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OBLIGATIONS OF SOLE AGENTS & DUAL AGENTS
In a real estate transaction, a brokerage (known as the “agent”) and its industry members (known as the “real estate agent(s)”) owes certain general and fiduciary obligations to their client(s). The type of obligations owed by the brokerage and their real estate agents to the client depends on whether a sole agency or dual agency relationship exists.
A sole agency relationship arises when the brokerage represents either the seller or buyer in a transaction. The brokerage’s real estate agent provides representation, on behalf of the brokerage, to either the seller or the buyer.
A dual agency relationship arises when the brokerage represents the seller and the buyer in the same transaction. The brokerage’s real estate agent(s) provide representation, on behalf of the brokerage, to both the seller and buyer in the same transaction.
The Real Estate Council of Alberta has provided a handy table that outlines the general and fiduciary obligations an agent owes to their client in a sole and dual agency relationship.
|
General Obligations |
Sole Agency |
Dual Agency |
|
Perform mandate |
Yes |
Yes |
|
Exercise skill and care |
Yes |
Yes |
|
Obey lawful instructions |
Yes |
Yes* |
|
Honesty |
Yes |
Yes |
|
Promote the interests of the client |
Yes |
No |
|
Provide confidential advice on relevant matters |
Yes |
No |
|
Help negotiate and draft favorable terms |
Yes |
No |
|
Recommend relevant experts |
Yes |
No |
|
Disclose Information concerning the other party’s max/min price |
Yes |
No |
|
Disclose information concerning the other party’s motivation |
Yes |
No |
|
Disclose information concerning material latent defects affecting the property |
Yes |
Yes |
|
Disclose information concerning the material facts relevant to the buyer’s ability to buy the seller’s property |
Yes |
Yes |
|
Disclose information concerning other confidential information obtained from the other party (i.e. personal information) |
Yes |
No |
|
Present offers and counteroffers to and from the buyer and seller |
Yes |
Yes |
|
Convey to the buyer and seller information that either wishes communicated to the other |
Yes |
Yes |
|
Keep the buyer and seller informed regarding progress of the transaction |
Yes |
Yes |
|
Account for fund (i.e. deposits) |
Yes |
Yes |
|
|
||
|
Fiduciary Obligations |
Sole Agency |
Dual Agency |
|
Undivided loyalty (act in their best interests) |
Yes |
No |
|
Avoid all conflicts of interest |
Yes |
Yes |
|
Disclose all personal conflicts of interest |
Yes |
Yes |
|
Not misuse confidential information |
Yes |
Yes |
|
No secret profits |
Yes |
Yes |
Note: * Except where there is a conflict of interest or conflicting instructions.
If you have any questions concerning agency relationships, please do not hesitate to contact Khemka Law or counsel of your choosing. We are always here to assist you and your clients. Thank you for your time and consideration.
Sincerely,
Pranav Khemka
Pranav Khemka, Barrister & Solicitor
T: (403) 457-9577 | F: (403) 457-9578
E: pkhemka@khemkalaw.com
Suite 202, 5403 Crowchild Trail NW, Calgary, AB T3B 4Z1 | T: (403) 457-9577 | F: (403) 457-9578
LEGAL: The Thursday Tidbit provides general information and does not constitute legal advice. Circumstances may vary and no lawyer-client relationship is established from the use and reliance of this information. You are strongly advised to seek any legal advice by directly contacting Khemka Law or counsel of your choosing. Khemka Law does not warrant or guarantee the quality, accuracy or completeness of any information found within this Thursday Tidbit.
