British Columbia, Alberta, Manitoba and Nova Scotia have already made the decision to prohibit “double-ending,” and the Ontario government is looking to do the same. Supporting the province of Ontario in its proposal to exclude the notion of double-ending a transaction is the Real Estate Council of Ontario (RECO), Ontario’s real estate industry regulator. RECO has expressed its concern over the potential conflict of interest and improper behaviour that could arise from a double-ended transaction.
While reviewing the Real Estate and Business Brokers Act, the province unveiled a plan to prohibit the practice known as “double-ending” where agents represent both parties in a transaction. There is an inherent conflict of interest when trying to represent both sides of a transaction. The province did say it would allow some limited exceptions to the ban, such as allowing the practice to take place in remote areas where there are few realtors. Otherwise, realtors would have to refer one of their clients to another agent for representation, perhaps even a colleague within the same brokerage.
The Ontario Real Estate Association (OREA), which represents roughly 70,000 Realtors, is calling on the province to modify its plans to ban agents from representing both buyers and sellers. OREA has stated that the proposal is too severe and would be unfair to consumers who should be able to choose who to hire as a real estate agent. Instead, the province should consider adopting a new model that allows realtors to work for both sides in a neutral role.
“Transactional Representation” would allow agents to work with both sides of a transaction (if both clients elect the option), but would require the agents to remain neutral and impartial during the transaction. Agents could still provide statistics and information to each side, but could not recommend what price the buyer should offer, which conditions to attach or what strategy to use. This new model would provide the consumer with choice and would not impose a one-size-fits-all solution.
So much has yet to be determined. Should the Ontario government decide to disallow agents from double-ending transactions, the onus will be on the buyer to conduct the same due diligence when selecting a buyer representative, as it would when selecting a listing agent. All parties involved will need to provide further clarification into the different types of representation and how the consumer can best be served. With no real timetable as to whether the Ontario government will implement this proposal, it will be business as usual for the foreseeable future.