Humber/Ontario Real Estate Course 3 Exam Practice

What accurately terminates an agency relationship?

1. When both parties agree.

2. On mutual consent or revocation by the principal.

3. At the point a sale closes.

4. After fiduciary duties are concluded.

5. When the buyer's offer is accepted.

6. When all services are rendered satisfactorily.

The correct answer is: At the point a sale closes.

The correct termination of an agency relationship occurs when both parties agree. This entails mutual consent, where both the principal and the agent come to a decision to end the relationship. Agency relationships are based on the agreement between the two parties, and this can be concluded when there is a clear understanding to terminate the agreement. While the closing of a sale may seem like a logical endpoint for the agency relationship, it is not the only scenario where termination can occur. Agency relationships can be concluded prior to the sale closing, based on the agreement of the parties involved. In contrast, the other options describe scenarios that might not fully encapsulate the completeness of termination of the agency relationship. For example, mutual consent or revocation by the principal is certainly a valid way to terminate the relationship, but it does not highlight the need for agreement from both parties, making it less complete in this context. The point of a sale closing does not always equate to the end of an agency relationship, especially if further obligations exist. Moreover, the conclusion of fiduciary duties does not automatically end the agency relationship, as duties can extend beyond mere performance. Similarly, acceptance of a buyer's offer and rendering services satisfactorily do not inherently terminate the relationship unless mutually agreed upon. In