On­tario pro­poses ban­ning real es­tate agents from rep­re­sent­ing seller and buyer

Realty Classifieds - - FRONT PAGE - By Allison Jones

Toronto: On­tario is propos­ing ban­ning the prac­tice of dou­ble end­ing, in which a real es­tate agent rep­re­sents both a buyer and a seller in a trans­ac­tion. The prov­ince’s Lib­eral gov­ern­ment an­nounced a 16-point hous­ing plan ear­lier this year, with cen­tre­piece planks of a 15 per cent for­eign buyer tax and ex­panded rent con­trols. Another plank was re­view­ing the rules for real es­tate agents to en­sure con­sumers are fairly rep­re­sented. The gov­ern­ment has now pub­lished sev­eral pro­pos­als for changes to real es­tate agent rules and penal­ties, and is seek­ing pub­lic con­sul­ta­tion on them. One of the pro­pos­als is to ban, with some lim­ited ex­cep­tions, agents from rep­re­sent­ing both the buyer and seller or more than one po­ten­tial buyer in a trade. “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 says. “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.” The On­tario Real Es­tate As­so­ci­a­tion wel­comed the re­view since the gov­ern­ing leg­is­la­tion dates back to 2002, said CEO Tim Hu­dak. “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. Con­sumer Ser­vices Min­is­ter Tracy MacCharles says the gov­ern­ment wants to make sure that On­tario home­buy­ers are pro­tected and not be­ing harmed by un­eth­i­cal real es­tate prac­tices. “The prac­tice of mul­ti­ple rep­re­sen­ta­tion or ‘dou­ble end­ing’ puts would-be home­own­ers at risk of un­eth­i­cal be­hav­iour,” MacCharles said Wed­nes­day. On­tario says its pro­posed new model is sim­i­lar to how Bri­tish Columbia, Al­berta, Nova Sco­tia and Man­i­toba ap­proach mul­ti­ple rep­re­sen­ta­tion in real es­tate deals. It is look­ing to those ju­ris­dic­tions to learn best prac­tices. OREA would also like to see the gov­ern­ment ad­dress sev­eral other ar­eas, Hu­dak said, in­clud­ing so-called es­ca­la­tion clauses, which say a buyer will top the high­est com­pet­ing of­fer, up to a cer­tain amount. More com­mon in the U.S., they have re­cently been pop­ping up in On­tario, Hu­dak said. “An un­eth­i­cal per­son could im­me­di­ately cause you to go to the high­est price you’re will­ing to pay,’’ Hu­dak said. “In or­der for a clause to work you’d have to find out what other peo­ple are bid­ding and that cur­rently breaks the code of ethics to pro­tect con­sumers’ pri­vacy.” 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 said. Real­tors have also been push­ing for the abil­ity to form per­sonal cor­po­ra­tions. There is al­ready a bill be­fore the leg­is­la­ture that would al­low this that has passed sec­ond read­ing. The gov­ern­ment is also con­sid­er­ing in­creas­ing the max­i­mum fine for sales­peo­ple and bro­kers who vi­o­late a code of ethics from $25,000 to $50,000 and $100,000 for bro­ker­ages. A sec­ond and broader phase of re­view­ing On­tario real es­tate rules will start in the spring of 2018.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.