Humber/Ontario Real Estate Course 4 Exam Practice

What is multiple representation, and under what conditions is it permissible?

1. Is prohibited by law.

2. Occurs strictly in situations where a salesperson within a brokerage is representing both buyer and seller in a transaction.

3. Does not apply to situations where two salespersons representing the buyer and seller respectively are employed by the same brokerage, but are located in different branch offices.

4. Is permissible if the informed written consent of all clients involved is obtained by the brokerage.

5. Requires mutual agreement but no written consent.

The correct answer is: Is permissible if the informed written consent of all clients involved is obtained by the brokerage.

Multiple representation refers to a scenario in real estate transactions where a single brokerage represents both the seller and the buyer. This practice is particularly sensitive because it involves a potential conflict of interest, given that the same agent or brokerage is working on behalf of two parties with opposing interests. The legitimacy of multiple representation hinges on the requirement that informed written consent from all clients involved must be obtained. This means that both the buyer and seller must fully understand the implications of having the same brokerage represent them, the nature of the fiduciary duties owed, and any potential conflicts that may arise. Only after obtaining this explicit consent can the brokerage proceed with multiple representation. The other options detail conditions that either misrepresent the law or do not fully address the requirement for consent. For instance, it is not outright prohibited by law; instead, it is regulated and requires consent, which is what makes option D the correct choice.