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Agency Rules as they apply to Real Estate in Ontario
- Creation of Agency Relationships
- By Ratification
- Agency is created by ratification if the principal accepts the benefits of an agent's previously unauthorized act. Ratification can occur when a salesperson approaches a 'For Sale by Owner' who does not want to sign an agency agreement but advises the salesperson to 'bring any clients over'. When the salesperson does introduce a buyer and secures a sale, the seller has accepted the benefits and liabilities of that sale and thereby becomes the principal. When the agent expects to create agency retroactively, the gent must act on behalf of the principal even before the agency relationship has been ratified.
- This is not the preferred way to establish the roles and responsibilities of a REALTOR®. It lacks clarity and is subject to ambiguity.
- By Express Agreement
- This is the most common way to create an agency relationship. An express agreement should set out the definite understanding of client and brokerage regarding the relationship.
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