Humber/Ontario Real Estate Course 4 Exam Practice

Which brokerage is not entitled to any remuneration when a transaction closes during a holdover period?

1. Brokerage A is not entitled to remuneration because Brokerage B has a valid holdover provision.

2. Brokerage B is not entitled to any remuneration because Brokerage A's holdover period is still active.

3. Brokerage A must receive remuneration while Brokerage B cannot claim any fees.

4. Brokerage B must forfeit remuneration to Brokerage A due to the active holdover period.

The correct answer is: Brokerage B is not entitled to any remuneration because Brokerage A's holdover period is still active.

The correct answer states that Brokerage B is not entitled to any remuneration because Brokerage A's holdover period is still active. This is based on the principle of holdover periods in real estate transactions, which typically protect the rights of a brokerage that has previously worked with a client. When a client enters into an agreement with a brokerage and that agreement includes a holdover period, it allows the brokerage to receive remuneration for transactions that occur within that period, even if the formal agreement has ended. In this context, if Brokerage A's holdover period is still in effect, it means that any transaction that occurs during this time would be subject to the terms of that agreement. Brokerage B, despite being involved in the transaction, would not have a claim to remuneration for transactions that fall within the timeframe protected by Brokerage A's holdover provision. This highlights the importance of understanding holdover clauses and their implications for commission rights within real estate brokerages.