What happens if the registered real estate professional is a relative of the buyer or the seller? Is this allowed?

By: Rita Garami

What happens if the registered real estate professional is a relative of the buyer or the seller? Is this allowed?

Tags: Real estate news, Real estate regulations, Homes for sale in Toronto area, Oakville Real Estate, MLS Listings

If real estate agent related to buyer or seller, full disclosure is critical

 

On occasion, a registered real estate professional may be related to the buyer or the seller of a home. The agent could also be the buyer or seller. This is acceptable so long as the real estate rep follows rules set out in the legislation that regulates the real estate brokerage industry.

The general rule is that if the real estate professional is related to the buyer or the seller of the property, he or she has to disclose the relationship in writing to all other parties to the purchase and sale agreement. This rule applies whether or not the other parties to the transaction are clients or customers of the real estate professional’s brokerage.

Similarly, if the real estate sales representative has some sort of an interest in the property, he or she has to disclose this relationship before an offer is made.

For example, if the representative is related to the seller, the rep has to disclose this to the buyer in writing.

Likewise, if the real estate professional is related to the buyer, the professional has to disclose this in writing to the seller.

Consumers and real estate professionals should note that the legislation governing real estate defines “related to” as including someone related by blood, adoption, through a conjugal relationship or even a business relationship.

Furthermore, if the real estate representative, or someone related to the professional, has an interest in the property being bought or sold, then they have to disclose this in writing to the buyer or seller.

An interest in a property could include the real estate professional owning the property in question.

An interest could also include the real estate professional having indirect ownership of the property because of another personal or business relationship.

In all cases, disclosure of the real estate professional’s interest in the property has to be made in writing at the earliest practical opportunity, and before any offer is made.

For you as the consumer, like with any else, feel free to ask your sales representative / broker if they have any personal relationship with the buyer or seller or a business interest in the property.

Source: thestar