Buyer Representation Agreement Explained (Ontario)
It is sometimes difficult to understand and appreciate legal contracts, particularly when it comes to the fine print.
So, let’s have a look at the standard form Buyer Representation Agreement prepared by the Ontario Real Estate Association (OREA).
We will look at each of the particular clauses in detail. This will assist you to understand the document should it be necessary for you to explain it to a client, or if you are a consumer, in the event that you are being requested to sign one.
This is an Agency document. By using this document the Buyer appoints the Brokerage as his agent. Consequently, some important fiduciary obligations come into play. There are other relationships which might be provided, but this one is “agency”.
The Buyer is the “Principal” and the Brokerage is the “Agent”.
At common law, there are important fiduciary obligations which will apply, including:
These common law duties and obligations have been present for hundreds of years.
There are five primary sources of new legal developments for real estate agents:
- Statutory laws,
- Regulatory laws,
- Changes to the local MLS rules and regulations,
- Discipline cases published by RECO, and
- Decisions by the Courts.
Any agent must keep abreast of continuing significant developments. The current Act, namely the Real Estate and Business Brokers Act, 2002 its and regulations were proclaimed in force 31 March 2006. There are yearly updates to the MLS rules. The decisions by Discipline Committee and Appeals Committee of RECO, the Licence Appeal Tribunal, and various Provincial Courts are published regularly on the RECO website. Practitioners should keep abreast of developments in the law, and one of the best ways would be to enroll in continuing education programs.
When we look at a document such as the Buyer Representation Agreement, it is important to bear in mind the context within which it exists. It will be the Ontario document, 2015 Version which is under review. Other jurisdictions have similar but slightly different documents.
Brian Madigan LL.B., Broker