Humber/Ontario Real Estate Course 3 Exam Practice

Which fiduciary relationship exists when the owner of a potential site does not want representation but will pay remuneration upon a successful sale?

1. ABC Realty Inc. owes a duty of care to ACME Network Systems Inc. in everything that is done or ought to be done for that client.

2. ABC Realty Inc. is involved in a multiple representation, as it owes fiduciary duties to both the buyer and the seller owner.

3. The salesperson with ABC Realty Inc. has fiduciary obligations to the site owner.

4. The seller is not represented by the brokerage and, therefore, is not owed a duty of care during negotiations.

The correct answer is: The salesperson with ABC Realty Inc. has fiduciary obligations to the site owner.

The scenario describes a situation in which the owner of a potential site wishes to handle their own representation but is willing to pay a commission upon a successful sale. In such cases, the salesperson with ABC Realty Inc. holds fiduciary obligations to the site owner, despite the owner's preference for minimal representation. This means that the salesperson must act in the best interests of the owner, providing professional advice and ensuring that the owner's needs and objectives are prioritized during the sales process. Fiduciary obligations entail loyalty, full disclosure, confidentiality, and reasonable care, which remain essential even when the client opts not to engage in full representation. The relationship exists not only because compensation is offered but also due to the inherent reliance that often exists between a property owner and their agent, regardless of the level of desired representation. In this context, the other options do not accurately reflect the nature of the relationship. The first choice suggests a comprehensive duty of care that might not be relevant as the owner does not seek full representation. The second option introduces the idea of multiple representation, which would imply that fiduciary duties extend to both parties; however, that does not apply since the owner is not requesting representation. The last option incorrectly states that the seller is not owed a duty of care