Assisting clients with diminished capacity

by Paul Cowhig, Advisor, Professional Standards

I had a call from a dutiful, caring son the other day. His elderly parents are living in the same care home and, in spite of their age and diminished ability to live independently, both are doing very well. So well in fact that, every so often, they start to think they might like to have their own home again – a yard to putter in, a garage for tools and projects, a place to entertain, the same dreams of home ownership we all have. Every few months one of them will get their hands on a real estate paper and start making calls to local REALTORS® lining up appointments to view homes.

So far, all the agents who have arrived at the care home to meet with them have figured out that these folks were perhaps not the hot buyers they thought they were, and graciously withdrew with no harm done. Their son called me not really sure of what I might be able to do for him. He was very complimentary to our profession in terms of how his parents have been dealt with kindness and consideration. But he’s worried that, sooner or later, his folks are going to call an agent who won’t care about anything except making a sale. I told him he could count on us to be respectful, courteous and conscientious in the exercise of our duties and obligations.

In reviewing the Real Estate Council’s Professional Standards Manual, it’s apparent that we need to exercise due diligence and become familiar with BC’s current legislation regarding adult incapacity.

The Adult Guardianship and Planning Statutes Amendment Act (Bill 29), which came into force in September 2011, introduced a number of changes to BC’s laws governing adult incapacity. Among the amendments were updates to the Representation Agreement Act, and the creation of a framework for the appointment and authority of personal and property guardians for individuals who require adult guardianship.

The following recommendations, made in the Report from Council article, “Due Diligence Required When Dealing with the Elderly” (December, 2011) apply to situations where a client may be suffering from a cognitive impairment.

Licensees should contact family members to determine whether they or anybody else hold a power of attorney or have been appointed as a legal representative or substitute decision-maker for this person under any of these statutes to ensure that this person is making the right decisions.

Licensees should obtain a true copy of the power of attorney, representation agreement or advance directive for their file, and read the document to ensure that they are dealing with the person who has legal authority to deal with the property.

If there are no family members, or neither the family members nor anybody else holds a power of attorney or has been appointed as a legal representative or substitute decision-maker, the licensee should ensure that the person obtains legal advice before entering into any real estate transactions.”

Do I need to mention how delicate we need to be with things like this? People’s dignity and well-being is at stake. This is a perfect example of the sometimes uncomfortably intimate conversations we need to have with our clients in order to be sure we are representing their best interests. It’s also a great example of what I think the Superintendent and Council mean when they say our industry must shift from a “sales-focused industry to a client-focused profession.”  The ‘deal’ is not the most important consideration. Representing the best interest of the client is, and sometimes that means not doing the deal.