Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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Completing the Confirmation of Co-operation and Representation when in Multiple Representation or Dual Agency

March 26, 2017 - Updated: March 26, 2017

Completing the Confirmation of Co-operation and Representation when in Multiple Representation or Dual Agency
 

An issue which arises frequently concerns the proper completion of the CCR Form when a Brokerage is in Multiple Representation.
 

It’s important at the outset to get our terminology straight.
 

Multiple Representation is the term used to describe the circumstances where a single Brokerage represents both the Seller and the Buyer. There are further examples, but we won’t deal with them here.
 

Multiple Representation is the expression which appears in the Real Estate and Business Brokers Act, 2002. Previously, in Ontario the terminology was “dual agency”. That is the expression which applies throughout much of the industry including other jurisdictions (Provinces and States) and the Canadian Real Estate Association.
 

Co-operating Brokerage is used by CREA, OREA and the local real estate boards. It falls under the MLS system. It is not a REBBA, 2002 expression.
 

The Confirmation of Co-operation and Representation (CCR) deals with identification of the parties, a description of the roles, and an agreement regarding the payment of commission.
 

Let’s look at the CCR in terms of completion for this specific purpose. Here’s our fact situation:
 

Seller: Mary Brown

Buyer: John Smith

Property: 123 Main Street

Agent for Seller: ABC Brokerage

Agent for Buyer: ABC Brokerage

Sales Representative: Fred Flintstone for Seller

Sales Representative: Barney Rubble for Buyer
 

INSURANCE
 

At the outset, the first relevant section deals with insurance and provides as follows:
 

“DECLARATION OF INSURANCE: The undersigned salesperson/broker representative(s) of the Brokerage(s) hereby declare that he/she is insured as required by the Real Estate and Business Brokers Act, 2002 (REBBA 2002) and Regulations.”
 

LISTING BROKERAGE
 

The next part of the document reads as follows:
 

1. LISTING BROKERAGE
 

a) The Listing Brokerage represents the interests of the Seller in this transaction. It is further understood and agreed that:
 

1) The Listing Brokerage is not representing or providing Customer Service to the Buyer. (If the Buyer is working with a Co-operating Brokerage, Section 3 is to be completed by Co-operating Brokerage)
 

2) The Listing Brokerage is providing Customer Service to the Buyer.


On the actual document check boxes will appear. Fred Flintstone would ordinarily indicate that he acts for the Seller. So he would mark 1 a). That’s the usual situation. But, that doesn’t apply for multiple representation. This part is tricky. If Fred were filling it out first he might immediately go to 1b), but after Barney fills out 3a), then it is quite appropriate for Fred to fill out both 1a) and 1b).
 

This brings us to 1. b) for multiple representation situations. Here’s what that sections says:
 

b) MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and the Buyer, with their consent, for this transaction.
 

The Listing Brokerage must be impartial and equally protect the interests of the Seller and the Buyer in this transaction.
 

The Listing Brokerage has a duty of full disclosure to both the Seller and the Buyer, including a requirement to disclose all factual information about the property known to the Listing Brokerage.
 

However, the Listing Brokerage shall not disclose:
 

• That the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;

• That the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;

• The motivation of or personal information about the Seller or Buyer, unless otherwise instructed in writing by the party to which the information applies, or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;

• The price the Buyer should offer or the price the Seller should accept;

• And; the Listing Brokerage shall not disclose to the Buyer the terms of any other offer.

 

However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the property will be disclosed to both Seller and Buyer to assist them to come to their own conclusions.
 

Those were the multiple representation rules. That is the primary section to be checked off, namely 1 b).
 

Paragraph 2 is not applicable and should simply be ignored in this situation.

 

Paragraph 3 is set out as follows:

 

3. Co-operating Brokerage completes Section 3 and Listing Brokerage completes Section 1.
 

CO-OPERATING BROKERAGE- REPRESENTATION:

a) The Co-operating Brokerage represents the interests of the Buyer in this transaction.
 

b) The Co-operating Brokerage is providing Customer Service to the Buyer in this transaction.
 

c) The Co-operating Brokerage is not representing the Buyer and has not entered into an agreement to provide customer service(s) to the Buyer.
 

In this situation the Co-operating Brokerage is called upon to fill out paragraph 3. This is slightly different than paragraph 1, where there were no such similar instructions for the Listing Brokerage.
 

I suppose those paragraph 1 instructions are then contained right here.
 

Nevertheless, this document is usually drafted by the Buyer’s representative with the Offer in the first place. Generally, those check marks are already “filled in” by the Buyer’s Brokerage rather than the Listing Brokerage.

 

In any event, Barney Rubble would already realize that both he and Fred Flintstone were with ABC Brokerage. So, it would seem natural for him to have already filled out paragraph 1 in advance. However, please note that the instructions on how to complete paragraph 1 are contained in paragraph 3.
 

Barney Rubble should select 3 a) and check that.
 

The next step in the process is to deal with the matter of commission.
 

Here’s the paragraph continued:
 

CO-OPERATING BROKERAGE- COMMISSION:

a) The Listing Brokerage will pay the Co-operating Brokerage the commission as indicated in the MLS® information for the property ……………………………………………................................... to be paid from the amount paid by the Seller to the Listing Brokerage. (Commission As Indicated In MLS® Information)
 

b) The Co-operating Brokerage will be paid as follows: __________________________________________________


So, effectively, there are two choices: 1) the commission as set out in the MLS Listing or 2) something else.
 

