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Real estate in Ontario recognizes the difference between clients and customers.  In fact, when you go to make an offer, you have to choose how you want to be represented.  Here is a great article that explains the differences between both:

This post was written by Sue Gargiulo who has written 157 posts on Ontario Real Estate Association Blog

 it’s incumbent for registrants to understand the difference between clients and customers, and the duties of care a brokerage and its representatives owe to each. The key to remembering the difference is the representation agreement.

Duty of care is defined as the duty owed to clients and customers established by objective standard. The level of obligation is different.

The duty of care to a client involves everything done (or that ought to be done) by the agent (i.e., brokerage) for the client. A relationship is established via a representation agreement. As such, the brokerage owes the client fiduciary obligations under agency/common law, and regulatory obligations, as set out in the Real Estate and Business Brokers Act, 2002, and associated Regulations.

The duty of care to a customer is more limited because there is no representation agreement. However, a customer may enter into a service agreement with the brokerage. The duties owed to customers include honesty, providing accurate information and responding to questions, and performing functions to which the brokerage has agreed.

Note that two duties are owed to both clients and customers:

• exercise care and skill
• ensure honesty

Registrants must have the requisite knowledge and skills, provide complete and accurate information, recommend relevant experts, where applicable, and demonstrate honesty of intent in all dealing.

General Obligations Owed to Clients

1.  Exercise care and skill: have the requisite knowledge and skills; provide complete and accurate information; recommend relevant experts, where applicable

2.  Negotiate favourable terms: advance the client’s interests by assisting in negotiations; draft favourable terms and conditions for agreements arising from the negotiations

3.  Maintain confidentiality: maintain confidentiality regarding all matters (e.g., client’s personal information, client’s motivation for buying/selling, the amount to be paid or accepted during negotiations)

4.  Disclose information: disclose information pertinent to the client (e.g., actual or potential conflicts of interest); disclose matters relating to the transaction

5.  Ensure honesty: demonstrate honesty of intent in all dealing

6.  Act in person: perform duties personally, unless otherwise instructed

7.  Obey instructions: obey the client’s instruction, unless it’s not lawful (e.g., the client asks you to create a misleading advertisement regarding the property)

8.  Perform mandate: perform the mandate as set out in the representation agreement; act only within specified authorities; seek clarification if you are uncertain about said authorities

Fiduciary Obligations Owed to Clients

1.  Maintain utmost loyalty: the client’s interests come first, best achieved in single representation (i.e., you represent the interest of only one party to a transaction)

2.  Avoid conflicts of interest: be aware of situations that may lead to conflicts of interest, such as:

• representing two or more clients at the same time (multiple representation)
• acquiring the client’s property
• selling your own property to the client

3.  Disclose conflicts: disclose any personal or third-party interests that do or might conflict with the client’s interests; disclose the exact nature and extent of the conflict(s), in writing and signed by the client

4.  Not make secret profit: do not make a profit at the client’s expense (e.g., providing improper advice, accepting payment from another party without the client’s knowledge and written consent)

5.  Not misuse confidential information: do not use confidential information (e.g., confidential details about the client, the property, and/or the transaction) for your own interests, to harm the client, or to interfere with the client’s endeavours

For More Information

Watch the RECO video on http://www.youtube.com/watch?v=O44ZRh_ezeY&feature=youtu.be.