Finally, the Government decided to take measures to end the conflict of interest that can quickly arise when one agent represents the buyer and the seller at the same time. To put it simply, so far, agents could opt for trading information for commissions and work in their own interest by manipulating clients. Finally, such practices are about to be made illegal, offering customers a more transparent market with agents who are not given an opportunity to play musical chairs with their clients.
Also, they will be banned from representing multiple buyers in one trade. Of course, such a ban would also take the burden off real estate agents who would be able to act more professionally representing only one party and acting in its interest, unbiased.
The Government still permits two agents from the same real estate company to take on clients in the same sale, whereby one may represent the buyer, and the other, the seller.
Finally, the Government is taking action, confirming what has been already stated a hundred times: the seller will always want to sell at the highest possible price and that the buyer will always want to buy at the lowest possible. Representing both creates a vicious cycle for the realtor who may be tempted to turn the deal in their own favor. To avoid misconduct and misrepresentation favoring one client over the other, the Ontario Government added the ban to the April housing plan consisting of sixteen points.
Such practices, where multiple representation is not allowed, are already in place in Nova Scotia, Alberta, British Columbia, etc., and Ontario decided to align its real estate regulations with these jurisdictions. The Government may also raise the maximum fee for breaches of the regulations, which could go up to $50,000 for individual agents and $100,000 for brokerage companies.
Exceptions: When Can An Agent Represent Both Parties?
The Ontario Government left an open window to agents to represent clients at both ends, only if all parties concerned agree to such an arrangement which has to be made in written form. Such an arrangement usually applies when it concerns trades between close family members or in the case of small areas where not many agents operate.
While some individual agents were not happy about the tightened leash, justifying the double ending practice as quick and easy, the Ontario Real Estate Association (OREA) is fully behind the amendments. In fact, OREA would also welcome a stricter licensing policy which would raise the bar for potential realtors. They also advocate for higher standards when it comes to realtor license maintenance which includes online tests that can be taken as many time as one wants.
OREA wants to work on a better reputation of the real estate industry by strengthening the code of ethics, educational programs, and license maintenance. Some even go so far and blame the agents for the drop in sales in the market in the past few months.