“Pending” issue explained by the Chair of the CREB® Professional Standards Steering Committee
By Doug MacCallum
Recently, we submitted a motion to the board of directors to implement changes to rule and regulation 18.02. We kept the original rule (to report all conditional sales) and expanded on it, (except where the seller has given written instruction not to report the conditional sale until conditions are waived in writing.)
The old rule was brought in to existence before there were fax machines, before http://www.mls.ca or www.realtor.ca, and even before home inspections and condo conditions. It was brought in when the buyer’s brokerage did the conveyancing and only took certified deposit cheques to protect their clients’ deposits.
Times have changed.
The old rule would not hold up in today’s court room. The seller is disadvantaged as soon as the property is marked “Pending” on MLXchange as it is removed from the MLS® website and a host of other websites. In today’s world of real estate, offers are accepted without certified checks, deposits don’t accompany the faxed offers, and buyers have conditions that are considered weak at best, with home inspection clauses and condo document reviews required to the buyer’s satisfaction.
We needed a new rule that can withstand the scrutiny of a Court of Queen’s Bench Judge to attempt to level the playing field. A rule that ensures an associate is not in contravention by delaying reporting a pending sale.
The Professional Standards Steering Committee, last year, had four past chairmen with a minimum of 10 years experience along with another seven very experienced REALTORS® at the vice chair level, to review this particular rule. We even reviewed other options that included adding a new status to compliment “Actives”, “Solds”, “Pendings”, etc. We looked at other boards that made changes and we decided to adopt a more positive change.
We anticipate that sellers and REALTORS® will continue to report the pending sale like you always have once a property is conditionally sold. However, in that very rare instance when you have a demanding seller who wants absolutely no disclosure, CREB®’s rule 18.02 can now accommodate them. You may not want to do it, but CREB® has built a form and by sending it in we can monitor and assess whether we need to make further changes to the system or not.
If we get complaints on the same associate time and time again we can do a paper trail search and reprimand if there are in contravention of any rules. How you ask? When the offer is signed and the clause 15.1 kicks in the clock, with further investigation we can determine when the sale was reported on MLXchange, when the deposit actually occurred and if the associate had a written direction from the sellers. There should be a detailed paper trail and if not questions will be asked.
Not all forms we provide are mandatory, only the listing document is. So if you wish to have a partial non-disclosure clause that a seller is willing to sign then create one. You really need to have dialogue with your seller at the time of the listing and explain how you work pending sales.
I personally believe in disclose, disclose, disclose. I will not be compromised by accepting an agency relationship where I cannot be truthful to other members or public. I will create an agreement with the seller that is “Win Win” for everyone.
You’re the professional, how are you going to handle this new challenge? Remember, the only thing you bring into this industry is your good name, it is the most important asset you have, do everything you can to protect it and to promote it in a professional manner.