Humber/Ontario Real Estate Course 2 Exam Practice

If a brokerage represents both the seller and the buyer in a transaction and both clients have signed representation agreements, how is the brokerage entitled to remuneration?

1. The brokerage can receive remuneration from both parties if only one client is informed.

2. The brokerage can receive remuneration from both parties if both clients are informed verbally.

3. The brokerage can only collect remuneration from one party to the transaction.

4. The brokerage can receive remuneration from both parties if fully disclosed in writing to both clients.

5. The brokerage should return one fee to the buyer.

6. The brokerage can decide independently how to manage remuneration without client knowledge.

The correct answer is: The brokerage can receive remuneration from both parties if fully disclosed in writing to both clients.

When a brokerage represents both the seller and the buyer in a transaction and both clients have signed representation agreements, the brokerage is entitled to remuneration if it is fully disclosed in writing to both clients. This disclosure is essential to ensure transparency and to avoid any potential conflicts of interest. By informing both parties in writing, the brokerage is being upfront about receiving compensation from both sides and obtaining consent from all parties involved. Options A, B, C, E, and F are incorrect because they do not emphasize the importance of full disclosure in writing to both clients. Verbal communication may not provide sufficient evidence of informed consent, and only collecting remuneration from one party could present a conflict of interest. Returning one fee to the buyer or managing remuneration independently without client knowledge could also raise ethical concerns and may not align with the regulations in place to protect clients in real estate transactions.