A registrant in Ontario discovers their buyer client is related to the seller after an offer is accepted. The family relationship was unknown when the representation agreement was signed. What action is required?

Q: What is the correct answer to: A registrant in Ontario discovers their buyer client is related to the seller after an offer is accepted. The family relationship was unknown when the representation agreement was signed. What action is required?

The correct answer is Disclose the relationship and obtain written consent to continue. Option C correctly follows TRESA requirements for conflict of interest management. Under section 21 of TRESA and RECO's Code of Ethics, registrants must immediately disclose any conflict of interest to all affected parties and obtain written informed consent before continuing representation. This ensures transparency while allowing the transaction to proceed if all parties agree with full knowledge of the circumstances. The disclosure and consent process protects all parties' interests and maintains the registrant's professional obligations.

Q: What background knowledge is needed for this Agency & Professional Ethics question?

Under TRESA and RECO regulations, registrants owe fiduciary duties including loyalty, disclosure, and acting in clients' best interests. Conflicts of interest arise when circumstances could impair a registrant's ability to represent clients objectively. Common conflicts include personal relationships, financial interests, or multiple representation scenarios. The law requires immediate disclosure of any conflict and obtaining written informed consent to continue. This process ensures clients can make informed decisions about their representation while maintaining transparency and professional standards.

Q: What is a good way to remember the answer to this Agency & Professional Ethics question?

Remember 'DCC' - Discover, Disclose, Consent. When you Discover a conflict, immediately Disclose it to all parties, then obtain written Consent to continue. Think of it like finding a crack in a foundation - you must tell everyone about it before deciding whether to proceed with the construction project. When you see conflict of interest questions, immediately think 'DCC.' Look for the option that involves disclosure and obtaining consent rather than hiding the conflict or automatically terminating. The law favors transparency with client choice over automatic termination.

Q: What exam tip applies to this Agency & Professional Ethics question?

For conflict questions, always choose disclosure plus written consent over continuing without disclosure or automatic termination. TRESA emphasizes informed client choice through transparency.

Q: How does this Agency & Professional Ethics concept apply in real world practice?

A buyer's agent discovers after offer acceptance that their client is the seller's nephew. Rather than panicking or hiding this information, the agent immediately calls both parties to disclose the family relationship. They explain how this might affect the transaction and ask if both parties consent to continue in writing. The uncle-seller appreciates the transparency and both parties agree to proceed, knowing the agent will maintain professional boundaries despite the family connection.

Question

Agency & Professional EthicsConflicts_of_interestONHARD

A registrant in Ontario discovers their buyer client is related to the seller after an offer is accepted. The family relationship was unknown when the representation agreement was signed. What action is required?

Answer Options

A

Continue with the transaction as planned

B

Immediately terminate all representation agreements

C

Disclose the relationship and obtain written consent to continue

D

Report the situation to RECO and withdraw