Who Can Use This Agreement?

If you are licensed for…
When the agreement can be provided
Trading servicesYou can use this agreement when a conflict of interest exists between two current clients, where continuing to act for both of them would amount to “dual agency.”

For example you can use this agreement when:
  1. Your buyer client wants to make an offer on your seller client’s property.
  2. Two different buyer clients ask to you help them make offers on the same property.
  3. Your tenant client asks you to help them lease your landlord client’s property.

You cannot use this form to resolve conflicts that would not amount to dual agency (e.g. to resolve conflicts involving a former client and a current client).

Trading services and rental property management services (applies to trading services in relation to rental property management only)You can use this form when a conflict of interest exists between two current clients, where continuing to act for both of them would amount to “dual agency.”

For example it can be used when:
  1. Your tenant client asks you to help them lease your landlord client’s property.

You cannot use this form to resolve conflicts that would not amount to dual agency (e.g. to resolve conflicts involving a former client and a current client).

Strata management servicesYou do not need to make this disclosure


Overview

This guide is intended to help licensees use the Agreement Regarding Conflict of Interest Between Clients with consumers.

The Agreement Regarding Conflict of Interest Between Clients form is a mandatory Council-approved form and may not be modified or altered.

The agreement allows licensees to resolve conflicts of interest involving two existing clients, where continuing to act for both clients would amount to prohibited “dual agency”.

“Dual agency” occurs when a licensee represents, in a single transaction, two or more parties who have conflicting interests, such as:

  • A buyer and a seller
  • A buyer and a buyer
  • A lessor and a lessee, or
  • An assignor and an assignee.

Some examples of conflicts that would amount to dual agency include:

  1. Your buyer client wants to make an offer on your seller client’s property.
  2. Two different buyer clients ask you to help them make offers on the same property.
  3. Your tenant client asks you to help them lease your landlord client’s property.

If a licensee is faced with one of these conflicts, there are two options:

Option 1: Stop representing both clients and refer each of them to other licensees.

Option 2: Continue representing one of the clients, and stop representing the other client, but only if both clients agree in writing using the Agreement Regarding Conflict of Interest Between Clients.

If either client decides not to sign the agreement, the licensee must stop acting for both clients.

Understanding the Form

The Agreement Regarding Conflict of Interest Between Clients contains three key sections:

  1. An information piece for consumers called “Conflicts of Interest: Understanding Your Options”
  2. Details about the parties involved, and the specific nature of the conflict of interest, and
  3. Mandatory signature sections that must be completed by all of the parties involved in the agreement in order for the agreement to take effect.

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Section 1: The purpose of the first section (Conflicts of Interest: Understanding Your Options) is to explain to the consumer why, when a conflict of interest arises between two current clients of a licensee, the licensee is not allowed to continue representing both clients.

This information section explains that when a licensee is faced with a conflict of interest between current clients, the licensee must either:

  1. Stop acting for both clients and refer each of them to other licensees who will represent their interests in the transaction, or
  2. Ask both clients to sign the Agreement Regarding Conflict of Interest Between Clients, so that the licensee can continue to represent one client and release the other client.

This section also includes:

  • A description of the duties and responsibilities the licensee will no longer have to the Released Client
  • A statement that the licensee may have confidential information about the Released Client, and that the licensee is prohibited from disclosing any of that information
  • A statement that the advice and information that the licensee may provide to the Continuing Client may be limited due to the licensee’s ongoing duty to maintain the confidentiality of the information of the Released Client, and
  • A recommendation that both clients seek independent professional advice.

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Section 2: The second section of the agreement begins on page 3. This section can be filled out by the licensee and the clients with information identifying:

  • the continuing and released clients,
  • the property, and
  • the nature of the conflict that the licensee is disclosing.

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Section 3: The third section of the agreement begins on page 5. This is the signature section, where, if all parties agree, the agreement form should be signed and dated.

This section also includes an advisory encouraging both clients to seek independent professional advice before signing the agreement, and a privacy notice.

Definitions of Terms in the Agreement

Agency: a type of relationship where the agent has the authority to represent and act for the consumer in dealing with others.

Continuing Client: client who, if the Agreement Regarding Conflict of Interest Between Clients is signed by both clients, will continue to be represented by the licensee in the transaction.

Client: the principal who has engaged the licensee to provide real estate services to or on behalf of the principal.

Conflict of interest: a situation where there is a substantial risk that the agent’s representation of a client would be negatively affected by the agent’s own interests or by the agent’s duties to another current client, a former client, or a third party.

Confidential Information: any information about a client that is not available to the public. That can include the client’s finances, personal situation, motivations or needs.

Dual Agency: the representation, in respect of a trade in real estate, by the brokerage of the following:

  • both the seller and the buyer as clients;
  • both the lessor and the lessee as clients;
  • both the assignor and the assignee as clients;
  • 2 or more buyers, lessees or assignees, as the case may be, as clients who have conflicting interests in respect of the trade in real estate.

Released Client: client who, if the Agreement Regarding Conflict of Interest Between Clients is signed by both clients, will no longer be represented by the licensee in the transaction.

Unrepresented Party: a party to the trade in real estate who is not a client of a licensee for the trade in real estate.

Using the Agreement

Step 1: Prepare the Agreement for Presentation to Each Client

Before presenting the form to a client, fill out the appropriate Name field on page 2. This will help to ensure that the client is fully informed about the services they can expect to receive if they sign the agreement form.

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On page 4 of the agreement, use the checkboxes to show the nature of the conflict (see item 1 under Agreement). This will help the client to understand what has led to the need for the agreement.

Do the same for the other client. Depending on the situation, you may use the same agreement form with both clients, or you may use separate forms in cases where clients may not wish for the other client to see their personal information (such as two competing buyers).

Step 2: Discuss the Form with Each Client

Take time to review the form with each of your clients and discuss any questions or concerns they may have. Explain any unfamiliar terms using the definitions included in this guide.

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Step 3: Invite Each Client to Sign the Agreement

If one of the clients chooses not to sign the agreement, you must stop acting for both clients and refer each client to other real estate professionals who will represent their interests in the transaction. In this situation, you cannot deal with either of the former clients as unrepresented parties in the transaction.

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If both clients sign the agreement, you should then refer the Released Client to another licensee who can represent the client in the transaction. Although you may deal with the Released Client as an unrepresented party if the Released Client chooses not to seek other representation, you should first carefully consider the risks of doing this.

Step 4: Submit the Agreement to Your Brokerage Promptly

You do not need to provide a copy of the Agreement Regarding Conflict of Interest Between Clients to the Council unless it is specifically requested.