The Dual Agency Disclosure at the Open House
Priya, a licensed Nova Scotia associate broker, lists a Halifax peninsula duplex at $689,000 for sellers Grant and Denise. At the first weekend open house, buyer Owen arrives unaccompanied and spends forty minutes touring. He tells Priya the upstairs rent could cover most of his mortgage and asks whether the sellers would take $650,000 with a sixty-day closing, adding that he is pre-approved and does not yet have his own agent. Priya says she can help him write an offer and that she represents the sellers. She does not mention that Owen could be represented by another brokerage at no cost to him, and she does not obtain any written acknowledgement. Owen asks her what the sellers' bottom line is. Priya replies that they are motivated and that $660,000 "should get it done." Owen signs a buyer agency agreement with Priya's brokerage the next morning, and she submits his $660,000 offer, which the sellers accept. Ten days later Owen learns the sellers had earlier rejected $675,000 from another party and that his own agent had that information.
1. Identify the agency and disclosure failures in this sequence and explain what Priya should have done at the open house and before accepting Owen as a client.
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The core failure is that Priya drifted into representing both sides without a proper dual agency framework. In Nova Scotia, a brokerage may act for both buyer and seller only with the informed written consent of both parties, and the brokerage must explain the limits of that role: the agent cannot give one client's confidential information to the other, cannot advocate exclusively for either side, and owes a duty of full disclosure of material facts to both.
At the open house, Priya was acting for the sellers. When Owen asked her to help him write an offer, she had three proper options: (1) continue as the sellers' agent and treat Owen as an unrepresented customer, giving him factual information but no advice or advocacy, and recommending he obtain independent representation; (2) refer him to another brokerage; or (3) obtain informed written consent from both Grant/Denise and Owen to a documented dual agency before doing any work for Owen.
She also breached the duty of confidentiality and loyalty by telling Owen the sellers were "motivated" and that $660,000 "should get it done." That is the sellers' negotiating position, and disclosing it while acting for them harmed her own clients. If she later became a dual agent, she still could not use information gained as the sellers' agent to disadvantage them.
Her answer to "what is their bottom line" should have been that she cannot discuss the sellers' position and that Owen should make his best offer based on his own analysis. Before signing any buyer agency agreement, she needed to confirm which relationship was intended, disclose the conflict in writing, and secure consent.
2. Owen discovers the earlier $675,000 rejection. What are his and the sellers' positions, and what should the broker's office do now?
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Owen has a strong complaint. He was led to believe Priya was looking after his interests, yet the brokerage held information - the $675,000 rejection - that was directly relevant to his pricing decision and did not disclose it. In a properly consented dual agency, the brokerage owes both clients fairness and full disclosure of material facts known to the brokerage. Concealing the prior rejection while presenting the offer as a good deal is a breach of that duty and potentially of the duty of honesty and good faith.
The sellers also have a grievance: Priya leaked their motivation and price expectations to a buyer before he was a client, which may have cost them money. Whether the sellers can claim damages depends on proving the disclosure caused a lower price, but the conduct itself is a professional standards issue.
Practically, the managing broker should: preserve the file and all communications; interview Priya and any assistants; review whether dual agency consent was ever validly obtained (it was not, on these facts); consider whether the transaction can be remedied by negotiation, such as a price adjustment or release; notify the brokerage's errors and omissions insurer; and report the matter internally. Priya faces potential discipline for failing to disclose the agency relationship, breaching confidentiality, and acting without informed consent. Owen should be advised to seek independent legal advice about his remedies, and the brokerage must not pressure him to waive complaints as a condition of any settlement.