Humber/Ontario Real Estate Course 4 Exam Practice

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A brokerage lists a property for a seller and now has a buyer client who submits an offer on that property which is subsequently accepted. Both seller and buyer clients have signed representation agreements and agreed to pay remuneration. In this situation, the brokerage:

Can only collect remuneration from one party to the transaction.
Is entitled to receive remuneration from both regardless of whether or not the two clients realize that these are being paid.
Is entitled to receive remuneration from both, if both clients are informed verbally of this fact.
Is entitled to receive remuneration from both, if this fact is fully disclosed in writing to both clients.

The correct answer is: Is entitled to receive remuneration from both, if this fact is fully disclosed in writing to both clients.

In this scenario, the brokerage's entitlement to receive remuneration from both the seller and the buyer hinges on the principles of full disclosure. The correct answer stems from the requirement that both clients must be adequately informed of the brokerage's dual role in the transaction. By fully disclosing the remuneration arrangement in writing to both parties, the brokerage ensures that they are aware of the financial obligations before the transaction proceeds. This written disclosure is essential because it protects the interests of both the seller and the buyer, allowing them to make informed decisions with a clear understanding of the brokerage's role and responsibilities. It also fulfills legal and ethical obligations, which include transparency and consent regarding financial relationships. While verbal disclosures can occur, they may not provide the same level of clarity and protection as written ones. Therefore, the requirement for written disclosure reinforces trust in the brokerage and compliance with real estate regulations, which is why this option accurately reflects the brokerage's rights and obligations in the transaction. This clear communication helps prevent potential disputes or misunderstandings regarding remuneration throughout the course of the real estate transaction.