From time to time the issue of “related parties” arises. There is an obligation upon real estate agents to disclose a direct or indirect interest in a real estate transaction.
This applies, whether they are acting for themselves (a direct interest) or whether they are acting for a related party (an indirect interest).
So, the first part is easy, but just who qualifies as a “related party” under the Real Estate and Business Brokers Act, 2002?
Related parties under the Act comprise the following:
1) the “A” list, that is, lineal ascendants, lineal descendants and collaterals of the first degree,
2) The “B” list, that includes adoption, by lineal ascendants and lineal descendants, but not by collaterals,
3) The “C” list, that includes marriage, by lineal ascendants, lineal descendants and collaterals of the first degree,
4) The “D” list, that includes a conjugal relationship outside of marriage, by lineal ascendants, lineal descendants and collaterals of the first degree, and
5) The “E” list, that includes associated persons as defined by the Act, that is, corporations, partnerships, and certain trusts all by reason of their relationship to a person described in the A, B, C or D list. So, this would include your PREC.
Related party in-laws must fall within the C list definition. Other in-laws are not related. Brothers and sisters are in, but, aunts, uncles and cousins are out.
The entire related by reason of a conjugal relationship is troublesome. That’s sometimes difficult to figure out.
As well, everyone who has a company, corporation or partnership may find themselves connected and thereby a “related party” as defined by the Act.
If there is a risk, and you are not sure, then, it’s better to err on the side of caution and simply disclose a possible indirect interest. That way, you will be fully protected. Most agents simply disclose all kinds of relationships to everyone no matter what. This is simply foolish!
When you are buying or selling you have to tell the “other side”.
When you have a related party, you only have to tell your own clients and customers because nobody else could care less!
Brian Madigan LL.B., Broker