Ontario seeks to halt ‘ double ending’ practice

REAL ESTATE Agents represent buyer and seller in transaction

TORONTO• Ontario is proposing banning the practice of double ending, in which a real estate agent represents both a buyer and a seller.

The province’s Liberal government announced a 16-point housing plan earlier this year, with 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 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 the financial incentives in double- ended deals might lead to agents engaging in unethical behaviour, the government says. “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 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 with few agents.

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.