Humber/Ontario Real Estate Course 2 Exam Practice

In a real estate context, what occurs when a brokerage represents multiple clients at the same time?

1. It can only happen if all clients are located in the same municipality

2. It involves cooperative sales exclusively

3. It is called dual agency

4. It is referred to as multiple representation

5. It mitigates conflict of interest

6. It reduces the brokerage’s liability

The correct answer is: It is referred to as multiple representation

When a brokerage represents multiple clients at the same time in a real estate context, it is referred to as multiple representation. This means that the brokerage is acting on behalf of more than one client in a single transaction. This practice is common in real estate, especially when multiple parties are involved in a deal, such as in situations with multiple buyers or sellers. The other options are not correct for the following reasons: - Option A: There is no requirement for all clients to be located in the same municipality for a brokerage to represent multiple clients. - Option B: Multiple representation does not exclusively involve cooperative sales; it can occur in various types of real estate transactions. - Option C: Dual agency is a specific situation where one real estate agent represents both the buyer and the seller in the same transaction, which is different from multiple representation. - Option E: Multiple representation does not necessarily mitigate conflict of interest, as conflicts can still arise when a brokerage represents multiple clients. - Option F: Multiple representation may actually increase the brokerage's liability as they have a duty to act in the best interests of multiple clients simultaneously, which can be challenging.