Listing Agreement: Detailed Analysis by Brian Madigan

Brokerage Listing: Introduction

Let’s have a look at the OREA standard form Listing Agreement and see what it says. This is Form 200 for Brokerage Representation. Essentially, this is very similar to the Form that preceded the TRESA legislation.

First, I will set out the clause verbatim. Then, I will review the wording in detail. Finally, I will offer some comments on the Paragraph under review.

Listing Agreement

Seller Representation Agreement

Authority to Offer for Sale

This is a Multiple Listing Service® Agreement OR Exclusive Listing Agreement

(Seller’s Initials) (Seller’s Initials)

BETWEEN: BROKERAGE: …………………………………………………………………………………………………………………………………………………………………(the “Listing Brokerage”) Tel. No. ………………………

SELLER: ………………………………………………………………………………………………….(the “Seller”) In consideration of the Listing Brokerage listing the real property for sale known as………………………………………………………………………………………. ……………………………………………………………………………………………(the “Property”)”

COMMENT

That was the introduction to the Listing Agreement. It sets out the names of the parties, and the Seller initials selecting either an MLS or Exclusive Listing.

All contracts are with the Brokerage directly.

The Seller also identifies the property.

The real estate agent should take steps at this point to confirm that the description is correct, complete and accurate. This would involve checking the Parcel Register in GeoWarehouse. In addition, the description can also be checked under MPAC.

For the protection of the Seller at the outset, they should check the registration status of the Brokerage and any real estate agent with whom they may be dealing on the RECO website.

Brokerage Listing: Definitions

This is the Definitions paragraph:

“1. DEFINITIONS AND INTERPRETATIONS: For the purposes of this Agreement (“Authority” or “Agreement”): “Seller” includes vendor, a “buyer” includes a purchaser, or a prospective purchaser. “Self-represented assistance” shall mean assistance provided to a self-represented party. A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised. For purposes of this Agreement, anyone introduced to or shown the Property shall be deemed to include any spouse, heirs, executors, administrators, successors, assigns, related corporations and affiliated corporations. Related corporations or affiliated corporations shall include any corporation where one half or a majority of the shareholders, directors or officers of the related or affiliated corporation are the same person(s) as the shareholders, directors, or officers of the corporation introduced to or shown the Property. Commission shall be deemed to include other remuneration. This Agreement shall be read with all changes of gender or number required by the context. A “real estate board” includes a real estate association. “Public Marketing” shall have the same meaning as set out in REALTOR® Cooperation Policy as published by the Canadian Real Estate Association.”

Review

Set out below and marked in bold and italics are those words that are defined. Let’s look at that paragraph in a little more detail:

DEFINITIONS AND INTERPRETATIONS:

For the purposes of this Agreement (“Authority” or “Agreement”):

“Seller” includes vendor,

a “buyer” includes a purchaser, or a prospective purchaser.

“Self-represented assistance” shall mean assistance provided to a self-represented party.

A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised.

For purposes of this Agreement, anyone introduced to or shown the Property shall be deemed to include

any spouse,

heirs,

executors,

administrators,

successors,

assigns,

related corporations and

affiliated corporations.

Related corporations or affiliated corporations shall include

any corporation where one half or a majority of the shareholders, directors or officers of the related or affiliated corporation

are the same person(s)

as the shareholders, directors, or officers of the corporation introduced to or shown the Property.

Commission shall be deemed to include other remuneration.

This Agreement shall be read with all changes of gender or number required by the context.

A “real estate board” includes a real estate association.

“Public Marketing” shall have the same meaning as set out in REALTOR® Cooperation Policy as published by the Canadian Real Estate Association.

COMMENT

That was the list of definitions. Other than “spouse”, the definition does not appear to extend to other family members. This means that parents and children are not included. If that is the case, then, they will have to sign the documents for themselves.

Frequently, agents will often overlook this point and simply have the person in the family who is the main contact and the most vocal sign the paperwork.

Also, any kind of remuneration is referenced as a “commission”. So, attendances at hourly rates and any profits made for staging etc. would be included. However, this would appear not to extend to reimbursement of expenses.

Brokerage Listing: Commission

This is the Commission paragraph:

“2. COMMISSION: In consideration of the Listing Brokerage listing the Property, the Seller agrees to pay the Listing Brokerage a commission of ……………% of the sale price of the Property or ………………………………………………………………………………………………………………………. for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period, as may be acceptable to the Seller. The Seller authorizes the Listing Brokerage to co-operate with any other registered real estate brokerage (co-operating brokerage) and to offer to pay the co-operating brokerage a commission of…………….% of the sale price of the Property or…………………………………………………………………………. out of the commission the Seller pays the Listing Brokerage. The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the Seller’s behalf within ……………………….. days after the expiration of the Listing Period (Holdover Period), so long as such agreement is with anyone who was introduced to the Property from any source whatsoever during the Listing Period or shown the Property during the Listing Period. If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement. The Seller further agrees to pay such commission as calculated above even if the transaction contemplated by an agreement to purchase agreed to or accepted by the Seller or anyone on the Seller’s behalf is not completed, if such non-completion is owing or attributable to the Seller’s default or neglect, said commission to be payable on the date set for completion of the purchase of the Property. Any deposit in respect of any agreement where the transaction has been completed shall first be applied to reduce the commission payable. Should such amounts paid to the Listing Brokerage from the deposit or by the Seller’s solicitor not be sufficient, the Seller shall be liable to pay to the Listing Brokerage on demand, any deficiency in commission and taxes owing on such commission. All amounts set out as commission are to be paid plus applicable taxes on such commission.”