In all likelihood, 3 a) will be selected.
 

This is the next section:
 

Additional comments and/or disclosures by Co-operating Brokerage: (e.g., The Co-operating Brokerage represents more than one Buyer offering on this property.) ..................................................................................................................


This section is not named. There is no paragraph number. It deals with the matter of disclosures and comments. Three lines are left to enable these comments and disclosures to be made.
 

The section that follows states:
 

          Commission will be payable as described above, plus applicable taxes.
 

Ordinarily, one would think that this statement would have been in the Commission paragraph above, but it wasn’t.
 

What follows is a statement about Commission Trusts:

         

COMMISSION TRUST AGREEMENT: If the above Co-operating Brokerage is receiving payment of commission from the Listing Brokerage, then the agreement between Listing Brokerage and Co-operating Brokerage further includes a Commission Trust Agreement, the consideration for which is the Co-operating Brokerage procuring an offer for a trade of the property, acceptable to the Seller. This Commission Trust Agreement shall be subject to and governed by the MLS® rules and regulations pertaining to commission trusts of the Listing Brokerage’s local real estate board, if the local board’s MLS® rules and regulations so provide. Otherwise, the provisions of the OREA recommended MLS® rules and regulations shall apply to this Commission Trust Agreement. For the purpose of this Commission Trust Agreement, the Commission Trust Amount shall be the amount noted in Section 3 above. The Listing Brokerage hereby declares that all monies received in connection with the trade shall constitute a Commission Trust and shall be held, in trust, for the Co-operating Brokerage under the terms of the applicable MLS® rules and regulations.
 

This is simply a statement. There is no paragraph number. No signatures or initials are required. It is important in order to set the Commission Trust provisions in place. Insurance will apply. If this matter were overlooked then insurance may not apply.
 

Signature and Execution Section
 

(Name of Co-operating/Buyer Brokerage) .....................................................................................................

Tel:. ......................................... Fax: .........

Date:.............................

(Authorized to bind the Co-operating/Buyer Brokerage) ........................................................................................................

(Print Name of Broker/Salesperson Representative of the Brokerage)

 

(Name of Co-operating/Buyer Brokerage) .....................................................................................................

Tel:. ......................................... Fax: .........

Date:.............................

(Authorized to bind the Listing Brokerage) ........................................................................................................

(Print Name of Broker/Salesperson Representative of the Brokerage)

 

In this section, both Brokerages are made parties to the “agreement”.

 

The representatives sign. The Brokerages themselves do not have to sign.

 

In a multiple representation situation, Barney will sign first and Fred will sign second. Barney will refer to ABC as the Co-operating Brokerage and Fred will refer to ABC as the Listing Brokerage. While, in fact, it is the same Brokerage with dual responsibilities here, for the purposes of the MLS system it is the Listing Brokerage and the Co-operating Brokerage.

 

Multiple Representation

 

CONSENT FOR MULTIPLE REPRESENTATION (To be completed only if the Brokerage represents more than one client for the transaction) The Buyer/Seller consent with their initials to their Brokerage representing more than one client for this transaction.
 

BUYER’S INITIALS                        SELLER’S INITIALS

 

This particular provision is included in a box. The Buyer and the Seller are not made parties to the CCR document itself or the commission arrangements as between the parties, However, they do “initial” the consent for multiple representation.

 

You might think that they should really “sign” this document since it is so important, but, they are asked to place their initials here. And, their initials are to evidence their consent.

 

Legally, initials also constitutes “signing one’s name”, so I suppose it’s sufficient.

 

The final section is the Acknowledgement:

 

          ACKNOWLEDGEMENT

 

 

I have received, read, and understand the above information.

 

Both the Buyer and the Seller will sign with their full signatures and date the document

 

Summary of Steps in Outlined Procedure

 

·        Barney will draft the CCR

·        Barney will complete paragraph 3 setting out that ABC represents the Buyer

·        John Smith will affix his initials to the multiple representation consent

·        Barney will sign the CCR on behalf of ABC as Co-operating Brokerage

·        The document will be delivered to Fred

·        Fred will indicate that ABC represents the Seller, Mary Brown

·        Fred will then complete the Multiple Representation section

·        Mary Brown will affix her initials to the multiple representation consent

·        Fred will sign the CCR on behalf of ABC as Listing Brokerage

·        Mary Brown will affix her signature to the Acknowledgement

·        John Smith will affix his signature to the Acknowledgement

 

You will appreciate that John Smith couldn’t sign the Acknowledgment until the entire document had all been filled out, and Paragraph 1 was yet to be completed by Fred, the first time he saw it.

 

Summary of Steps in the Short-cut Procedure

 

·        Barney will prepare the entire CCR, including paragraphs 1a and 1b, as well as 3

·        Barney will sign as indicated

·        John Smith will initial and sign (since the document is completed)

·        Barney will deliver the CCR to Fred

·        Fred will sign as indicated

·        Mary Smith will initial and sign

 

You will see that the short-cut makes some sense. It’s not the outlined procedure in the document. But, it’s not wrong. It’s just as correct, since Barney was actually the first person to be aware of the conflict of interest and multiple representation situation.

 

The CCR is somewhat confusing in its presentation, but there are at least two ways to fill it out correctly for multiple representation situations.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: ccr confirmation of co-operation and representation dual agency multiple representation orea conflict of interest
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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