Humber/Ontario Real Estate Course 4 Exam Practice

Does Seller Cooper owe remuneration to ABC Realty if the property was re-listed with another brokerage and sold shortly after?

1. Yes, ABC Realty Inc. is owed 2.5% as the co-operating brokerage, given that the property was introduced during its listing period

2. No, because holdover provisions do not apply if the property is relisted with another brokerage

3. No, ABC Realty is not owed remuneration because the property was listed with another brokerage and the remuneration rate was higher than with ABC Realty Inc.

4. Yes, the holdover provision applies and ABC Realty Inc. is owed a remuneration rate of 5% because the property was introduced during the currency of that brokerage’s listing

5. Yes, ABC Realty is entitled to a rate negotiated with the new brokerage

6. Yes, provided that the property was introduced within the holdover provision period

The correct answer is: No, ABC Realty is not owed remuneration because the property was listed with another brokerage and the remuneration rate was higher than with ABC Realty Inc.

The assertion that the seller does not owe remuneration to ABC Realty is based on the understanding of how brokerages and commission agreements function during listing periods and subsequent re-listings. In real estate, when a property is under contract with a brokerage, any sales that occur during that contract term usually entitle the brokerage to a commission, regardless of whether the property is sold directly or through another agency, provided that the holdover provisions are enforceable. However, if the property is re-listed with another brokerage, a key factor is whether there was a binding contract with the previous brokerage, such as ABC Realty. Some commission agreements have holdover clauses, which allow the original brokerage to claim a commission for a certain time after the property is no longer under their listing, should it sell to a buyer they introduced. If relisting occurs and the conditions make it clear that ABC Realty's rights to remuneration do not extend in this scenario—especially when considering agreement termination or holdover clauses—this confirms that the seller does not owe remuneration to ABC Realty. In this case, the conclusion aligns with the understanding that the property being listed and sold by a different brokerage after the initial listing undermines ABC Realty's claim to remuneration, especially if it does not meet the criteria of