Ontario pushing for law that prohibits a real estate agent from representing both seller and buyer in a transaction
The Ontario Liberal government is now proposing a ban on the practice of double ending, after the recent announcement and implementation of a 16-point housing plan that included provisions for expanded rent control and a 15-per-cent foreign buyers’ tax.
One of the plan’s goals was to review extant rules governing real estate professionals to ensure consumers are fairly represented. The government is slated to begin public consultation on various proposals for changes to the relevant rules and penalties.
“The seller will want the highest possible price and most favourable terms they can get, and the buyer will want to pay the lowest price or negotiate the most favourable terms possible,” a government discussion paper noted, as quoted by The Canadian Press.
“These competing interests may make it challenging for registrants involved in these types of transactions to meet their obligations to their clients or to be able to advocate effectively on behalf of either party.”
Ontario Real Estate Association CEO Tim Hudak welcomed the review since the governing legislation dates back to 2002.
“The world of real estate has changed tremendously in the last 15 years – much higher home prices, more sophisticated consumers, greater technology,” he said.
Consumers have raised concerns that the financial incentives in double-ended deals might lead to agents engaging in unethical behaviour, the government says in its paper.
“This divided loyalty and the associated risks may leave some consumers vulnerable even when written consent is obtained and the necessary disclosures … have been made.”
Currently, double ending is allowed if all of the clients the agent is representing give their consent to the arrangement in writing. Under the government’s proposed changes, different agents from the same brokerage could represent the buyer and the seller in a transaction. The “limited exceptions” to the double-ending ban would be if there is a private arrangement between family members or in a small market where there are very few agents.
Ontario stated its proposed new model is similar to how British Columbia, Alberta, Nova Scotia, and Manitoba approach multiple representation in real estate deals. The provincial government added that it is looking to those jurisdictions to learn best practices.
Specialty licences for realtors should also be considered, Hudak said. That way, if an agent claims they are an expert in commercial or condo or cottage properties, they should be able to obtain a designation to back that up, he explained.
Related Stories:
Stiffer penalties can deter double-ending - B.C. advisory group
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One of the plan’s goals was to review extant rules governing real estate professionals to ensure consumers are fairly represented. The government is slated to begin public consultation on various proposals for changes to the relevant rules and penalties.
“The seller will want the highest possible price and most favourable terms they can get, and the buyer will want to pay the lowest price or negotiate the most favourable terms possible,” a government discussion paper noted, as quoted by The Canadian Press.
“These competing interests may make it challenging for registrants involved in these types of transactions to meet their obligations to their clients or to be able to advocate effectively on behalf of either party.”
Ontario Real Estate Association CEO Tim Hudak welcomed the review since the governing legislation dates back to 2002.
“The world of real estate has changed tremendously in the last 15 years – much higher home prices, more sophisticated consumers, greater technology,” he said.
Consumers have raised concerns that the financial incentives in double-ended deals might lead to agents engaging in unethical behaviour, the government says in its paper.
“This divided loyalty and the associated risks may leave some consumers vulnerable even when written consent is obtained and the necessary disclosures … have been made.”
Currently, double ending is allowed if all of the clients the agent is representing give their consent to the arrangement in writing. Under the government’s proposed changes, different agents from the same brokerage could represent the buyer and the seller in a transaction. The “limited exceptions” to the double-ending ban would be if there is a private arrangement between family members or in a small market where there are very few agents.
Ontario stated its proposed new model is similar to how British Columbia, Alberta, Nova Scotia, and Manitoba approach multiple representation in real estate deals. The provincial government added that it is looking to those jurisdictions to learn best practices.
Specialty licences for realtors should also be considered, Hudak said. That way, if an agent claims they are an expert in commercial or condo or cottage properties, they should be able to obtain a designation to back that up, he explained.
Related Stories:
Stiffer penalties can deter double-ending - B.C. advisory group
Hidden cameras reveal Toronto agents peddling insider information
