Agent Sues in Small Claims Court for Commission

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RECO Discipline

The Seller of a property utilized the services of an agent to list and sell his property. That took place but ultimately the deal fell through and the Seller retained the $10,000 deposit.

The Seller listed with another Brokerage to sell the property.

The first agent showed the Seller another property and subsequently submitted an Offer on that property. However, it was sold to another buyer.

Another property came to the attention of the prospective Buyer. It was already listed and he received “customer service” from the Listing Brokerage.

The initial Brokerage issued a claim (“Claim”) in Small Claims Court.  They claimed that the Complainant (Seller, default, Buyer no deal on second property)had signed a Buyer Representation Agreement with respect to that second property on February 1, 2018, that was valid until July 1, 2018. The Claim referred to the unsuccessful offer, and then alleged that the Complainant purchased the third property on June 1, 2018,

The Brokerage claimed that it was owed commission of $22,882.50, including HST, under the terms of the BRA.

The Complainant defended the Claim, denying that he had signed the BRA with respect to the second property. On September 17, 2019, Brokerage A opted to withdraw the Claim.

The Agent failed to fulfill his obligations under the Code of Ethics:

  • when he failed to advise the Complainant of the steps he took after submitting the Offer on the second property, thereby contravening sections 3 and 23
  • failed to provide the client with copies of the Offer, and related trade documents, for the second property (offer), thereby contravening section 28(1)

Decision: August 30, 2022

Contrary to: 3                Honesty and Fairness

                   23               keep client advised

                   28(1)           provide copies of documents

                   39               Disgraceful, Dishonourable, Unprofessional

Fine:           $7,000.00 pay before 30 December 2022

Courses:      one RECO Course


If you are going to sue on a BRA:

  • You better get it signed
  • You better explain it
  • You have to give copies to the client
  • Have proof in your file that you gave a copy to the client
  • Prove that the client understood that it also extends to another property

Brian Madigan LL.B., Broker

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