Review

Set out below and marked in bold and italics are those words that are inserted by me to assist in the review. They are not set out in the clause itself. Let’s look at that paragraph in a little more detail:

2. COMMISSION:

Commission Payable

In consideration of the Listing Brokerage listing the Property,

the Seller agrees to pay the Listing Brokerage

Amount

a commission of ……………% of the sale price of the Property or …………………………………………………………………………………………………………………

Trigger for Liability

for any valid offer to purchase the Property

from any source whatsoever obtained during the Listing Period,

as may be acceptable to the Seller.

Cooperating Brokerage Commission

The Seller authorizes the Listing Brokerage to co-operate

with any other registered real estate brokerage (co-operating brokerage) and

to offer to pay the co-operating brokerage

Amount

a commission of…………….% of the sale price of the Property or………………………………………………………………………….

Source

out of the commission the Seller pays the Listing Brokerage.

Holdover Commission

The Seller further agrees to pay such commission as calculated above

if an agreement to purchase is agreed to or accepted by the Seller

or anyone on the Seller’s behalf

Time Period

within ……………………….. days after the expiration of the Listing Period (Holdover Period),

Liability: Introduction

so long as such agreement is with anyone who was introduced to the Property

from any source whatsoever during the Listing Period

or shown the Property during the Listing Period.

Reduction in Amount Payable

If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing

to pay commission to another registered real estate brokerage,

the Seller’s liability for commission shall be reduced

by the amount paid by the Seller under the new agreement.

Non-completion Liability: Seller’s Default

The Seller further agrees to pay such commission as calculated above

even if the transaction contemplated by an agreement to purchase agreed to

or accepted by the Seller

or anyone on the Seller’s behalf is not completed,

if such non-completion is owing or attributable to the Seller’s default or neglect,

Date Due for Both Completion and Non-completion

said commission to be payable on the date set for completion of the purchase of the Property.

Deposit Application to Commission

Any deposit in respect of any agreement where the transaction has been completed shall first be applied to reduce the commission payable.

Should such amounts paid to the Listing Brokerage from the deposit or by the Seller’s solicitor not be sufficient,

the Seller shall be liable to pay to the Listing Brokerage on demand,

Commission Deficiency

any deficiency in commission and taxes owing on such commission.

Taxes in Addition

All amounts set out as commission are to be paid plus applicable taxes on such commission.”

COMMENT

The trigger for payment used to be a valid Offer. Now, it’s a valid Offer “as may be acceptable to the Seller”. This change was due to the fact that many Listings were substantially underpriced and a full price Offer would generate liability for the commission. But, both the Listing agent and the Seller knew that they were just simply trying to induce some interest in the property. Now, the Offer must be acceptable to the Seller.

There is one commission, for example 5% to be paid to the Listing Brokerage, not the Listing agent, but the Listing Brokerage. Out of that, a cooperating commission may be paid to the Buyer’s Brokerage. Let’s assume that is 2.5%. Disclosure of this amount is required in accordance with the fiduciary duty of accounting.

There is also a holdover provision. This might be for 90 days. So there is a contract which is composed of two time periods:

90 days – Listing period
90 days – Holdover period
180 days – contract period

This provision is an attempt to avoid the “end run”. The property is placed on the market and a prospective buyer attends an open house and is interested in the property. Rather than submit an Offer, they contact the Seller directly and determine to submit their Offer following expiry of the Listing. That will save the Seller 5% in commission! However, for an additional 90 days following the Listing period, the holdover clause will apply and prevent this. The full commission will still be payable. They can still engage in the end run, they just have to wait 181 days.

There’s also one more purpose and that is to avoid the low end Brokerage which charges nothing from scooping the deal.

The first Brokerage charges 5% and does all the marketing and staging of the property. Then, we have a potential purchaser. However, we slide over the 90 day listing period and the Seller elects to engage a low end no service Brokerage. They will do the deal at 3%, effectively saving the Seller 2%. The holdover clause would obligate the Seller to pay the additional 2% top up commission to the first Listing Brokerage, provided that the actual purchaser was introduced to the property during the Listing period.

In both these situations, the Listing Brokerage would have evidence, however there is one more interesting scenario. The next-door neighbour sees the sign on the lawn or a passerby sees the sign on the lawn and they approach the Seller during the Listing period. Rather than refer them to the Listing agent, the Seller chooses to conceal this information and wait until expiry of the Listing period. The Seller has an obligation to refer this contact to the Listing agent and will be responsible for full payment of the commission during the holdover period should this purchaser acquire the property. Again, they could wait 181 days, but they usually proceed quickly after expiry.

There is no actual amount of time for the holdover period. It could be 0 or it could be 365 days.

The commission is payable in full should the Seller default.

It would be reasonable to include a provision to the effect that the commission would also be payable should the Buyer default. That would enable the Listing Brokerage to send an Invoice to the Seller and the Seller could add this claim to their lawsuit, should they be pursuing their legal remedies. However, you will notice that that provision was simply omitted. The failure to include such a provision could be interpreted to suggest that there is no entitlement to commission should the transaction not close.

However, that’s just one interpretation. The opposing argument is that the trigger for the commission is the “acceptable Offer” and not completion of the transaction. The completion date is simply the date that it is due.

The deposit is to be used for payment, and if there is a deficiency, then the Seller is to make that up. HST is in addition to the commission.

