In a multiple representation situation, there are some restrictions, but there are also some increased disclosure obligations.
Remember, the Brokerage is actually the agent, so any two members of the same Brokerage can activate the multiple representation situation.
You will come across the additional disclosure requirements in the Buyer Representation Agreement, the Listing Agreement and the Confirmation of Cooperation and Representation.
All three documents include the following:
MULTIPLE REPRESENTATION:
The Seller hereby acknowledges that the Listing Brokerage may be entering into buyer representation agreements with buyers who may be interested in purchasing the Seller’s Property. In the event that the Listing Brokerage has entered into or enters into a buyer representation agreement with a prospective buyer for the Seller’s Property, the Listing Brokerage will obtain the Seller’s written consent to represent both the Seller and the buyer for the transaction at the earliest practicable opportunity and in all cases prior to any offer to purchase being submitted or presented.
The Seller MUST consent. So, this is one reason for the CCR, Confirmation of Cooperation and Representation
The Seller understands and acknowledges that the Listing Brokerage must be impartial when representing both the Seller and the buyer and equally protect the interests of the Seller and buyer.
If negotiations were valued, that is lost now
The Seller understands and acknowledges that when representing both the Seller and the buyer, the Listing Brokerage shall have a duty of full disclosure to both the Seller and the buyer, including a requirement to disclose all factual information about the Property known to the Listing Brokerage.
This disclosure obligation exceeds the normal standard. Up until now, the Listing agent could keep quiet. The only person they tell would be the Seller. Now, we have a change. The Listing agent has to tell the Buyer’s agent what they know. The reason is multiple representation. The Seller was given an “out”, that was to refuse multiple representation but they didn’t take advantage of that opportunity
The consent to proceed was to be based upon “informed consent”. So, hopefully any issues were identified, considered, and the Seller elected to proceed. That’s what the CCR says, anyways!
However, the Seller further understands and acknowledges that the Listing Brokerage shall not disclose:
• that the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;
• that the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer;
• the motivation of or personal information about the Seller or buyer, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
In this case, there may be a remediated marihuana grow house, which is about to be closed down by the municipality for lack of building permits and compliance with the Building Code
• the price the buyer should offer or the price the Seller should accept; and
• the Listing Brokerage shall not disclose to the buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the Property will be disclosed to both Seller and buyer to assist them to come to their own conclusions.
Oddly, potential uses become relevant
Where a Brokerage represents both the Seller and the Buyer (multiple representation), the Brokerage shall not be entitled or authorized to be agent for either the Buyer or the Seller for the purpose of giving and receiving notices. (in bold print)
COMMENT
In a multiple representation situation, there are some increased disclosure requirements which apply.
Some brokerages, in fact advertise and promote this fact in order to encourage potential buyers to sign up with one of their agents rather than go to a competitor:
“We have to tell you the secrets and there’s more to share!”
Brian Madigan LL.B., Broker