The Complications of the Second Client

The timing issue comes into play, when you have two parties both under contract at the same time.

If you get a Listing for Sam’s property, you can show it to everyone, and you can sell it to everyone. The only thing you can’t do is “act” for the Buyer. The reason is that that would be a conflict of interest. Sam, however, can agree and provide you with permission.

The basic concept has been addressed already in a theoretical sense, both in the WWR (Working with a Realtor) and Listing Agreement. But, for any given deal, you need Sam’s specific permission. That could be as late as the CCR (Confirmation of Cooperation and Representation), immediately before the Offer (see. S. 10 Code of Ethics).That’s fine as long as the answer is “yes” but I would be a little more cautious if I thought that the answer might be “no”.

What if Sam says “no”!

Sam might say: “I’m not happy about you representing Buyer Bob, you have known him for 30 years and you just met me last week. I think you might possibly favour Bob in the negotiations…”.

The issue, of course, is when did you actually get Bob as a client? Maybe Bob could be a Customer? However, Bob may have become your client under “implied agency” before signing the BRA (Buyer Representation Agreement). If you provided “advice” to Bob at an open house rather than just mere information, Bob’s your client. You can act for Bob in any deal in Ontario with the exception of Sam’s property.

Your choices would be to fire Bob, refer Bob, or have Bob decide to go after another property.

The unfortunate consequence is that if you take on Bob as a Client in respect to the purchase of Sam’s property, this is a breach of the agency duties owed to Sam. This allows Sam to terminate the Listing without consequence.

This is naturally more theoretical than real since most Sellers just want their properties sold. However, every so often, there is a seller out there who is unduly litigious.

Brian Madigan LL.B., Broker

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