Suppose a salesperson is designated to represent a buyer, and that buyer subsequently expresses interest in a property listed by another salesperson from the same brokerage. The salesperson representing the seller was also designated to represent that seller. What is the brokerage's primary obligation in this instance?

Question: Suppose a salesperson is designated to represent a buyer, and that buyer subsequently expresses interest in a property listed by another salesperson from the same brokerage. The salesperson representing the seller was also designated to represent that seller. What is the brokerage's primary obligation in this instance?

Answer options:

• To terminate the relationship with one of the clients due to the inherent conflict of interest. ✅ To ensure both clients are fully informed of the brokerage's multiple representation and provide written consent.
• To facilitate the transaction without disclosure, as designated representation negates multiple representation concerns.
• To advise both clients to seek independent legal counsel before proceeding with negotiations.

Correct answer: To ensure both clients are fully informed of the brokerage's multiple representation and provide written consent.

Explanation: Under REBBA 2002, even with designated representation, if two designated representatives from the same brokerage represent different parties in the same transaction, the brokerage is in a multiple representation scenario. The brokerage must disclose this to both clients and obtain their informed written consent as per O. Reg. 580/05, s. 16(1).