Special practices in commercial real estate brokerage
During the review of requests submitted to it, the Assistance Department noted that certain practices used in commercial real estate brokerage do not promote collaboration or go against the regulations. The aim of this article is to inform commercial real estate brokers of good practices to be adopted to avoid certain disputes. Here are a few examples:
Concluding a written agreement (verbal agreements should be avoided)
To perform certain brokerage transactions such as marketing, representation or advertising, the real estate broker must be expressly authorized in writing by the person or company for whose benefit he undertook to perform such a transaction. However, it is not uncommon to note that there is no written contract.
In addition, the broker is required to submit a copy of the duly signed contract whose content is compliant with the regulations governing real estate brokerage. The broker has the obligation to record in writing the rights and obligations of the parties.
Collaboration issues usually result from the fact that the broker with no written agreement is unable to guarantee the remuneration of the broker collaborating in the transaction, or does not have all the information to carry out an effective marketing and consequently send that information to a licence holder who requests it.
Therefore, always remember to have your clients sign a contract. Standard forms are available on InstanetFormTM.
Representation and premises unavailable
We noted a widespread practice that generates a lot of requests for the Assistance Department. It is about brokers who permanently leave “For Rent” signs in front of premises that are unavailable, in order to attract clients and present them with other premises located in another building. These are false and misleading representations that may generate complaints from potential lessees frustrated by having been misled. Moreover, this practice may constitute unfair competition.
Remember that to be able to place a “For Sale” or “For Rent” sign, a broker must be expressly authorized in writing, as previously stated.
