Meet your Chair!
With a real estate career spanning more than 30 years, Dave Watt has experienced market ups and downs, regulatory changes, prime rates ranging from 2.25% to 14%-plus, and more. Now he’s bringing that experience to the role of E&O Chair of the Board.
Dealing primarily in residential properties in North and West Vancouver, Dave worked as a licensed Realtor® from 1984 to mid-2017. One of his key pieces of advice for licensees is to pick a geographic and property area and stick to it. “You’ll do a better job and provide better professional service,” he says.
You’ll also be less likely to run into claims, he adds. “It’s the best way to mitigate risk, to refer that client to an agent in that area. You may not be aware of local knowledge such as water quality or quantity, slope stability, septic systems or municipal sewer, previous remedial work to a strata building, or services available to the property.”
He points to modular homes on titled land and homes on Indigenous land with a licence to occupy as two other areas that require specialized knowledge to enable licensees to advise their clients properly.
“Claims come to E&O so often because someone chose not to refer the client.”
In addition to establishing and sticking to your area of expertise, Dave says, “The best advice I can give is to make sure you take advantage of the technology today and keep really good records. Create a folder for each transaction and keep everything to do with that transaction in it.”
He recalls a client filing a complaint against him at the Real Estate Council, claiming that he had undersold his house. His records showed the claim was unfounded, and the file was closed before it went to a hearing.
“It saves you a lot of what I call negative time,” he says. He estimates that the complaint could have taken two years to wind its way through the process if he hadn’t had records to prove it was unfounded.
“Frankly, if I’m not representing you well, I should be reprimanded,” he adds. “I’m supposed to be an expert.” Licensees have a duty to keep learning and re-educating themselves as regulatory and other details change, he adds. “Be the expert you claim to be.”
Some licensees might consider paying a deductible to be a regular cost of business, Dave notes, but in reality, the deductible will be the least of their concerns. “If a claim is registered, the process can be really time-consuming. You have no control to try to get it through the courts quickly. It consumes your thoughts – you’ll do less business because of the time and mental energy consumed by the claim.”
Years ago, he sued a client for breach of contract, which took approximately 18 months to get to court. Although he was successful in the suit, he says, ”I can’t begin to measure the business I missed because of it.”
His third piece of advice is to calculate whether you have enough of each type of insurance coverage. “Sit down with your manager and discuss your needs.” Even if your average transaction involves property worth less than $1 million, defence costs and liability together can easily exceed your $1 million coverage from the E&O Indemnity Plan.
Reliance on the sale of a property to finance the purchase of another, and the same for that buyer and so on, can create a domino effect for a claim, resulting in increased damages.
Historically, claims relate to market activity, Dave says. “If prices are going up rapidly, sellers are sometimes unhappy because the value of their property jumped between when they made the deal and the closing. If the market falls dramatically, there are buyers who want out of their contracts. It’s not a huge number, but there are always some.”
He’s enjoyed his involvement in various roles with E&O over the years, he says. “It’s a well-run organization; licensees can feel assured that they’re well protected.
“It’s a fairly small organization that does an incredible amount of work.”