The End of Double-Ending
“Double-ending” refers to a situation where a single real estate broker represents both the Seller and the Buyer in a residential real estate transaction. It’s a practice that has long raised concerns about the broker’s ability to act in the best interests of both sets of clients.
Changes to the Quebec Real Estate Brokerage Act will effectively put an end to the practice of double-ending in order to avoid potential conflicts of interest. As of June 2022, real estate brokers will have to represent either the Buyer or the Seller in a particular transaction – not both. The goal of this Amendment is to further protect Buyers and Sellers and to promote trust in the client/broker relationship.
The Brokerage Contract to Purchase
The Amendment to the Real Estate Brokerage Act introduces another change to the way real estate is conducted in Quebec with the Brokerage Contract to Purchase. Brokers are now required to have a signed Brokerage Contract when representing Buyers. It’s long been standard practice to have a signed contract with Sellers, but contracts with Buyers have been less common.
In the past, brokers signed contracts with Sellers to represent them in the sale of their property. But for the most part, agreements with Buyers were verbal, with exceptions in cases like For Sale By Owner (FSBO) transactions. More brokers have been implementing signed Brokerage Contracts with Buyers in recent years, but it hasn’t been the norm. Going forward, Buyers will be required to sign a Brokerage Contract to Purchase (BCP) with their chosen broker before writing a Promise to Purchase on a home.
(There is a way for the Buyer to buy a home without signing a Brokerage Contract to Purchase, but they would have to waive their right to be legally represented and they would lose any protection afforded by the contract. We will explain this in more detail in a future post.)
Benefit for Clients
The Amendment to the Real Estate Act will reduce potential conflicts of interest and protect clients’ best interests. It will also help increase trust in the broker-client relationship, which is a good thing.
Reputable brokers have always done their best to represent their clients’ interests, even when double-ending. At Groupe Ellerbeck, we’ve already been doing this with our clients. One of us will represent the Seller while the other acts on behalf of the Buyer, both working our hardest to make sure our assigned clients get their best possible outcome. There have even been situations where we’ve brought in another experienced broker from our office, to ensure the highest level of fairness. We’ll continue to ensure that each client’s interests are represented in the best way possible, just as we always have.
We’ll go into more detail about the specifics of the Brokerage Contract to Purchase in an upcoming post, but if you have any questions about the new regulations and how they might affect you, we’d be happy to answer them for you.
Source: OACIQ
