Humber/Ontario Real Estate Course 4 Exam Practice

Two salespersons within a brokerage are working with competing buyer clients who are negotiating to buy the same property listed by that brokerage. For purposes of REBBA, what is the correct interpretation of this situation?

1. The fact that there are two competing buyer clients is not deemed to be multiple representation because the two clients are not involved in the same transaction, but only with the same property.

2. The seller client who owns the property is not part of the multiple representation.

3. This circumstance is deemed to be multiple representation, even though the buyers are not involved in the same transaction.

4. The brokerage must ensure that the competing buyers are aware of each other, prior to either being shown the property.

The correct answer is: This circumstance is deemed to be multiple representation, even though the buyers are not involved in the same transaction.

In this scenario, it is deemed to be multiple representation because multiple clients from the same brokerage are having competing interests regarding the same property, despite the fact that they are not in direct negotiation with each other. Under the Real Estate and Business Brokers Act (REBBA), multiple representation occurs when one brokerage represents both the seller and one or more buyers in a transaction. Even though the buyers are negotiating separately, the key factor lies in the fact that the brokerage has a duty to both prospective buyers. This establishes a situation where the brokerage must navigate the potential conflicts of interest that arise when representing multiple clients with conflicting goals. The regulations require that the brokerage disclose this multiple representation and provide the necessary information to both parties involved. Understanding this context clarifies why the interpretation is significant, as it affects how the brokerage must manage their obligations to both clients and maintain their ethical responsibilities under REBBA. It also highlights the need for transparency and fairness in dealings where competing interests exist within a single brokerage.