Humber/Ontario Real Estate Course 4 Exam Practice

Under a multiple representation scenario where a conflict cannot be resolved, what must the brokerage do?

1. Discontinue acting for both clients in the negotiation.

2. Proceed with the deal while advising both parties of potential issues.

3. Cancel the listing and wait for 60 days before re-listing.

4. Fire one of the salespersons involved.

5. Continue with the listing but seek additional guidance.

6. Allow one party to continue independently with their own representative.

The correct answer is: Discontinue acting for both clients in the negotiation.

The correct response highlights the brokerage's responsibility to prioritize the interests of its clients while maintaining compliance with regulatory requirements. In a situation where a conflict of interest cannot be resolved in a multiple representation scenario, the most ethical and prudent course of action is to discontinue acting for both clients. This ensures that the brokerage does not favor one party over the other and upholds the integrity of the professional relationship. By stepping back, the brokerage protects both clients from potential bias or perceived unfairness in negotiations. This approach also aligns with the legal and ethical requirements set forth by regulatory bodies governing real estate practices, ensuring that both clients have the opportunity to seek independent representation and receive the full value of their negotiations without conflicts influencing the outcomes. The other options involve actions that could lead to further complications or ethical dilemmas. Continuing with the deal while advising both parties about potential issues may not eliminate the conflict of interest and could lead to accusations of partiality. Canceling the listing for a set period or firing a salesperson do not address the fundamental issue of the conflict. Allowing one party to proceed independently may not be permissible under the terms of multiple representation without the consent of all parties. Seeking additional guidance without resolving the conflict may not provide a satisfactory resolution for the clients involved.