Question:
Is a lawyer entitled to a real estate commission? In this case, the lawyer is also the Buyer.
I received an inquiry from a Lawyer, who also is the potential buyer, (he is not a registered Real Estate Sales Representative and, not a Brokerage).
He expects 1/2 of the commission to be made available to him for remission to the Vendor “ as a value added on the offer” and consequently, credit to him.
Answer:
Obviously, the lawyer fails to understand the exemption under REBBA. Yes, there’s no need to “register” under the Act, but to be entitled to receive commission from another registrant, he would have to be registered
So, that means “no commission” from you whatsoever, under any circumstances. However, he can charge himself a fee, if he wants to.
Your Listing provides a Commission of “2x” with “1x” being paid to the Co-operating Brokerage. If there was a Co-operating Brokerage, then, then they could indicate that they were prepared to waive “1x”. You could still charge the Seller “2x” and keep both sides.
The lawyer is a complete stranger to the deal. As a lawyer, you can’t provide him with anything, however, as a purchaser you are entitled to transfer money to him out of your commission. The reason is that he is a “party” to the deal. It’s not that he is a lawyer and exempt from registration. That point is irrelevant.
Brian Madigan LL.B., Broker
Comments 2
What or which authority or agreement entitles a law firm to receive a commission when the lawyer is primarily retained in acting for the seller in a real estate transaction, and the lawyer then refers a realtor to handle the listing, where the realtor is paid the full 5% on an MLS listing between the Realtor and the Seller? In other words, the Realtor is engaged under a Toronto MLS agreement and gets paid the 5% agreed as commission payable. The Law firm acting for the seller also receives a commission, over and above what has been paid to the Realtor, and even though the buyer is not the lawyer’s referral. Two commissions were paid and nothing about the 2nd commission to the lawyer was disclosed anywhere before or with the agreement of purchase and sale. The seller is quiet and moot and has not complained. The buyer on the other hand feels cheated because he paid more as that commission was part of the purchase price. Since the Seller was selling under power of sale, the mortgagor now complains that loss to him was increased because costs increased. What is your take in a situation like this of two listing commission fees without proper disclosures?
Author
You are entitles to have the lawyer’s account taxed (reviewed) by the Court.