Brokerage Listing: Representation

This is the Representation paragraph:

“3. REPRESENTATION: The Seller acknowledges that the Listing Brokerage has provided the Seller with written information explaining relationships, including information on Seller Representation, Sub-agency, Buyer Representation, Multiple Representation and Self-Represented Party assistance. The Seller understands that unless the Seller is otherwise informed, the co-operating brokerage is representing the interests of the buyer in the transaction. The Seller further acknowledges that the Listing Brokerage may be listing other properties that may be similar to the Seller’s Property and the Seller hereby consents to the Listing Brokerage listing other properties that may be similar to the Seller’s Property without any claim by the Seller of conflict of interest. The Seller hereby appoints the Listing Brokerage as the Seller’s agent for the purpose of giving and receiving notices pursuant to any offer or agreement to purchase the Property. Unless otherwise agreed in writing between Seller and Listing Brokerage, any commission payable to any other brokerage shall be paid out of the commission the Seller pays the Listing Brokerage, said commission to be disbursed in accordance with the Commission Trust Agreement.”

Review

3. REPRESENTATION:

Acknowledgement

The Seller acknowledges that the Listing Brokerage has provided the Seller

Relationship Explanations in Writing

with written information explaining relationships, including information on

Seller Representation,
Sub-agency,
Buyer Representation,
Multiple Representation and
Self-Represented Party assistance.

Cooperating Brokerage is acting for Buyer

The Seller understands that unless the Seller is otherwise informed,

the co-operating brokerage is representing the interests of the buyer in the transaction.

Similar Properties: No Conflict

The Seller further acknowledges that the Listing Brokerage may be listing other properties that may be similar to the Seller’s Property and

the Seller hereby consents to the Listing Brokerage listing other properties that may be similar to the Seller’s Property

without any claim by the Seller of conflict of interest.

Appointment: Give and Receive Notices

The Seller hereby appoints the Listing Brokerage as the Seller’s agent for the purpose of giving and receiving notices

pursuant to any offer or agreement to purchase the Property.

Cooperating Commission Comes out of Total Commission

Unless otherwise agreed in writing between Seller and Listing Brokerage,

any commission payable to any other brokerage shall be paid out of the commission the Seller pays the Listing Brokerage,

said commission to be disbursed in accordance with the Commission Trust Agreement.

COMMENT

So, where’s the “written information about representation agreements? The RECO Information Guide covers the following: Seller Representation, Buyer Representation, Multiple Representation and Self-Represented Party assistance. However, it didn’t cover Sub-agency. That’s not there!

So, you are going to have to find that somewhere else. At one time, it was covered in the “Working with a Realtor” (WWR) document, but it was dropped out of the more recent versions. Besides, OREA has now eliminated the WWR document in its entirety.

Let me explain sub-agency. Let’s assume that the Seller lists his property with ABC Brokerage and that brokerage requires the assistance of another brokerage to handle some part of the transaction. The first Brokerage could retain XYZ Brokerage to provide that assistance. Since there is no direct relationship between XYZ and the Seller, XYZ is the sub-agent of ABC, however, it still owes its fiduciary duties to the Seller.

A further example may be a situation wherein the Listing Brokerage offers a commission. XYZ has a potential buyer who has not signed a Buyer Representation Agreement (BRA). And, going forward, they won’t because they are a very sophisticated purchaser. XYZ approaches ABC and receives the sub-agency appointment. Going forward both ABC and XYZ represent the Seller. The Buyer is on his own in this deal.

If the Buyer says something to XYZ, then this information is passed along to ABC and ultimately the Seller. Both Brokerages are acting for the Seller, and none one is acting for the Buyer.

In the ‘60’s, ‘70’s, and ‘80’s, that was how it worked. It was at that time, that the industry switched over to Buyer Representation. That presented a problem for some larger Brokerages which now had a potential conflict acting on both sides of a transaction. So, “Customer Service” a lower service level without fiduciary duties was introduced. That service model was eliminated with the TRESA changes.

That still leaves us with the Sub-agency arrangements. This takes place most frequently in commercial transactions.

Sub-agency should not be confused with co-listing arrangements. In this model, The Sellers directly retains ABC and XYZ. In sub-agency, it is ABC which retains XYZ on behalf of the Seller.

The difficulty going forward is that the Listing Agreement makes reference to sub-agency and says that the Listing agent already handed out the written explanation. Many, in fact, most Listing agents will simply assume that it was covered in the RECO Information Guide and it wasn’t. And, it’s been gone for years from the WWR and that document is now gone. This could present a very embarrassing situation for the Listing agent in cross-examination in any legal proceedings.

There is an acknowledgement that the Listing Brokerage may have similar properties and that’s not a conflict.

An appointment is made with respect to giving and receiving notices. So, that should be carried forward into an Offer or Agreement of Purchase and Sale. It should be noted that this appointment does not apply in the case of multiple representation.

The total commission is specified and the cooperating commission will come out of that.

Brokerage Listing: Multiple Representation

This is the Multiple Representation paragraph:

“3. MULTIPLE REPRESENTATION: The Seller hereby acknowledges that the Listing Brokerage may be entering into buyer representation agreements with buyers who may be interested in purchasing the Seller’s Property. In the event that the Listing Brokerage has entered into or enters into a buyer representation agreement with a prospective buyer for the Seller’s Property, the Listing Brokerage will require the Seller’s written consent to represent both the Seller and the buyer for the transaction.

The Seller understands and acknowledges that the Listing Brokerage must be impartial when representing both the Seller and the buyer and equally protect the interests of the Seller and buyer. The Seller understands and acknowledges that when representing both the Seller and the buyer, the Listing Brokerage shall have a duty of full disclosure to both the Seller and the buyer.

