Real Estate

Plan to end double-ended real estate deals helps consumer confidence

By Staff

The provincial government’s plan to put an end to a common practice among real estate agents known as double-ended deals is important for consumer confidence, says Toronto real estate lawyer Sarita Samaroo-Tsaktsiris.

A double-ended deal is when an agent represents both the buyer and the seller in a real estate transaction.

“I don’t believe it serves the best interests of the client by acting on both ends. Ultimately, a seller or a purchaser is not getting the representation that they normally would have if there were separate agents acting for each party,” Samaroo-Tsaktsiris tells

She says the government’s plan is long overdue.

According to a report in the Toronto Star, consumers have voiced concerns that double ending could lead to unethical conduct.

Samaroo-Tsaktsiris, principal with SST Law Professional Corporation, says she has heard such concerns raised in her own practice.

“The clients question whether the agent is acting in their best interest. Often they will approach real estate lawyers to have a contract reviewed. There can be a lack of trust,” she says.

This is particularly true in larger transactions when clients believe salespeople have more to gain by acting for both the buyer and seller, Samaroo-Tsaktsiris says.

“They want to ensure the real estate agent is being fair and has inserted all the proper clauses to protect them as purchasers.”

She says sellers want assurances that they’ve received the best price and the deal has been negotiated properly, and buyers want the confidence that they’ve been given all the information about the property.

“For example, has the agent told them about all of their options, such as having an independent home inspection or revealed there's a work order issue with the property? Agents might not make all of the suggestions they would if they were just acting for one party.”

Samaroo-Tsaktsiris says sometimes there are "exclusive listings," when the salesperson markets the home on the seller's behalf without posting it on the Multiple Listings Service (MLS). All prospective buyers are referred directly through the representative or their brokerage and the listings can only be viewed by agents and brokers within the same brokerage as the selling agent and these listings generally attract buyers through direct referral.

“If the property isn't selling, the agent can remove the exclusive listing and co-operate with other agents on MLS.”

However, Samaroo-Tsaktsiris says occasionally such exclusivity or having an agent act for both buyer and seller works for both parties.
“If the agent or brokerage is cautious and looks after the best interest of both clients, it can work out and it can be an amicable transaction.”
But it’s more likely that suspicions will linger, she says. “Their clients may not feel 100 per cent comfortable.”
If consumers feel they have been treated unfairly in a transaction, it could lead to a legal action, Samaroo-Tsaktsiris says.
“Since the real estate market has cooled down somewhat, you will see many more lawsuits and people questioning the decisions they’ve made at the time the market was red hot. This is when you’ll probably see agents trying to defend themselves after double-ending a deal.”
Samaroo-Tsaktsiris says lawyers must adhere to stringent professional conduct under the Law Society of Upper Canada’s Rules of Professional Conduct.
“We have very strict rules to ensure we are not acting for both the buyer and seller.
It’s interesting that this rule hasn’t already been applied to real estate agents. There is an exception wherein we can act for relatives transferring properties to each other.
But the law society cautions against that,” she says.
Samaroo-Tsaktsiris believes that some salespeople will suffer under the proposed plan as it is a highly competitive field.
“There are a great number of agents out there so it is difficult for them to attain clients. They may not do as much volume per month in terms of deals. That is the one disadvantage to this proposed legislation for real estate agents who may not be as busy as when they were able to double end a deal.”

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