The rule under REBBA 2002
Section 16 of the old Code of Ethics forbade a brokerage from representing more than one client in the same trade unless it had disclosed two things at the earliest practicable opportunity: that it proposed to act for more than one client, and how its obligations would change if it did. Section 17 added a personal duty on the registrant to inform all parties, in writing and before any offer, of the nature of the relationships.
The reason is simple. An agent negotiating for you cannot also negotiate against you. Once a brokerage acts for both sides it must become neutral on price and cannot share confidential information, which weakens what it does for each client. You are entitled to know that before deciding whether to accept it.
What a breach looks like
In the Mustafa Zia decision the buyer, a corporation he controlled, was represented by a colleague at his own brokerage. The offer was presented on 17 March 2017 with no consent sought. A “Confirmation of Co-operation and Representation” form noting that the buyer used the same brokerage was signed two days later, at acceptance. RECO found this was too late and not enough: consent has to come before the offer, after a real explanation. The breach was of sections 4, 17, 38 and 2(1) in respect of 16.
What changed under TRESA
The Trust in Real Estate Services Act took full effect on 1 December 2023. It replaced “customer” status with a clearer client/self-represented split, introduced designated representation, in which different registrants within one brokerage can each represent one side, and requires brokerages to give you RECO’s Information Guide before you sign anything. Multiple representation still exists and still needs your informed written consent. The Zia decision was made under the old Act but the duty it enforces is, if anything, stricter now.
What to do
- Before signing a representation agreement, ask: “If a buyer comes through your brokerage, who represents me?”
- If you are asked to consent to multiple representation, ask what the brokerage will no longer do for you. Get the answer in writing.
- Consent must come before the offer. A form signed at acceptance, as in the Zia case, does not cure a missing consent.
- If you feel pressured, say you want your own lawyer to see the paperwork. That is what saved the sellers in 2017.