“(Assignment clauses) are not unethical if they're being disclosed, and as long as someone knows the whole story and what the Realtor is getting out of it,” Mitch Collins, an agent with Century 21 in British Columbia, told REP. “It’s a free market (and buyers and sellers) can decide what they want to do.
“A seller can back out of the deal.”
Assignment clauses allow buyers to transfer his or her interest in a property to a third party prior to the closing date. In some cases the property is transferred to the buyer’s agent who then re-lists the home at a higher price.
After a Globe and Mail report surfaced about the prevalence of assignment clauses in British Columbia’s housing market, the province’s real estate board has stepped in and promised action.
The Real Estate Council of British Columbia has announced an advocacy group that will be tasked with examining licensee misconduct.
And while some industry players may argue the practice isn’t inherently unethical, issues do arise when agents fail to disclose the practice to clients.
“The reason the practice has become a big issue is the fact that it’s not always being disclosed as well as it should be,” Collins said. “If the right disclosure isn’t given it opens up the Realtor to a lawsuit."
Agents obviously have their opinions about the practice, but what do average Canadians think?
A recent study
by Angus Reid, which included over 6,000 Canadians, found that 33% of respondents find the practice “entirely unacceptable – basically a dishonest scam.” 32% view the practice as “generally unacceptable.” 32% believe it to be “generally acceptable,” and a mere 3% said it was “entirely acceptable” because “this is how things work in our business world.”
Are assignment clauses as big a deal as they’re being made out to be? One Realtor weighs in.