Commission Entitlement on Defaulted Deal in Ontario

Question:

We listed and sold a home for our Seller client in the March frenzy. The closing was June 1st , but the Buyer didn’t close . The Seller was going to sue Buyer but instead decided to settle for the deposit.

So, the Buyer got off with a mutual release, the Seller got the deposit and we as Listing agents got nothing. Actually we lost money (marketing) and time.

Answer:

Your commission was supposed to be part of the deal relating to the deposit, damages and the Mutual Release. 

Naturally, if you refused, your Seller would have taken a more aggressive stance, meaning that you would have been paid. 

However, there is another little problem and that is that some Schedule B’s of some Brokerages include the following: “The Seller will pay the commission to Agents only on successful completion of the sale transaction”. If that were in your deal, that would nullify your commission entitlement under your Listing or even the Buyer Representation Agreement for the Cooperating Brokerage.. 

You also appreciate that the correct place for that inclusion would have been the Confirmation of Cooperation and Representation (CCR)

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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