Should the practice of “Double Ending” be eliminated from Real Estate in Ontario? Well, the Ontario Government is beginning to think so, and they are introducing regulatory changes aimed at fighting rules around the practice. We’ve gathered what we know so far, let’s keep the conversation going!

Watch this 1 minute video to learn more about this hot topic.

 

Possible changes to the RECO Code of Ethics are being discussed. If Mandatory Designated Representation “MDR” is enforced, it would eliminate ‘double-ending’ and would impact considerable changes in the industry.

 
What is “Double Ending”, or Multiple Representation?
 
As it is referred to in the RECO Code of Ethics, Double Ending is the act of one Real Estate Agent representing both a Buyer and Seller in the same transaction*. This is where the Agent receives both ‘ends’ of the commission…the Buyers’ end AND the Sellers’ end.  
 
There is a clear conflict of interest in Double Ending, as a Buyer and a Seller have fundamentally different goals in the purchase/sale on a piece of Real Estate. The Buyer obviously would like to purchase the real estate for the lowest amount possible, while the Seller would like to sell the Real Estate for the highest amount possible, and it gets even more complicated in a Multiple Offer situation.
 
*There is also a description at the Brokerage level. A full definition can be found on the RECO website.
 
Does this happen in our Market? 
 
Yes. This has been a hot topic and under scrutiny for a while in Ontario, but even more so in the last year or so, following the CBC’s Marketplace show “Real estate agents caught breaking the rules on Marketplace’s hidden camera” last Spring, where they did a provocative hidden camera investigation into the issue. Very much worth a watch if you haven’t already seen it. 
 
What we know so far…
 

Even with the conflict of interest the practice has always been allowed in Ontario, but recently legislation is being proposed to ban the practice at some level. It won’t completely eliminate it, as there will be some exceptions in smaller rural settings with very few agents, and some industrial/commercial situations where a specialized level of knowledge and expertise is needed. If this legislation is passed, and the proposed changes are made, we would see a significant impact on the industry, one that many would say is a positive one. 

The proposed changes would see tighter rules and a raise in fines from $25,000 up to $50,000 for individual salespersons that violate the industry’s code of ethics.

It is our aim to provide updates and keep the conversation going about this topic! Can ONE individual represent the best interests of both parties at the same time? How can they?… Why would they? How has it impacted you? What are the benefits or drawbacks to banning the practice of Double Ending? Are you for, or against, the new legislation?

We look forward to hearing your perspective and will keep you posted as the story develops.

– The Chris Keleher Team –

We would like to know your thoughts, opinions and experiences regarding the practice of Double Ending in a Real Estate transaction in Ontario.

 

 

Further Resources:

 

CBC’s “Real Estate Agents Caught Breaking the Rules on Marketplace’s Hidden Camera”

 

Related Articles:  

  • “Ontario Moves to Tighten Rules around Real Estate Agents ‘Double-ending,’ But Won’t Ban the Practice”
    …read more >
  • “What is Multiple Representation in Real Estate?”
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  • “Real Estate Agents Caught Breaking the Rules on Marketplace’s Hidden Camera”
    …read more >
  • “REBBA 2002 & Regulations, Code of Ethics”
    …read more >
  • “Understanding the Pros and Cons of Multiple Representation”
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What are the rules that REALTORS® must follow when they are representing both the Buyer and the Seller? 

Source: PostCity.com

It’s important to remember that the rules for multiple representation apply at the brokerage level, not just to the individual salesperson. So if the buyer and seller are working with the same brokerage, it’s considered multiple representation, even if the buyer and seller are working with different representatives. There are very specific disclosure rules that the brokerage has to follow. First of all, before they begin to represent a buyer or seller, they must inform them that multiple representation could arise, that consent in writing is required, and describe the type of services and service levels that the brokerage would provide in multiple representation.

When the multiple representation situation does arise, the brokerage must tell all Buyers and Sellers that they intend to represent multiple parties, and provide a full explanation of how the brokerage’s obligations to promote and protect each party’s interests will differ compared to if they only represented one party in the trade. Before multiple representation can proceed, all parties must provide written consent. If one of the parties does not consent, then the brokerage must release one of the consumers to seek alternate representation. Last year, we prepared a fact sheet on the pros and cons of multiple representation. There’s key info there for consumers who are concerned about the issue. If a real estate professional is not following the rules, we urge consumers to file a complaint with us so that we can investigate the matter, and take appropriate action.

— Joseph Richer, Registrar of the Real Estate Council of Ontario

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