Humber/Ontario Real Estate Course 2 Exam Practice

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What happens if a conflict of interest arises in multiple representation?

  1. All real estate activities must halt for 30 days

  2. Brokerage cannot continue representing both parties

  3. Brokerage determines the most ethical solution

  4. One agent must cease representation immediately

  5. Listing agreement is voided permanently

  6. Transaction must proceed as per initial terms

The correct answer is: Brokerage cannot continue representing both parties

In cases where a conflict of interest arises in multiple representation, the correct course of action is for the brokerage to cease representing both parties. This is because when a conflict of interest exists, it becomes challenging for the brokerage to provide impartial and unbiased representation to both parties. Therefore, the most ethical and appropriate solution is for the brokerage to step back from representing either party involved in the transaction. Options A, C, D, E, and F are incorrect: A. All real estate activities must halt for 30 days - There is no requirement for all real estate activities to cease for a specified period when a conflict of interest arises in multiple representation. C. Brokerage determines the most ethical solution - While the brokerage should indeed determine the most ethical solution, in the case of a conflict of interest in multiple representation, the appropriate action is for the brokerage to stop representing both parties. D. One agent must cease representation immediately - It is not just one agent who should cease representation in cases of conflict of interest in multiple representation, but rather the entire brokerage. E. Listing agreement is voided permanently - The listing agreement being voided permanently is not the typical outcome when a conflict of interest arises in multiple representation. F. Transaction must proceed as per initial terms - When a conflict of interest emerges in multiple representation, it is crucial to address the conflict first by ceasing representation, rather than proceeding with the transaction as per the initial terms.

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