Types of Agencies

Types of Agencies Co-operating Brokerage 2 clients represented by 2 separate brokerages Unintended Multiple Representation 2 customers represented by the same brokerage Single Agency When 1 customer and 1 client are represented by the same brokerage This can be a problem because the buyer (customer) may want to disclose certain personal financial information to the broker, but the broker owes a duty to disclose facts to the seller (client) Typically, the broker will maintain confidentiality of the customer unless otherwise agreed to in writing

Types of Agencies Sub-agency Multiple Representation 1 client is represented by one brokerage and 1 customer is represented by another brokerage Agent for the customer becomes a sub-agent of the agent for the client Each brokerage owes the client of the other brokerage a duty Multiple Representation 2 clients are represented by the same brokerage – the same brokerage represents the client buyer and client seller Previously known as dual agency

Types of Agencies Types of multiple representation agencies: Same brokerage and same brokers/salespersons Same brokerage but different brokers/salespersons Same brokerage but different branches Problems with multiple representation CREA does not recognize MR and there is no precise list of duties that each party is owed in case of MR Dangerous because interests of buyer and seller are in direct competition Written consent needed before the Registrant (salesperson/broker) represents more than a single party in a transaction

Types of Agencies Disclosure for MR should happen twice: There first needs to be verbal disclosure when the Agency Agreement is signed by the client There needs to also be written disclosure and consent before the Agreement of Purchase or Sale (the offer) is made

Common Errors and Representation Problems Representation problems may result from: Not discussing representation with Sellers and Buyers at the earliest possible opportunity Not completing the proper forms Exceeding the scope of authority that is granted by a client Not marketing property that is listed for sale Not finding suitable properties for a buyer Not recognizing a conflict of interest when purchasing a property for personal use as a broker or salesperson (through OREA disclosure form)

Common Errors and Representation Problems Not disclosing extra remuneration received Misrepresenting or not disclosing material information Breaching duties that are contained in the Representation Agreement Not precisely carrying out multiple representation responsibilities, disclosing all requirements to both the seller and buyer