Unit 5-2: Conflict of interest Flashcards
3 circumstances
competing interests: clients from same brokerage have competing interests (want same property)
opposing interests: clients at same brokerage have opposition (seller wants highest price, buyers want lowest)
brokerage interests: direct - real estate prof wants to buy clients property; indirect - business relationship w/ lawyer who wants to buy property)
Attributed knowledge
under common law, brokerages cannot represent multiple clients in same transaction
Process for managing conflict
Recognize
Avoid
Disclose if can’t avoid
Seek client’s direction
Obtain client consent
Terminate if above won’t work
How to disclose conflict
the nature of it
how it might affect client
implications and consequences of proceeding
client can get legal advice about it
Brokerage direct conflicts of interest
referrals: knowing receipt of monies coming
personal trade: having a transaction w/ client of brokerage
Transaction brokerage
both clients consent to it; alters representation relationship by modifying agency responsibilities in designated agency
option for resolving conflict with opposing interests by same brokerage or agent in same transaction
Transaction facilitator
prof who has been engaged by clients under brokerage agreement to facilitate services to clients in same trade
Facilitation services
Timely communication
Provide standard forms/agreements
Prep all docs
Provide real estate info/stats
Give list of service providers
Present offers/counters
Keep clients informed
Comply with Act and rules
Assist to reach agreements
Facilitators CANNOT provide
confidential advice
favourable terms negotiation
disclose clients instructions
obey lawful instructions contrary to other clients’
Transaction brokerage NOT APPROPRIATE
client incapacitated
brokerage or agent is in personal trade
brokerage or agent has business/family relationship
