On March 28th, the Law Society of Upper Canada passed an amendment to their Rules of Professional Conduct that will have an impact on most real estate transactions.
Unlike REALTORS®, lawyers are no longer able to act on behalf of both parties ie: Buyer and Seller in the transfer of title for real property. Two separate lawyers will be required to represent the parties to a given transaction. It is permissable for two lawyers from the same firm to act on behalf of the parties as long as the general rules pertaining to a conflict of interest are followed. After numerous consultations with members of the bar and real estate practitioners, it was felt that in order to minimize any chances of conflict of interest, this amendment should be adopted. In specific circumstances one lawyer can act on behalf of two parties ie: when the Buyer and Seller are one in the same or where property is being transferred from one spouse to another etc.
This recent change by the Law Society begs the question, how long will it be before similar legislation is brought forth with respect to the activities of REALTORS®? Real estate agents face the same potential for a conflict of interest when selling one of their own listings, representing both the Buyer and the Seller. It is an absolute necessity that all parties are aware of, understand and consent to in writing this form of agency relationship in a real estate transaction. I suspect the day will come when as is now the case within the legal profession, two REALTORS® will be required to handle a given transaction and there will be no more of what is affectionately known as "double-ending."
Being a customer or a client are NOT one in the same. If you have any questions with respect to whom is working for whom in a real estate transaction please do not hesitate to contact the writer.
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