A mortgage broker in British Columbia, licensed as a Level 2 Sub-Mortgage Broker, is approached by a client seeking a mortgage for a commercial property in Vancouver. The broker has primarily dealt with residential mortgages. What is the broker's obligation under the British Columbia Mortgage Brokers Act regarding this application?

Question: A mortgage broker in British Columbia, licensed as a Level 2 Sub-Mortgage Broker, is approached by a client seeking a mortgage for a commercial property in Vancouver. The broker has primarily dealt with residential mortgages. What is the broker's obligation under the British Columbia Mortgage Brokers Act regarding this application?

Answer options:

• The broker can proceed as long as they disclose their limited experience in commercial mortgages to the client.
• The broker is prohibited from arranging commercial mortgages and must refer the client to a different broker. ✅ The broker must ensure they are competent to handle commercial mortgage transactions or refer the client to someone who is.
• The broker can arrange the mortgage if they obtain a co-brokerage agreement with another Level 2 Sub-Mortgage Broker experienced in commercial mortgages.

Correct answer: The broker must ensure they are competent to handle commercial mortgage transactions or refer the client to someone who is.

Explanation: Under the British Columbia Mortgage Brokers Act, a broker has a duty of care, which includes ensuring competence in dealing with a client's specific needs. If not competent, they must become so or refer the client to an appropriate professional.