Lockboxes & Transparency: We need to be so very careful with lockboxes

by Paul Cowhig, Professional Standards Advisor

As I think I’ve said before, lockboxes are a very useful tool to have but there are risks associated with them. So, what I recommend is that you be very clear with your clients. The bottom line is, when a lockbox is on an occupied home, those associated risks are much higher.

It’s one thing when a vacant property is accessed illegally; things may be stolen, or damage done. But, when a criminal gains access to an occupied home, people are at risk as well, not just ‘stuff.’

The Board received news of a recent lockbox theft at an occupied home. The lockbox had been placed on the gas meter piping at the side of the house, which is a pretty common spot to use even though Fortis BC says, “Please do not do that!” The lockbox was likely taken in broad daylight. We don’t know if it was cut off or if the box was hacked somehow, but it was taken.

Under the cover of darkness that night, the thief came back and was only thwarted from entering the home because the agent had alerted the property owner about the theft and precautions were taken. Luckily, the Listing agent had been made aware of the theft because a Buyer agent (who came to use it), noticed the lockbox was gone and notified them immediately. In many cases (maybe most cases) it could be days before a missing lockbox is noticed.

My reason for writing this is to remind you of the risks, as well as encourage you to be fully transparent with your clients about the risks of lockboxes.

As I said in my last article on this topic, lockboxes are primarily for Realtors’ convenience. We must not allow that self interest to cause us to downplay the risk to our clients. I’m not suggesting you scare people away from using a lockbox, but you have got to remember you must always represent the best interests of your client. Among other things, that means you must fully inform them of the pros and cons associated with the use of lockboxes so they can make an informed decision. That’s going to mean some people are going to opt to say no to a lockbox and that’s got to be ok. It’s their choice. The ones that choose to have a lockbox must be clear about the risks and responsibility.

And that’s a good thing! You want it to be their choice – not yours – and you want them to indemnify you from any repercussions should there be a problem.

Guess what?? We are about to have a form for that.

BCREA has some new forms coming out next month and one of them is a Lockbox Acknowledgement, Consent and Indemnity Form. This form was created to help Realtors deal with the various issues surrounding lockboxes. It will be like a lot of the forms you already use in that, if you address all the content of the form, it will ensure a fulsome conversation is had and written, informed consent is received and documented. This is not a mandatory form, but I strongly advise that it be used every time you place a lockbox as opposed to simply addressing it briefly on the Schedule ‘A.’

Lockbox security is very good but let’s not pretend they don’t get broken into from time to time. They do. If that happens to your client and you have not had a clear conversation about the risks associated, you may find yourself in deep trouble. You could lose your client. You could face a Council complaint (Real Estate Services Act), a Board complaint, or even a civil lawsuit for losses and/or damages.

Three takeaways:

  1. Use the new form when it comes out and, in the meantime, ask your Broker how to protect yourself. Many Brokers have created their own form for this.
  2. Professionals cover all the bases for their clients and empower them to make good decisions based on their own sense of what’s right for them and their own personal circumstances.
  3. Think about where you place a lockbox. Try to be security-conscious rather than obvious. Logical locations for a lockbox such as outside a strata complex (if allowed), hanging on a bike rack, or right outside or on someone’s door are exactly that – logical and easy places for thieves to find one without looking too hard.

I want to emphasize again what great work you all do for your clients. It’s because the stakes are so high that we need to be so careful. One break-in because of a lockbox is too many.

Thanks for reading this.

Source: FVREB Professional Standards & Communications