However, the Seller further understands and acknowledges that the Listing Brokerage shall not disclose: • that the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;

• that the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer;

• the motivation of or personal information about the Seller or buyer, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;

• the price the buyer should offer or the price the Seller should accept; and

• the Listing Brokerage shall not disclose to the buyer the terms of any other offer, unless otherwise directed in writing by the Seller.

However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the property will be disclosed to both Seller and Buyer to assist them to come to their own conclusions. The Brokerage shall not be appointed or authorized to be agent for either the Seller or the buyer for the purpose of giving and receiving notices where the Brokerage represents both the Seller and the buyer (multiple representation) or where the buyer or the seller is a self-represented party.”

Review

3. MULTIPLE REPRESENTATION:

Acknowledgement: Prospective Buyers

The Seller hereby acknowledges that the Listing Brokerage may be entering into buyer representation agreements

with buyers who may be interested in purchasing the Seller’s Property.

BRA in place

In the event that the Listing Brokerage has entered into or enters into a buyer representation agreement with a prospective buyer for the Seller’s Property,

Seller’s Consent Required

the Listing Brokerage will require the Seller’s written consent to represent both the Seller and the buyer for the transaction.

Conduct: Impartial

The Seller understands and acknowledges that the Listing Brokerage must be impartial

when representing both the Seller and the buyer and
equally protect the interests of the Seller and buyer.

Full Disclosure Required

The Seller understands and acknowledges that when representing both the Seller and the buyer, the Listing Brokerage

shall have a duty of full disclosure to both the Seller and the buyer.

Confidentiality Maintained

However, the Seller further understands and acknowledges that the Listing Brokerage shall not disclose:

• that the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;

• that the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer;

• the motivation of or personal information about the Seller or buyer, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;

• the price the buyer should offer or the price the Seller should accept; and

• the Listing Brokerage shall not disclose to the buyer the terms of any other offer, unless otherwise directed in writing by the Seller.

Exceptions

However, it is understood that

factual market information about comparable properties and
information known to the Listing Brokerage concerning potential uses for the property

will be disclosed to both Seller and Buyer to assist them to come to their own conclusions.

Notices: Delivery and Acceptance

The Brokerage shall not be appointed or authorized to be agent for either the Seller or the buyer for the purpose of giving and receiving notices where the Brokerage represents both the Seller and the buyer (multiple representation) or where the buyer or the seller is a self-represented party.”

COMMENT

In this section we are dealing with multiple representation. It should not occur by accident, however, sometimes it does. In the case of a specific real estate agent, if they have a Listing, then, they should avoid “signing up” the prospective Buyer to a BRA for that property until the Seller has actually granted permission.

With a larger Brokerage having some 500 agents, all basically working in the same general area, this can arise quite frequently. One agent has the Seller, and another agent has the Buyer and they both work for the same Brokerage.

In order to proceed, the Seller’s consent is required. That’s easy enough if it’s a different agent, but raises some issues if it’s the same agent.

The Brokerage is to act impartially and equally protect the interests of both the Seller and the Buyer in the same transaction, which includes the proposition of “full disclosure”. So, if the Seller has some information which they might otherwise have kept confidential, and that fact is known to the Seller’s agent, then, it must be disclosed to the Buyer. Why? There are no secrets! Consequently, a method which Buyers could utilize in order to obtain “more information” about a property would be to retain the Listing agent.

This arises in the case of Brokerage multiple representation situations. John Smith acts for the Seller and Mary Jones acts for the Buyer. They both work for ABC Brokerage.

Going forward, John Smith, Mary Jones and ABC Brokerage all act for the Seller and John Smith, Mary Jones and ABC Brokerage all act for the Buyer. Oftentimes, this issue is missed or simply overlooked.

Confidentiality is required when it comes to price, motivation and personal information. In addition, since TRESA and “open offers”, we now have an additional category in terms of disclosure of Offer contents. That is restricted to the contents of a “live competing” Offer.

This aspect of confidentiality does not extend to factual information which is “out there”. Nor, does it extend to potential uses, which can dramatically affect the value. The property is a working farm, but its real value lies in the fact that it may be developed for residential purposes, making it 20 times more valuable. This information, whatever it is, must be disclosed to both parties.

For the purposes of Notices, the Brokerage cannot give or receive them on behalf of the respective clients. They can deliver them, back and forth. The delivery times will be the times that the actual parties received their copies. So, the Brokerage may perform “courier services” in this regard. Otherwise, there would always be a question as to whether the agent was in possession of of the document for the Seller, or the Buyer. This provision is designed to eliminate that issue.

A frequent problem which arises is the fact that this information will be specified in an Offer. It’s automatically filled in by the software system being used or it was drafted for inclusion by a secretary at the office. That’s the first draft. That problem should be easily picked up by the real estate agent. If it’s not, it is a clear demonstration that this particular agent is not very careful.

Brokerage Listing: Multiple Representation and Designated Representation

This is the Multiple Representation and Designated Representation paragraph:

“3. MULTIPLE REPRESENTATION AND DESIGNATED REPRESENTATION: The Seller understands and acknowledges where both the Seller and buyer are represented by a designated representative of the Listing Brokerage, multiple representation will not result, unless that designated representative represents more than one client in the same trade, and will require consent in writing for such multiple representation. In the event of multiple representation and designated representation, the Brokerage duty of disclosure to both the seller and the buyer client is as more particularly set out in the agreement with the respective seller or buyer.”

