Humber/Ontario Real Estate Course 4 Exam Practice

Which of the following is true for both seller representation and buyer representation agreements?

1. Both include a holdover clause.

2. Both reference the Consumer Protection Act.

3. The seller agreement contains detailed procedures for multiple representation, while the buyer agreement does not.

4. Both mandate the buyer’s responsibility for remuneration.

The correct answer is: Both include a holdover clause.

The correct answer is that both seller representation and buyer representation agreements typically include a holdover clause. A holdover clause is a provision that allows the brokerage to receive a fee if a buyer or seller transacts with a client after the agreement has expired, provided that the relationship was established during the period of active representation. This clause serves to protect the broker’s interests and ensures they are compensated for their efforts if a transaction results despite the agreement no longer being in effect. The inclusion of this clause in both types of agreements underlines the importance of recognizing the broker's role and effort in initiating a relationship between the buyer and seller, as well as maintaining a level of accountability even after the official representation period has ended. It reinforces a sense of both parties’ commitment to the agreed terms and the professional services provided. The other options do not accurately reflect attributes of both agreements. For instance, while both agreements need to adhere to the Consumer Protection Act, the specifics of how that applies in practice can differ between buyer and seller agreements in terms of representation style and obligations. Additionally, while multiple representation procedures may be discussed in seller agreements, buyer agreements can also encompass these considerations depending on the situation. Lastly, remuneration responsibilities typically differ between buyers and sellers, as the obligation