Ontario To Ban Double Ending?
What is double ending?
Double ending, as it refers to a real estate deal, occurs when one agent represents the sellers and the buyers.
Double ending is also called multiple representation.
What are the rules just now?
In 2016, the Real Estate Council of Ontario (RECO) issued a reminder on regulations surrounding the practice:
- may only occur if both the parties (buyer and seller) provide their written consent.
- brokerage is obligated to provide each of the two clients with notice, and an explanation of the brokerage’s obligations.
- The client always has the right to not consent to multiple representation, and elect to get their own outside representation from another brokerage. They may also elect to be treated as a customer instead of as a client.
Why Do Buyers and Sellers Agree To It?
They assume they will save themselves money. It is not uncommon for an agent representing sellers to discount commission amounts if no other Realtor is involved in the deal.
Could it cost you more in the long run? This is a very real possibility. You are taking a large leap of faith in not having your own personal representation.
Will It Be Banned?
Perhaps. The Ontario Government has 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 Government discussion paper offers the following comments:
“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. 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.”
What Does The Industry Say?
OREA CEO Tim Hudak offered the following comments:
“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. 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.”