There are two separate and distinct disclosure requirements, one under the Real Estate and Business Brokers Act, 2002 and the other, under the Code of Ethics.
The Act requires disclosure of a direct or indirect interest. This notice goes to the OTHER side in a deal.
The Code requires disclosure of a relationship. That notice goes to your own CLIENTS and CUSTOMERS, no one else, nobody else could care less.
The problem often arises due to the fact that OREA has one single approach incorporating these concepts. There are two Forms (160 and 161) one Form is for Acquisitions and the other is for Divestitures. But, they are not broken down any further. It becomes confusing and for those who don’t want to look up the two sections in the Act and the Code, it’s often easier to simply say :
“who cares, tell everybody, everything… I have nothing to hide…”.
So, we have all kinds of disclosures to independent Sellers by Buyer Agents indicating a relationship to their son, or daughter etc. This is not required. This agent needs to tell their own competitive buyers who may feel that there would be a preference given to the relative. The Seller couldn’t care less!
What’s the risk?
The simple answer is that this agent just indicated:
- They are cavalier,
- They didn’t look up the answer,
- They didn’t spend the extra time necessary to be accurate.
Assuming that they are content providing that “message”, I suppose the risks are modest. However, if something went wrong in the deal, and this agent is sued, then, this rather cavalier, foolhardy approach will come in handy in cross-examination.
Brian Madigan LL.B., Broker