Review

3. MULTIPLE REPRESENTATION AND DESIGNATED REPRESENTATION:

Acknowledgement

The Seller understands and acknowledges where both the Seller and buyer are represented by a designated representative of the Listing Brokerage,

multiple representation will not result,

Same DR for Both Clients

unless that designated representative represents more than one client in the same trade,

Consent Required

and will require consent in writing for such multiple representation.

Disclosure Requirements

In the event of multiple representation and designated representation,

the Brokerage duty of disclosure to both the seller and the buyer client is as more particularly set out in the agreement with the respective seller or buyer.

COMMENT

This is usually the multiple representation by accident scenario. Two clients both listed with the same Brokerage, two different representatives. Clients can switch if they like to Designated Representation and the potential conflict is avoided.

If they both wish to proceed with the same real estate agent, then, consent will be required and the previously discussed disclosure obligations shall apply.

Brokerage Listing: Finders Fees

This is the Finders Fees paragraph:

“4. FINDERS FEES: The Seller acknowledges that the Brokerage may be receiving a finder’s fee, reward and/or referral incentive, and the Seller consents to any such benefit being received and retained by the Brokerage in addition to the Commission as described above.”

Review

4. FINDERS FEES:

Acknowledgement of Payment

The Seller acknowledges that the Brokerage may be receiving a

finder’s fee,
reward and/or
referral incentive, and

Consent to Retention

the Seller consents to any such benefit being received and retained by the Brokerage in addition to the Commission as described above.

COMMENT

The interesting aspect here is the failure to mention the obligation to disclose. That’s a common law fiduciary duty and falls under the duty of accounting. The agent has to tell the principal. But now, whose money is it? Does the agent keep it or pass it on? Originally, all such payments would have to be passed on. That changed, however, disclosure is still required.

Nevertheless, this clause, without any disclosure points the money in the direction of the agent.

Brokerage Listing: Referral of Enquiries

This is the Referral of Enquiries paragraph:

“5. REFERRAL OF ENQUIRIES: The Seller agrees that during the Listing Period, the Seller shall advise the Listing Brokerage immediately of all enquiries from any source whatsoever, and all offers to purchase submitted to the Seller shall be immediately submitted to the Listing Brokerage before the Seller accepts or rejects the same. If any enquiry during the Listing Period results in the Seller accepting a valid offer to purchase during the Listing Period or within the Holdover Period after the expiration of the Listing Period, the Seller agrees to pay the Listing Brokerage the amount of Commission set out above, payable within five (5) days following the Listing Brokerage’s written demand therefor.”

Review

“5. REFERRAL OF ENQUIRIES:

When

The Seller agrees that during the Listing Period,

Referral to Listing Brokerage

the Seller shall advise the Listing Brokerage immediately of all enquiries

From Whom

from any source whatsoever, and

Offers Immediately

all offers to purchase submitted to the Seller shall be immediately submitted to the Listing Brokerage

Prior to Acceptance

before the Seller accepts or rejects the same.

Any APS: Commission Payable

If any enquiry during the Listing Period results in the Seller accepting a valid offer to purchase

during the Listing Period or
within the Holdover Period after the expiration of the Listing Period,

the Seller agrees to pay the Listing Brokerage the amount of Commission set out above,

Due on Demand

payable within five (5) days following the Listing Brokerage’s written demand therefor.”

COMMENT

This provision is intended to ensure that the Seller will not try to avoid the Listing Agreement. If they fail to refer the person or the Offer to the Listing agent, then, that person would still fall within the “introduced to the property” provisions during the Listing period.

Here, the possible breach is noted and the Seller’s obligation is to pay the commission within 5 days of the DEMAND for payment. That’s interesting since other provisions set the time as due on the completion date. Here, we could be still three months prior to completion. The assumption in this paragraph is that completion has already taken place. Hence, the demand!

Brokerage Listing: Marketing

This is Marketing paragraph:

“6. MARKETING: The Seller agrees to allow the Listing Brokerage to show and permit prospective buyers to fully inspect the Property during reasonable hours and the Seller gives the Listing Brokerage the sole and exclusive right to place “For Sale” and “Sold” sign(s) upon the Property. The Seller consents to the Listing Brokerage including information in advertising that may identify the Property. The Seller further agrees that the Listing Brokerage shall have sole and exclusive authority to make all advertising decisions relating to the marketing of the Property for sale during the Listing Period. The Seller agrees that the Listing Brokerage will not be held liable in any manner whatsoever for any acts or omissions with respect to advertising by the Listing Brokerage or any other party, other than by the Listing Brokerage’s gross negligence or wilful act. The Seller acknowledges the Brokerage in accordance with MLS® Rules and Regulations, and the Canadian Real Estate Association REALTOR® Code of Ethics, this Listing shall be, within three (3) days of Public Marketing, placed on an MLS® System for cooperation with other REALTORS®.”

Review

6. MARKETING:

The Seller agrees to allow the Listing Brokerage

Showings by Listing Brokerage

to show and

Full Inspections by Buyers

permit prospective buyers to fully inspect the Property

during reasonable hours and the

Signage

Seller gives the Listing Brokerage the sole and exclusive right to place “For Sale” and “Sold” sign(s) upon the Property.

Advertising: Property Identification

The Seller consents to the Listing Brokerage including information in advertising that may identify the Property.

Advertising: Decisions

The Seller further agrees that the Listing Brokerage shall have sole and exclusive authority to make all advertising decisions relating to the marketing of the Property for sale during the Listing Period.

Advertising: No Liability

The Seller agrees that the Listing Brokerage will not be held liable

in any manner whatsoever for any acts or omissions with respect to advertising by

the Listing Brokerage or any other party,
other than by the Listing Brokerage’s gross negligence or wilful act.

