Disclosure of Remuneration

A Disclosure of Remuneration is a mandatory written document required under the Real Estate Services Act (RESA) and its Rules, administered by the British Columbia Financial Services Authority (BCFSA), in which a licensee or brokerage discloses to their client all remuneration they will or may receive in connection with a real estate transaction. This includes not only amounts paid by the client but also any remuneration payable by other parties, such as a cooperating brokerage or a seller paying a buyer's agent's commission. The requirement exists to ensure full transparency about how a licensee is financially compensated.

Under the BCFSA Rules made under RESA, a licensee must provide the Disclosure of Remuneration to the client before the client enters into the agreement to which the remuneration relates — that is, before a contract of purchase and sale or other binding agreement is signed. Providing the disclosure after the fact does not satisfy the statutory requirement. Licensees should ensure the client receives, reviews, and acknowledges the disclosure in advance of executing any transaction documents.

Yes, the BCFSA Rules under RESA expressly require that a Disclosure of Remuneration be made in writing. An oral disclosure alone is not sufficient to meet the regulatory obligation. The written disclosure must describe the remuneration with enough detail that the client can understand what amounts the licensee or brokerage will or may receive and from whom those amounts will be paid.

The disclosure must describe the nature and amount, or the method for calculating the amount, of all remuneration the licensee or brokerage will or may receive in connection with the transaction, including remuneration paid by parties other than the client. If the exact amount is not yet known, the licensee must describe the formula or basis upon which it will be determined. This requirement is set out in the Rules under RESA and is overseen by the BCFSA.

Yes. If a buyer's agent or buyer's brokerage will receive any remuneration from the seller or the seller's brokerage — such as a cooperating commission — that amount must be disclosed to the buyer-client in the Disclosure of Remuneration. This obligation under the BCFSA Rules and RESA is central to the transparency purpose of the disclosure, ensuring buyers understand that their agent may be compensated by the other side of the transaction.

Failure to provide a Disclosure of Remuneration as required by RESA and the BCFSA Rules constitutes a breach of the licensee's statutory obligations and can result in disciplinary action by the BCFSA, including fines, conditions on a licence, suspension, or cancellation. In addition, a failure to disclose may affect the enforceability of the remuneration agreement between the licensee and their client. Clients who believe a required disclosure was not made may file a complaint with the BCFSA.

No, they are distinct documents, though they are often provided together. A service agreement (sometimes called a representation agreement or buyer's agency agreement) sets out the terms of the relationship between a licensee and their client, including services to be provided. The Disclosure of Remuneration is a separate, specific written document that satisfies the transparency requirement under the BCFSA Rules and RESA by detailing how and from whom the licensee will be paid. Both are required elements of a properly documented client-licensee relationship in BC.

Yes. The obligation under RESA and the BCFSA Rules applies to any licensee acting for a client, regardless of whether that licensee represents a buyer or a seller. A listing licensee must disclose to the seller-client all remuneration the brokerage will receive, including any cooperating commission offered to a buyer's brokerage. Similarly, a buyer's licensee must disclose to the buyer-client all remuneration receivable in connection with the transaction.

Yes. Under RESA and the BCFSA Rules, a licensee may receive remuneration from a party other than their own client, provided the disclosure is made in writing and the client provides informed consent. The written Disclosure of Remuneration serves as the mechanism through which the client is given the information necessary to grant that consent. Without proper written disclosure and consent, accepting third-party remuneration can constitute a breach of the licensee's duties under RESA.

PIPA applies broadly to how licensees and brokerages collect, use, and disclose personal information in BC, and this includes the handling of financial information contained in or related to a Disclosure of Remuneration. Licensees must ensure that any personal or financial information shared in the disclosure process is collected only for identified purposes, protected appropriately, and not disclosed to unauthorized third parties. Clients retain rights under PIPA to access information about them held by a brokerage.