Whose Client is it? Moving Your Clients When Transferring Mortgage Brokerages

When you transfer brokerages, it can be difficult to understand what client belongs to what brokerage.

But the answer is simple: clients that you worked with at your old brokerage are that brokerage’s clients and not yours. Your clients do not automatically come with you when you transfer brokerages. The Real Estate Act Rules consider the “legal” client relationship as being with the brokerage.

However, as you are those consumers’ primary contact with the brokerage, it’s understandable that they and you would like to continue your relationship even if you move brokerages. To do so, those clients and your old brokerage have to agree to end their existing agreement, and the clients would have to sign new service agreements with your new brokerage.

But your responsibilities don’t simply start and stop with signing a new agreement – there’s more to consider.

1. Know your brokerage policies and privacy legislation

Some brokerages have consent forms providing for ongoing contact by both the brokerage AND the associate. Some brokerages have clients review and sign this form when forming a relationship, and others may provide it when you transfer brokerages.

This form allows you to ask for consent from your clients to share their personal information with your new brokerage. If you’re thinking about leaving your brokerage, talk to your current broker ahead of time about moving clients. Many brokers understand that people move around and may allow this.

You should also know the nature of your current service agreements and the details within Canada’s Anti-Spam Legislation (CASL) and the Personal Information Protection Act (PIPA). Under PIPA, your brokerage cannot share a client’s personal information with your new brokerage without the express consent of your clients.

Do your agreements with borrowers and the nature of your relationships give implied consent to be contacted when you move to a new brokerage? If not, section 10(9) of CASL allows for you to contact past clients in order to obtain their consent to continue correspondence or share their personal information with your new brokerage as long as you’ve had a previous business relationship (such as having entered into a written contract).

2. Brokerage files

The Real Estate Act Rules state that a brokerage must keep all client files for three years. These files include relationship documents, mortgage applications and approvals, proof of income and employment documents, and even the correspondence between you and the client about the mortgage deal.

These files cannot leave the old brokerage and “transfer” to you and your new brokerage. The brokerage must keep those files for three years, regardless of how or why the working relationship ends. However, the client can agree to have copies of their files made and sent to your new brokerage if they give their express consent.

Your old brokerage has a duty of confidentiality for all clients, and can only forego that duty with that written consent.

3. Correspondence is part of the brokerage file

As part of your former brokerage’s duty of confidentiality with its clients, it cannot share any aspect of the client’s personal or contact information with anyone who does not belong to the brokerage without the client’s written permission. This includes correspondence via text and email with that client.

You cannot use any of the information you collected while working with the client when you transfer. The information, communication, and relationship (including emails and text messages) belong to your former brokerage. Once you transfer brokerages, you can no longer continue to use those personal correspondences or contact information as part of your activities as a mortgage professional until you receive permission from the client, whether implicit or explicit.

4. The Bottom Line

Consent, consent, consent. You must have the client’s consent to continue working with them through your new brokerage; usually by terminating the service agreement with your former brokerage and having the client enter into a new service agreement with your new brokerage.