Advertising: Public MLS within 3 Days

The Seller acknowledges the Brokerage

in accordance with MLS® Rules and Regulations, and

the Canadian Real Estate Association REALTOR® Code of Ethics,

this Listing shall be, within three (3) days of Public Marketing, placed on an MLS® System for cooperation with other REALTORS®.

COMMENT

This provision with respect to marketing seems very broad. It’s rather strange that it enables the Listing Brokerage to provide the Buyer with a full inspection opportunity. Possibly, in many cases, that’s not appropriate. Is this inspection: 1) prior to an Offer, 2) during a conditional period, or 3) only with an unconditional agreement? The document does not specify.

Signage is authorized, but, in every case, is this suitable? What about the sale of a business? What if a nearby property is still on the market?

All the advertising decisions will be made by the Listing Brokerage. This might deal with newspaper and social media advertising, as well as open houses. If the Seller wants to participate, then, additional matters should be addressed in Schedule “A”.

It seems peculiar that the Listing Brokerage takes no responsibility for the advertising. Why not! They are the ones who drafted and came up with the incorrect information, if that’s how it turns out. Naturally, on occasion, the Seller might be the source. However, why not leave the issue where it would be, and that is the Listing Brokerage’s negligence? Why step this up to “gross negligence”? In other words, the Listing Brokerage cannot be sued for negligence, only for “gross” negligence.

A new CREA rule deals with the issue of marketing. If a Brokerage is going to use the CREA affiliation to promote its role and publicly market the property, then, it must be posted on MLS within three days. The reason is that many Brokerages might seek to “double-end” the deal. They will post everything on social media and simply say “Coming soon” to MLS, but a month passes and the Listing Brokerage double-ends the deal. This is intended to discourage that practice. In fact, another Brokerage’s client may have a higher Offer. So, the person who really loses out is the Seller.

Brokerage Listing: Warranty

This is the Warranty paragraph:

“7. WARRANTY: The Seller represents and warrants that the Seller has the exclusive authority and power to execute this Authority to offer the Property for sale and that the Seller has informed the Listing Brokerage of any third party interests or claims on the Property such as rights of first refusal, options, easements, mortgages, encumbrances or otherwise concerning the Property, which may affect the sale of the Property.”

Review

7. WARRANTY:

Authority to Sell

The Seller represents and warrants that the Seller has the exclusive authority and power to execute this Authority to offer the Property for sale and that

Interests and Claims

the Seller has informed the Listing Brokerage of any third party interests or claims on the Property such as

rights of first refusal,
options,
easements,
mortgages,
encumbrances
or otherwise

concerning the Property,

which may affect the sale of the Property.

COMMENT

This warranty provisions first starts with authority to sell. In the case of an Estate sale, it may very well be that the Seller is asking that question of the Listing agent, rather than the other way around.

If the deceased was testate, then the property could immediately be listed by the Estate Trustee. On the other hand, if the deceased was intestate (had no Will), then, it is necessary to wait until a Certificate of Appointment of Estate Trustee without a Will has been granted.

The list of disclosures seems rather peculiar. Shouldn’t the presence of a residential Tenant be extremely important? Maybe, they won’t move, or require a “cash for keys” arrangement? Some easements are major and others are minor. What about taxes? If they are in substantial arrears, then, this could result in a “tax sale”. Also, what about “executions” that have been filed or are ready to be filed against the title? They could result in a judicial sale of the property. There may be significant encroachments. Depending upon the application of the rules of adverse possession and prescription, they could be either temporary or permanent.

Brokerage Listing: Indemnification and Insurance

This is the Indemnification and Insurance paragraph:

“8. INDEMNIFICATION AND INSURANCE: The Seller will not hold the Listing Brokerage and representatives of the Brokerage responsible for any loss or damage to the Property or contents occurring during the term of this Agreement caused by the Listing Brokerage or anyone else by any means, including theft, fire or vandalism, other than by the Listing Brokerage’s gross negligence or wilful act. The Seller agrees to indemnify and save harmless the Listing Brokerage and representatives of the Brokerage and any co-operating brokerage from any liability, claim, loss, cost, damage or injury, including but not limited to loss of the Commission payable under this Agreement, caused or contributed to by the breach of any warranty or representation made by the Seller in this Agreement and, if attached, the accompanying data form. The Seller warrants the Property is insured, including personal liability insurance against any claims or lawsuits resulting from bodily injury or property damage to others caused in any way on or at the Property and the Seller indemnifies the Brokerage and all of its employees, representatives, salespersons and brokers (Listing Brokerage) and any co-operating brokerage and all of its employees, representatives, salespersons and brokers (co-operating brokerage) for and against any claims against the Listing Brokerage or co-operating brokerage made by anyone who attends or visits the Property.”

Review

8. INDEMNIFICATION AND INSURANCE:

Release from Liability

The Seller will not hold the Listing Brokerage and representatives of the Brokerage responsible for any loss or damage to

the Property
or contents

occurring during the term of this Agreement

Causation

caused by the Listing Brokerage or anyone else by any means, including

theft,
fire or
vandalism,

Exception

other than by the Listing Brokerage’s gross negligence or wilful act.

Indemnification

The Seller agrees to indemnify and save harmless the

Whom

Listing Brokerage and representatives of the Brokerage and

any co-operating brokerage

For What

from any liability, claim, loss, cost, damage or injury,

including but not limited to loss of the Commission payable under this Agreement,

Causation in whole or in part

caused or contributed to by the breach of any warranty or representation made by the Seller

Specified Where

in this Agreement and, if attached, the accompanying data form.

