Multiple Representation with Two Buyers

(Ontario)

Question:

You have 2 buyers who want to put an offer on the same property. It is another brokerage’s listing. The buyer agent has to tell both of his buyers that they are in multiple representation with the buyer agent’s brokerage.

Does the buyer agent legally have to disclose that they are both this particular agent’s offers? If the buyer agent asks a colleague to submit offer number two for them, are they required to tell buyer one that the competing offer is technically their buyer?

Answer:

I think the correct answer here is that it depends upon the circumstances. You say “asks a colleague”. Naturally, if that colleague is with the same office, the answer would be “yes”.

If the Agent refers the matter to a colleague and charges a referral fee, the answer is also likely “yes”. The first Buyer needs to know that their own Agent doesn’t have any competitive skin in the game. The fiduciary duties of accounting, obedience and loyalty would require that disclosure.

If the Agent, provides the names of some colleagues, and doesn’t charge a referral fee, then the Agent has probably sufficiently distanced themselves from the second Buyer who is independently, properly represented. The former BRA with this client should be terminated. If that takes place, then no disclosure to the first Buyer would be required under the common law.

However, if the second Buyer is still with the same Brokerage, then the Disclosure is still required under the REBBA Code of Ethics.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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