TRESA: Now Lesser Obligations to Disclose
To some extent, the new TRESA legislation is confusing because agents didn’t seem to know, appreciate and apply the law as it stood.
Now, they are acting normally under the new TRESA legislation.
So, what the issue?
Multiple Representation by Accident
Mary and Bob are both real estate agents working for ABC Realty Brokerage which has 1,400 agents. They have never met.
Mary has a Listing for 123 Main Street and Bob has a Buyer.
Entering into negotiations with each over a series of days, they end up with a deal. Everyone seems happy, until the Buyer discovers that there is a problem with the survey and the location of the driveway. Mary knew all about this, but never passed this information on to either Bob or the Buyer.
Do we have a problem? Absolutely! ABC Realty was the sole and only agent in the deal and acted on behalf of both sides of the deal. That meant “NO SECRETS”.
And, as it turned out through Mary, ABC technically “knew” about the driveway problem and never passed this information on. This was not actual knowledge, this was simply “imputed knowledge”.
Designated Agency as a Solution
Going forward under the new legislation, the Buyer will no longer be able to sue!
- Mary represents the Seller
- Bob represents the Buyer
ABC Realty provides basic services in the background.
This means that going forward Mary can keep the driveway information to herself. ABC Realty is not deemed to have knowledge and the Buyer really won’t be able to sue Bob because “how was Bob to know”, seriously “ he can’t read minds”.
This leaves the Buyer, consumer, out of luck when it comes to disclosure, and a remedy for the failure to disclose.
That’s a great step forward in terms of consumer protection under the new TRESA legislation!
Effectively, it’s business as usual because may real estate agents never, ever understood their “increased” disclosure obligations in multiple representation situations.
Brian Madigan LL.B., Broker