Is it a problem if my broker also works for industry buyers?

A broker who knows the buyers in your industry may be exactly who you want, and a broker with those relationships may also have interests of its own. Both can be true. The useful step is to find out what the relationships are and what the broker is doing about them.

The buyer network is part of the service

BDC describes business brokers and investment bankers as intermediaries with access to a broad network of qualified buyers whom they can discreetly approach on your behalf. A broker with industry buyers in its network may be one reason to hire it. That is different from a broker that is also acting for one of those buyers on your sale, which is a separate question to put to the broker directly.

What the Ontario Code requires if interests may conflict

Ontario’s Code of Ethics says a registrant must not provide, or continue to provide, services to a client where the registrant’s interests conflict or may conflict with the client’s, unless it has disclosed the transaction or relationship, advised the client to seek independent professional advice about that disclosure, taken all reasonable steps to ensure the client has demonstrated a reasonable understanding of the conflict, and obtained written consent. If the broker or its brokerage were to buy or sell an interest in real estate itself, which the Trust in Real Estate Services Act, 2002 defines to include businesses, the Act first requires a written notice to the other parties, with full disclosure of the facts it knows that affect value, and their written acknowledgment of receipt.

Your information and who sees it

The Code also says that, except as authorized or required by law, a registrant must not disclose a client’s confidential information to a third party without the client’s written consent. Ask when the broker would show your name and figures to any buyer, including its regular ones. Other provinces run their own regimes, so check who regulates your broker.

• Which industry buyers the broker currently works with, and in what role.
• Whether the broker is paid by any buyer.
• Whether the broker will tell you in writing before it introduces any such buyer.
• What your consent covers, and whether you can withdraw it.