Buying real estate is a major financial decision which involves placing trust in many professionals. From real estate agents to insurance brokers, there are many opportunities for professionals to help or hurt a prospective buyer. The Ontario government recently proposed legislation to prohibit real estate agents from representing both the buyer and seller in a transaction. They say that the practice, commonly referred to as "double ending" can leave one or both parties vulnerable to a real estate agent who potentially has different interests. Many Toronto residents believe this real estate law would protect buyers and sellers alike, while others aren't so sure.
Proponents believe that double dipping presents a clear conflict of interest. Buyers and sellers may not get honest advice from someone representing both parties. Additionally, a real estate agent could take steps to ensure the buyer that the agent represents is given priority and the agent's bid is accepted over others. This creates unfairness in the market and puts other buyers at a disadvantage, a particular disadvantage in highly competitive markets like Toronto, GTA and Vaughan. In extreme cases, it could prevent a seller from getting the best offer possible.
The Real Estate Council of Ontario supports the bill. It also supports increased penalties for agents who do not follow the rules. The current punishment for real estate professionals who go against policy is a fine up to $50,000 or the loss of real estate registration privileges. RECO is highly involved in these investigations and supports the Ontario government with any punishments, signaling its commitment to consumer trust.
Toronto consumers will need someone who knows the ins and outs of real estate law before becoming involved in the selling or buying of property. This is a serious purchase, and it is treated as such by the Ontario government, professional associations and the general public. Those who are unsure how to protect themselves from unfair treatment on either side are advised to consult a lawyer who focuses his or her practice in real estate law.
Source: The Toronto Star, "Consumers deserve trust and transparency in real estate transactions", Mike Cusano, July 14, 2017