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-5 Seller Representation – Refer to Another Brokerage
The Seller and Brokerage agree that in the event the Brokerage herein is representing a Buyer in a trade with the Seller pursuant to this agreement, and the Seller notifies the Brokerage in writing that the Seller does not agree to such representation, then upon written notice to the Seller, the Brokerage shall be entitled to refer the Seller to another brokerage (“referred brokerage”), as determined in the sole and absolute discretion of the Brokerage, to replace the Brokerage set out herein and upon such referral, the Seller shall enter into a representation agreement with such referred brokerage upon the same terms as set out herein, and subject to the terms herein this Agreement shall be thereby terminated.
TERM-6 Buyer Representation – Refer to Another Brokerage
The Buyer and Brokerage agree that in the event the Brokerage herein is representing a Seller in a trade with the Buyer pursuant to this agreement, and the Buyer notifies the Brokerage in writing that the Buyer does not agree to such representation, then upon written notice to the Buyer, the Brokerage shall be entitled to refer the Buyer to another brokerage (“referred brokerage”), as determined in the sole and absolute discretion of the Brokerage, to replace the Brokerage set out herein and upon such referral, the Buyer shall enter into a representation agreement with such referred brokerage upon the same terms as set out herein, and subject to the terms herein this Agreement shall be thereby terminated.
OREA Paragraphs
- upon written notice to the Seller/Buyer,
- the Brokerage shall be entitled to refer the Seller/Buyer
- to another brokerage (“referred brokerage”),
- as determined in the sole and absolute discretion of the Brokerage,
- to replace the Brokerage set out herein and
- upon such referral,
- the Seller/Buyer shall enter into a representation agreement
- with such referred brokerage
- upon the same terms as set out herein, and
- subject to the terms herein this Agreement shall be thereby terminated.
It is noteworthy that the “upon written notice to the Seller/Buyer” provision has been added back here, although left out of #3, and #4, discussed previously.
Proposal
It would appear that OREA is suggesting that the Brokerage has the RIGHT, in the case of the failure of the Client to consent to the new representation proposed, 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