure or prohibition.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

Sarah, a RECA-licensed agent, is showing condos to first-time buyers in a building where her brokerage also provides property management services. Before showing units, she provides written disclosure explaining that her brokerage manages the building and receives management fees from the developer. This allows the buyers to understand potential conflicts around maintenance issues, rental policies, or building assessments, and they can choose to seek independent representation if desired.

Question

Agency & Professional EthicsConflicts Of InterestABMEDIUM

An Alberta real estate agent discovers their brokerage is also the property manager for a building where they are showing units to buyers. What disclosure is required?

Answer Options

A

No disclosure required as it's a separate business function

B

Verbal disclosure to the buyer is sufficient

C

Written disclosure of the potential conflict of interest

D

The agent cannot show properties managed by their brokerage