Understanding agency relationships can be somewhat complicated when buying or selling a home in Toronto. Realtors are obligated by law to disclose the nature of the potential relationship to the prospective buyer or seller. As a potential buyer it would be prudent to be fully represented as a client when buying a home in Toronto. Full fiduciary duties are owed to the buyer when signing a buyer representation agreement with that specific brokerage. That's right, it's the brokerage and any and all of it's members that owe those responsibilities, even though you as a buyer only have a relationship with a specific sales representative. As a buyer, it's required that you t have a responsibility to only do business with that brokerage or any of it's members.
When selling a home in Toronto it's a little less complicated as a listing agreement between seller and brokerage addressees the relationship. In the event that no listing agreement is signed then again prior to an offer being presented by a Realtor the relationship must be dealt with through proper disclosure.
Then their is something called dual agency, in my opinion it's a true conflict of interest and the Realtor cannot perform his/her duties without causing some type of confusion. When will RECO and CREA recognize this has been a question that I have asked for years. Dual agency is simply when the listing Realtor has a signed a listing agreement and has also entered into a buyer representation agreement with a buyer that intends to buy the subject property. Now let me ask you this; in your opinion, does the seller or buyer have a true relationship with the Realtor? In more time than not it's the seller that has forged a business relationship and the Realtor would have some inside information about the property. It's the Realtor's responsibility to disclose all pertinent facts about the subject property.
Implied agency is another one that the public should be made aware of. This happens when a buyer or Realtor intiates and work with one another without entering into a buyer representation agreement in writing. This type of agency relationship happens more so these days as Realtors are just not explaining agency at the beginning of the relationship. Also in Ontario, REBBA 2002 states that all matters must be addressed in writing and not implied. So if an agent tries to sue a buyer for commission not paid due to an implied buyer relationship it would not more then likely be successful in court.
Please note that this article is a very general and NOT an in depth take regarding agency relationships, their are many other types not addreesed and please contact Vincent La Fiura to know more if required.