7 Elements of Disclosure for Consumers
In accordance with the law, there are 7 matters which must be covered by the real estate professional before entering into a contract with a consumer.
Here is the list:
Before entering into an agreement with a buyer or seller in respect of trading in real estate, a brokerage shall, at the earliest practicable opportunity, inform the buyer or seller of the following:
1. The types of service alternatives that are available in the circumstances, including a representation agreement or another type of agreement.
2. The services that the brokerage would provide under the agreement.
3. The fact that circumstances could arise in which the brokerage could represent more than one client in respect of the same trade in real estate, but that the brokerage could not do this unless all of the clients represented by the brokerage in respect of that trade consented in writing.
4. The nature of the services that the brokerage would provide to each client if the brokerage represents more than one client in respect of the same trade in real estate.
5. The fact that circumstances could arise in which the brokerage could provide services to more than one customer in respect of the same trade in real estate.
6. The fact that circumstances could arise in which the brokerage could, in respect of the same trade in real estate, both represent clients and provide services to customers.
7. The restricted nature of the services that the brokerage would provide to a customer in respect of a trade in real estate if the brokerage also represents a client in respect of that trade.
You will find this set forth in the Code of Ethics passed pursuant to the Real Estate and Business Brokers Act, 2002 (s.10 entitled Information Before Agreements).
The Ontario Real Estate Association (OREA) has produced a document entitled “Working with a Realtor” which attempts to address these issues.
Going forward, we will look at each of these individual requirements on a “one by one” basis. In addition, we will also review the WWR document carefully.
You might certainly appreciate that a good many real estate agents do not have a conversation at all around these points, and further, perhaps make only cursory reference to the WWR document.
My intention with this series is provide some information and material which real estate professionals could use for the purposes of compliance with the Code.
Brian Madigan LL.B., Broker