Humber/Ontario Real Estate Course 4 Exam Practice

Does Buyer Zhao owe remuneration to ABC Realty Inc. if Zhao buys a property from a FSBO within the holdover period after the agreement expires?

1. No, because Zhao purchased a different type of property.

2. No, because the property was not shown by the brokerage.

3. Yes, because the type and location criteria were met.

4. Yes, because the property was purchased within the holdover period.

5. Zhao does not owe remuneration under any circumstances.

6. The holdover clause does not apply to FSBO transactions.

The correct answer is: Yes, because the property was purchased within the holdover period.

The rationale behind why Zhao owes remuneration to ABC Realty Inc. lies in the concept of the holdover period. This period is intended to protect the interests of the brokerage after an agreement has expired. If a buyer purchases a property within this timeframe, and if the transaction is related to the original agreement made with the brokerage, remuneration is typically owed. In this scenario, Zhao purchasing a property from a For Sale By Owner (FSBO) during the holdover period indicates that there was an active relationship established with ABC Realty Inc. while the agreement was valid. Since the nature of the property and the circumstances of the transaction fall under the holdover provisions, Zhao is indeed obligated to pay remuneration to the brokerage in accordance with the terms previously agreed upon. The other options do not align with the principles behind the holdover period. For instance, purchasing a different type of property does not negate the obligation if a valid buyer-broker relationship exists. Likewise, whether the property was shown by the brokerage does not affect the established remuneration within the holdover timeframe. Ultimately, the key factor here is the timing of the purchase within the holdover period, which clearly supports the assertion that Zhao owes remuneration.