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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.


Data supplied by CREB®’s MLS® System. CREB® is the owner of the copyright in its MLS® System. The Listing data is deemed reliable but is not guaranteed accurate by CREB®.
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