Humber/Ontario Real Estate Course 3 Exam Practice

In a multiple representation scenario, what is required of the brokerage?

1. Owes full, unlimited duty of care to both buyer and seller.

2. Owes fiduciary duties to both buyers and sellers.

3. Need only obtain verbal consent from parties involved.

4. Focuses primarily on the interests of the party initiating the contact.

5. Discloses all conflict of interest situations.

6. Secures informed consent when the purchase agreement is signed.

The correct answer is: Owes fiduciary duties to both buyers and sellers.

In a multiple representation scenario, the brokerage must maintain fiduciary duties to both the buyer and the seller. This means that the brokerage is legally and ethically obligated to act in the best interests of both parties while also ensuring fairness and transparency in the transaction. Fiduciary duties typically encompass loyalty, confidentiality, full disclosure, and the exercise of reasonable care and skill. This is crucial because multiple representation involves a situation where the same brokerage represents both the buyer and the seller, creating potential conflicts of interest. Maintaining these fiduciary duties helps to mitigate those conflicts and ensures that all parties are treated fairly and that their interests are adequately protected throughout the transaction process. Securing informed consent from both parties and being transparent about the nature of the representation is essential to maintaining a trustworthy relationship.