Fee Sharing Disclosure

Fee Sharing Disclosure is the obligation of a licensed real estate professional to inform their client whenever commissions will be shared with, or a referral fee will be paid to, another party in connection with the client's transaction. This requirement exists under the Real Estate Services Act (RESA) and its Rules, which are administered by the British Columbia Financial Services Authority (BCFSA), to ensure clients understand all compensation arrangements that may influence the services they receive. Transparency about how remuneration flows is a core component of a licensee's duty of good faith and honesty toward clients.

The British Columbia Financial Services Authority (BCFSA) is the regulatory body responsible for overseeing real estate licensees in BC, having assumed this role from the former Real Estate Council of BC (RECBC) on August 1, 2021. Fee Sharing Disclosure obligations are grounded in the Real Estate Services Act (RESA) and the Real Estate Services Rules made under it. Licensees must comply with BCFSA's rules and guidance regarding disclosure of remuneration at all times.

Under the Real Estate Services Act (RESA) and its Rules, a licensee must disclose fee-sharing or referral arrangements before, or as soon as practicable after, entering into an agreement to provide real estate services, and in any event before the client is bound by a transaction. The disclosure must be made in writing so that the client has a clear record of how compensation will be distributed. Consult current BCFSA guidance for any specific timing requirements applicable to your transaction type.

Yes. The Real Estate Services Rules require that disclosures of remuneration, including fee-sharing and referral fee arrangements, be made in writing to the client. Written disclosure creates an auditable record and supports the transparency objectives of the Real Estate Services Act (RESA). Verbal-only disclosure is not considered sufficient to meet the licensee's statutory obligations under BCFSA's regulatory framework.

A compliant Fee Sharing Disclosure must clearly identify the parties who will share in the remuneration, the nature of the arrangement (e.g., referral fee, commission split), and the basis on which amounts will be shared, such as a percentage of the total commission. These requirements flow from the Real Estate Services Act (RESA) and Real Estate Services Rules, which mandate that disclosure be sufficient for the client to understand the compensation structure. Consult current BCFSA guidance for the precise content requirements applicable to your brokerage model.

Under the Real Estate Services Act (RESA), remuneration for real estate services generally may only be paid to, or shared with, a person who is licensed to provide real estate services in BC or who falls within a recognized exemption. Paying or sharing fees with unlicensed individuals is prohibited and can result in disciplinary action by the BCFSA. Licensees should review the Real Estate Services Rules and seek BCFSA guidance before entering into any fee-sharing arrangement to confirm the other party's eligibility.

A licensee's duty to disclose conflicts of interest is established under the Real Estate Services Act (RESA) and the Real Estate Services Rules, which require licensees to act in the best interests of their clients and to disclose any relationships or financial arrangements that could compromise that duty. A referral fee or commission-sharing arrangement with a third party can create, or appear to create, a conflict of interest, making timely Fee Sharing Disclosure essential. The BCFSA expects licensees to assess whether any such arrangement affects their ability to provide impartial advice and to disclose accordingly.

Yes. If a BC-licensed REALTOR® will receive a referral fee from an out-of-province or international licensee, or will pay one to such a person, the BC licensee must still make the required disclosure to their client under the Real Estate Services Act (RESA) and Real Estate Services Rules, regardless of where the receiving party is located. The BCFSA's jurisdiction covers the conduct of BC licensees, and the disclosure obligation follows the licensee, not the geographic location of the referral recipient. Consult BCFSA guidance for any cross-border nuances.

Failure to make a required Fee Sharing Disclosure can constitute a contravention of the Real Estate Services Act (RESA) and the Real Estate Services Rules, exposing the licensee to disciplinary proceedings by the BCFSA. Possible outcomes include fines, conditions on the licence, suspension, or cancellation of the licence, depending on the severity and circumstances of the non-disclosure. The BCFSA publishes its enforcement decisions, so substantiated contraventions become part of the public record.

Yes. When a BC licensee shares a client's personal information with another brokerage or individual as part of a referral arrangement, that activity is governed by the Personal Information Protection Act (PIPA) of BC, which requires that personal information be collected, used, and disclosed only with the individual's knowledge and consent. Licensees must ensure they have appropriate consent before passing client contact details or transaction information to a referral recipient. If the referral is facilitated through commercial electronic messages, Canada's Anti-Spam Legislation (CASL) may also apply to those communications.