Who is Your Agent under TRESA?

Interesting question! It always used to be “the Brokerage”. The correct answer under TRESA would be: 1) “the Brokerage”, as above, or 2) the “Designated Agents”).

Brokerage Representation

This is the same as always under REBBA, 2002. The Brokerage would be the agent and owe fiduciary duties to the client, either the Buyer or the Seller.

All registrants of the Brokerage would also owe fiduciary duties to the client. Either the Buyer or the Seller, as the case may be.

Designated Representation

Under TRESA, there are some “new” definitions:

“brokerage representation agreement” means a representation agreement between a brokerage and a client under which the brokerage and all of the brokers and salespersons employed by the brokerage provide services, including representation, to the client;

“designated representation agreement” means a representation agreement between a brokerage and a client under which the brokerage provides services to the client and designates one or more brokers or salespersons employed by the brokerage to represent the client to the exclusion of the brokerage and all of the other brokers and salespersons employed by the brokerage;

“designated representative” means a broker or salesperson who is designated under a designated representation agreement to represent a client;”

The intention here, is that the Brokerage will still provide certain “services” to the client, but not “representation”, and of course, with representation along go the “fiduciary duties”. These duties only apply to the registrant selected by the Brokerage to provide such representation and fiduciary duties to the client. Other registrants with the Brokerage do not provide representation nor do they owe fiduciary duties to that client.

Remember that under REBBA a client was always owed fiduciary duties. Now, no longer! Just the designated representative owes those duties to the client.

New Provisions under TRESA

These are the new provisions outlining “designated agency”, referred to as “designated representation” under TRESA:

Multiple representation — designated representative

22.0.1 (1) A designated representative 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 same designated representative in respect of the trade. 

(2) The following is the information referred to in subsection (1):

1.  The fact that the brokerage proposes to have the designated representative represent more than one client in respect of the same trade in real estate.

2.  The differences between the duties the brokerage and the designated representative would have if the designated representative represented only one client in respect of the trade and the duties the brokerage and the designated representative would have if the designated representative represented more than one client in respect of the trade, including any differences relating to,

i.  the duties the brokerage and the designated representative would owe,

ii.  the services the brokerage and the designated representative would provide, and

iii.  the remuneration arrangements the brokerage would have.

(3) The brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (1) indicating that the disclosure has been received and, if a person makes the acknowledgement, provide them with a copy of it. 

(4) If a designated representative represents more than one client in respect of the same trade in real estate, the designated representative shall treat the interests of those clients in an objective and impartial manner. 

Multiple representation — brokerage and designated representative

22.0.2 (1) This section applies if a brokerage represents one or more clients in respect of a trade in real estate under a brokerage representation agreement and a broker or salesperson employed by the brokerage represents one or more other clients, as a designated representative under a designated representation agreement, in respect of the same trade. 

(2) The brokerage and the designated representative shall not represent their respective clients in respect of the same trade unless,

(a)  the brokeragediscloses the information set out in subsection (3) to each client in respect of the trade; and

(b)  each client, after receiving the disclosure under clause (a), consents in writing to being represented by the registrant in respect of the trade. 

(3) The following is the information referred to in subsection (2):

1.  The fact that the brokerage represents one or more clients and a broker or salesperson employed by the brokerage represents, as a designated representative, one or more clients in respect of the same trade in real estate.

2.  With respect to the brokerage’s client or clients, the differences between the duties the brokerage would have if only the brokerage represented its client or clients in respect of the trade and the duties the brokerage would have if both the brokerage and the designated representative represented their respective clients in respect of the trade, including any differences relating to,

i.  the duties the brokerage would owe,

ii.  the services the brokerage would provide, and

iii.  the remuneration arrangements the brokerage would have.

3.  With respect to the designated representative’s client or clients, the differences between the duties the brokerage and the designated representative would have if the brokerage did not represent any clients in respect of the trade and only the designated representative represented the designated representative’s client or clients in respect of the trade and the duties the brokerage and the designated representative would have if both of them represented their respective clients in respect of the trade, including any differences relating to,

i.  the duties the brokerage and the designated representative would owe,

ii.  the services the brokerage and the designated representative would provide, and

iii.  the remuneration arrangements the brokerage would have. 

(4) The brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (2) indicating that the disclosure has been received and, if a person makes the acknowledgement, provide them with a copy of it. 

(5) The brokerage and the designated representative and, for clarity, every other broker and salesperson employed by the brokerage shall treat the interests of the brokerage’s client or clients and the designated representative’s client or clients in respect of the same trade in an objective and impartial manner. 

(6) Nothing in this section affects the application of section 22 or 22.0.1 in circumstances where the brokerage or the designated representative represents more than one client in respect of the same trade. 

So, that was the new designated representation arrangement.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com