It is important to be aware of the following provision in the new TRESA legislation:
“Multiple representation
22. (1) A brokerage shall not represent more than one client in respect of the same trade in real estate unless,
(a) the brokerage discloses the information set out in subsection (2) to each client and prospective client in respect of the trade; and
(b) each client and prospective client, after receiving the disclosure under clause (a), consents in writing, to being represented by the brokerage in respect of the trade.”
It’s very important to have another look at the last paragraph:
- each client and prospective client,
- after receiving the disclosure under clause (a),
- consents in writing,
- to being represented by the brokerage in respect of the trade.
So, this means: 1) disclosure, 2) Consent, and then 3) Agreement.
OREA has drafted up some new clauses for inclusion. Let’s look at the following:
TERMINATION
TERM-3 Buyer Designated Representative – Replacement
The Buyer and Brokerage agree that in the event the Designated Representative herein representing the Buyer pursuant to this agreement, is no longer employed by the Brokerage, the Brokerage shall be entitled to designate another Designated Representative from the Brokerage, as determined in the sole and absolute discretion of the Brokerage, to replace the Designated Representative set out herein and upon such designation, this Agreement is thereby amended.
TERM-4 Seller Designated Representative – Replacement
The Seller and Brokerage agree that in the event the Designated Representative herein representing the Seller pursuant to this agreement, is no longer employed by the Brokerage, the Brokerage shall be entitled to designate another Designated Representative from the Brokerage, as determined in the sole and absolute discretion of the Brokerage, to replace the Designated Representative set out herein and upon such designation, this Agreement is thereby amended.
OREA Paragraphs
- the Brokerage shall be entitled
- to designate another Designated Representative from the Brokerage,
- as determined in the sole and absolute discretion of the Brokerage,
- to replace the Designated Representative set out herein and
- upon such designation, this Agreement is thereby amended.
It is noteworthy that the “upon written notice to the Seller/Buyer” provision has been omitted here.
Proposal
It would appear that OREA is suggesting that the Brokerage has the RIGHT, in the case of the transfer of employment of the Designated Representative to appoint someone else at the Brokerage WITHOUT the CLIENT’s CONSENT.
Comment
That doesn’t make any sense.
That appears to conflict with the legislation. The new TRESA legislation provided Consumers with some new rights and these clauses appear to take them away.
Certainly, if you plan to use this clause, you better explain it carefully.
Brian Madigan LL.B., Broker