Insurance: Property

The Seller warrants the Property is insured,

Insurance: Personal Liability

including personal liability insurance

against any claims or lawsuits

resulting from bodily injury or property damage to others caused in any way on or at the Property and

General Indemnification

the Seller indemnifies the Brokerage and

all of its employees, representatives, salespersons and brokers (Listing Brokerage)

and any co-operating brokerage and

all of its employees, representatives, salespersons and brokers (co-operating brokerage)

for and against any claims against the Listing Brokerage or co-operating brokerage made by anyone who attends or visits the Property.

COMMENT

Release

At the outset, the Seller releases liability for both the Listing Brokerage and its representatives. There’s no mention here of the Co-operating Brokerage. If there’s loss or damage to either your property or your contents, you have already released the Listing Brokerage and its representatives. The loss or damage would be due to theft, fire or vandalism. Now, presumably that’s not fire, theft or vandalism at the instance of the Listing Brokerage or one of its representatives? In any event, you have already forgiven them upfront.

There is a no release for theft, fire or vandalism where the Listing Brokerage has actually caused it by gross negligence or wilful act, That’s an exception, however, there’s still a full release where the Listing Brokerage has caused it (or anyone else has caused it) due to negligence.

Indemnification

The indemnification provision obligates the Seller to pay! The Seller makes a representation or gives a warranty and subsequently is in “breach”, then the Seller needs to compensate:

Listing Brokerage and representatives of the Brokerage and
any co-operating brokerage

Now, at this point it does seem odd that representatives of the co-operating brokerage are not covered. But, too bad for them!

Also, note that it says “caused by or contributed to”. This means in whole or in part. If we have partial contribution, we don’t have reduced liability, we still have full liability.

At this point, the Seller should request the agent to determine whether the Seller’s liability insurance covers them on this point, and make sure that the failure to provide the correct answer shall constitute “gross negligence”.

You can appreciate that the indemnification provision is somewhat pushing the limits.

Fortunately, there is a restriction and that is:

The Listing, and
The Data Form, if attached

Obviously, careful notes should be made to ensure that the Data Form is “attached”. If it’s not attached, then, there’s no liability, so that would be advantageous to any Seller.

Insurance

The Seller needs to confirm that the have insurance, both for property (for their own losses) and liability for damages to others. There is no specific amount noted in terms of any deductible nor any minimum amount of coverage. So, I suppose the $1.00 insurance policy is good enough, or “self-insurance”.

It should be noted that many large corporations and governments are self-insured up to rather high limits.

When it comes to the personal liability coverage, it must protect against any claims or lawsuits

resulting from bodily injury or property damage to others
caused in any way on or at the Property

This doesn’t mean that the Seller actually did something, or failed to do something. The simple point here is that there is such a policy in force.

The only connection to the Seller is “at” or “on” the property. The fact that the prospective Buyer fell on account of excessive alcohol consumption is not a factor here.

General Indemnification

This provision seems overly broad in nature. There are two Brokerages that are indemnified AND their respective representatives, the Listing Brokerage and the Co-operating Brokerage. However, there is a further extension here to include “employees” of both.

At this point. we have a claim made against either or both of the Brokerages, but not necessarily the representatives or employees.

The claim can be made by anyone and the only test is that they:

Attended, or
Visited

the property.

There is an obligation placed upon the real estate agent to explain this provision carefully. That’s a requirement. So, if you are ever suing for your commission in Court, you had better be able to explain this clause in detail to the Judge, otherwise, there could be issues relating to the other explanations that you made.

Brokerage Listing: Family Law Act

This is the Family Law Act paragraph:

“9. FAMILY LAW ACT: The Seller hereby warrants that spousal consent is not necessary under the provisions of the Family Law Act, R.S.O. 1990, unless the spouse of the Seller has executed the consent hereinafter provided.”

Review

9. FAMILY LAW ACT:

Warranty: No Signature Necessary

The Seller hereby warrants that spousal consent is not necessary

under the provisions of the Family Law Act, R.S.O. 1990,

Unless Spouse Signs

unless the spouse of the Seller has executed the consent hereinafter provided.

COMMENT

So, if the spouse signs, then, the Family Law Act consent is required.

If there’s no signature, then, the Seller actually warrants that the signature is not required.

This provision deal with the matrimonial home. Was the property a matrimonial home? The key time period is the date of separation, not now. So, the spouse may have left the matrimonial home 10 years ago, 20 years ago or even 30 years ago and that spousal consent will be required.

The Spouse may be entitled to a Court Order providing them with exclusive possession of the property. That’s likely a major issue for the Buyer.

Brokerage Listing: Use and Distribution of Information

This is the Use and Distribution of Information paragraph:

