LEGAL
Amesha Rama, In-house Lawyer, REINZ
Melisa Beight, General Counsel, REINZ
Licensees will be well aware of the pressure a multi-offer situation brings to the table. It occurs when there is more than one offer in writing. In a multi-offer situation, the vendor can choose the offer that works best for them, from a number of offers.
Multi-offer situations must be carefully managed to ensure that everyone involved is on the same page. It can be tricky because of the number of parties involved, in combination with the fast-paced, high pressure environment that is generally associated with multi-offers. It can be difficult for licensees to navigate their legal obligations in a multi-offer situation.
Issues with multi-offers Complaints from purchasers or prospective purchasers have highlighted the following issues: • Lack of clarity about how a multi-offer process is run • Lack of communication about how a multi-offer situation arises • Failure by the licensee to advise that there is another offer that may be acceptable to the vendor, and that there might, therefore, not be an opportunity to submit a higher offer • Disclosure of the details of other competing offers to a prospective purchaser, who then assumes that their own price and terms are being conveyed to other prospective purchasers (i.e. a confidentiality breach).
Real Estate Agents Act (Professional Conduct and Client Care) Rules 2021 (Code of Conduct Rules) The Code of Conduct Rules govern your conduct. Failure to comply with these Rules in a multi-offer situation could leave you with a finding of unsatisfactory conduct or misconduct. Where a property is in high demand, the chances are that more than one buyer will make an offer on the same property. Given the temperature of the real estate market, and the shortage of housing stock, it is highly likely that this will be the case. You must remember to ensure that you treat all parties fairly in a multi-offer situation and ensure that the process is transparent.
Rule 6.2 A licensee must act in good faith and deal fairly with all parties engaged in a transaction. You must ensure that you are not placing any undue or unfair pressure on either party.
Rule 9.2 A licensee must not engage in any conduct that would put a prospective client, client or customer under undue or unfair pressure. Continued over leaf
WINTER 2021
|
61
