by Ralston Alexander, QC
The Law Society and the B.C. Real Estate Association have reached an agreement to be put to the Ministry of Finance on the licensing exemption for lawyers in the provincial Real Estate Act. As of February 2004, both organizations agreed that lawyers should not require additional licensing to conduct real estate sales. A lawyer’s staff including, paralegals and secretaries, however, will not be covered by the exemption.
The extent to which lawyers and their staff are exempt from the licensing provisions of the Real Estate Act arose last year when the Ministry of Finance, at the urging of the B.C. Real Estate Association, proposed changes to the Act. Under the proposal, lawyers would have been restricted to conducting only those real estate sales that are ancillary to settling an estate, administering a will or resolving a marriage settlement. Lawyers would not be entitled to list or sell a property outside these circumstances unless they were separately licensed under the Real Estate Act.
The Law Society strongly opposed the government’s proposal and established the Real Estate Act Review Task Force which I chaired to review the draft legislation. That Task Force made submissions to the Ministry of Finance pointing out that B.C. lawyers have had a longstanding exemption under the Real Estate Act that allows them to engage in real estate sales without any additional licensing requirements. The submissions also noted that the exemption had caused no public harm and there was no public policy rationale to restrict it. The B.C. Branch of the Canadian Bar Association and a number of B.C. law firms joined in opposing the restrictions and presented submissions of their own.
With encouragement from the Ministry of Finance, the Law Society and the B.C. Real Estate Association discussed their respective concerns and came to a common understanding. Both organizations have now agreed that the licensing exemption for lawyers in the Real Estate Act should not be changed but that a lawyer’s secretaries, paralegals and other non-lawyer staff are not covered by the exemption.
If the government amends the Real Estate Act to reflect this understanding, the Benchers will revise the Professional Conduct Handbook to clarify the role of law firm staff in real estate sales. Accordingly, when a lawyer is engaged in the sale of real property, only the lawyer may take instructions from the client or provide advice to the client with respect to buying and selling real estate or with respect to the listing agreement, property management contract or contract of purchase and sale. Only lawyers will be permitted to present, accept or negotiate offers or contracts of purchase and sale for clients, and any advertising with respect to real estate sales must be in the name of the lawyer or law firm.
Under the lawyer’s supervision, employees will be entitled to draft documents and correspondence for approval by the lawyer for presentation to the client (as in other areas of practice), arrange for maintenance and repairs of real property under the lawyer’s care and control, attend at a property with a prospective purchaser to open the home (but not conduct an “open house”), act as security during the viewing of the home and provide prepared information packages.
Ralston Alexander, QC is the First Vice-President of the Law Society of BC and a partner in the Victoria law firm Cook Roberts.
This article was published in the April 2004 issue of BarTalk. © 2004 The Canadian Bar Association. All rights reserved.