“11. USE AND DISTRIBUTION OF INFORMATION: The Seller consents to the collection, use and disclosure of personal information by the Brokerage for the purpose of listing and marketing the Property including, but not limited to: listing and advertising the Property using any medium including the Internet; disclosing Property information to prospective buyers, brokerages, salespersons and others who may assist in the sale of the Property; such other use of the Seller’s personal information as is consistent with listing and marketing of the Property. The Seller consents, if this is an MLS® Listing, to placement of the listing information and sales information by the Brokerage into the database(s) of the MLS® System of the appropriate Board, and to the posting of any documents and other information (including, without limitation, photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions) provided by or on behalf of the Seller into the database(s) of the MLS® System of the appropriate Board. The Seller hereby indemnifies and saves harmless the Brokerage and/or any of its employees, servants, brokers or sales representatives from any and all claims, liabilities, suits, actions, losses, costs and legal fees caused by, or arising out of, or resulting from the posting of any documents or other information (including, without limitation, photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions) as aforesaid. The Seller acknowledges that the database, within the board’s MLS® System is the property of the real estate board(s) and can be licensed, resold, or otherwise dealt with by the board(s). The Seller further acknowledges that the real estate board(s) may: during the term of the listing and thereafter, distribute the information in the database, within the board’s MLS® System to any persons authorized to use such service which may include other brokerages, government departments, appraisers, municipal organizations and others; market the Property, at its option, in any medium, including electronic media; during the term of the listing and thereafter, compile, retain and publish any statistics including historical data within the board’s MLS® System and retain, reproduce and display photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions which may be used by board members to conduct comparative analyses; and make such other use of the information as the Brokerage and/or real estate board(s) deem appropriate, in connection with the listing, marketing and selling of real estate during the term of the listing and thereafter. The Seller acknowledges that the information, personal or otherwise (“information”), provided to the real estate board or association may be stored on databases located outside of Canada, in which case the information would be subject to the laws of the jurisdiction in which the information is located.”

Review

11. USE AND DISTRIBUTION OF INFORMATION:

Seller Consent

The Seller consents to the collection, use and disclosure of personal information by the Brokerage

for the purpose of

listing and
marketing

the Property

including, but not limited to:

listing and advertising the Property using any medium including the Internet;
disclosing Property information to prospective buyers, brokerages, salespersons and others who may assist in the sale of the Property;
such other use of the Seller’s personal information as is consistent with listing and marketing of the Property.

MLS Consent

The Seller consents, if this is an MLS® Listing,

to placement of the listing information and sales information by the Brokerage into the database(s) of the MLS® System of the appropriate Board, and

to the posting of any documents and other information (including, without limitation, photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions) provided by or on behalf of the Seller into the database(s) of the MLS® System of the appropriate Board.

Seller’s Indemnification

Brokerage etc.

The Seller hereby indemnifies and saves harmless the Brokerage and/or any of its employees, servants, brokers or sales representatives

All Claims

from any and all claims, liabilities, suits, actions, losses, costs and legal fees

Causation

caused by, or arising out of, or resulting from the posting of any documents or other information (including, without limitation, photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions) as aforesaid.

Real Estate Boards Own MLS

The Seller acknowledges that the database, within the board’s MLS® System is the property of the real estate board(s) and can be licensed, resold, or otherwise dealt with by the board(s).

During Currency of Listing

The Seller further acknowledges that the real estate board(s) may: during the term of the listing and thereafter, distribute the information in the database,

within the board’s MLS® System to any persons authorized to use such service which may include other brokerages, government departments, appraisers, municipal organizations and others;

market the Property, at its option, in any medium, including electronic media;

During Currency and Afterwards

during the term of the listing and thereafter, compile, retain and publish any statistics including historical data within the board’s MLS® System and retain, reproduce and display photographs, images, graphics, audio and video recordings, virtual tours, drawings, floor plans, architectural designs, artistic renderings, surveys and listing descriptions which may be used by board members to conduct comparative analyses; and

make such other use of the information as the Brokerage and/or real estate board(s) deem appropriate, in connection with the listing, marketing and selling of real estate during the term of the listing and thereafter.

Notice: Other Jurisdictions Beyond Canada

The Seller acknowledges that the information, personal or otherwise (“information”), provided to the real estate board or association may be stored on databases located outside of Canada, in which case the information would be subject to the laws of the jurisdiction in which the information is located.

COMMENT

The Seller consents to the collection and use of the information both relating to the property and personal information as well. This will be posted through the MLS database which is owned by a group of real estate boards.

If there are any lawsuits, which arise as a result of the posting, the Seller will be responsible for indemnification of the Brokerage, its employees, servants, brokers or sales representatives.

You will notice that this is the first time the reference to “servants” has appeared, although there have already been a number of indemnification clauses.

Both before and after the currency of the Listing, the information can be used for comparative market analysis. The information here has become “historic” in nature and cannot later be removed,

Should a Seller wish to ensure that all of their information will be removed, then, they will have to go the “Exclusive Listing” route, and although some matters may be removed or deleted from websites and various social media platforms, nevertheless, for those who are astute and internet savvy, it’s all still there.

Also, the MLS database itself might be “in the cloud” subject to the laws of another jurisdiction beyond Canada.

Brokerage Listing: Consent To Contact

This is the Consent to Contact paragraph:

Consent to Contact

“In the event that this Agreement expires or is cancelled or otherwise terminated and the Property is not sold, the Seller, by initialling:

DOES DOES NOT

consent to allow other real estate board members to contact the Seller after expiration or other termination of this Agreement to discuss listing or otherwise marketing the Property.”

Review

Consent to Contact

In the event that this Agreement

expires or
is cancelled or
otherwise terminated

and the Property is not sold,

the Seller, by initialling:

DOES DOES NOT

consent to allow

other real estate board members to contact the Seller

after expiration or other termination of this Agreement to discuss listing or otherwise marketing the Property.

COMMENT

At the outset, you should know that there was no actual paragraph entitled “Consent to Contact”. I just made that up, so you would be better able to follow this discussion.

The paragraph is contained in a box, between paragraphs 11 and 12.

Generally, it’s designed to discourage any other potential Listing agents from contacting the prospective Seller, if there is no sale of the property. However, those who are planning to contact the Seller will do so anyways, and if they are somewhat discouraged by the “does not” election will find some sort of an “end run” to contact the Seller.

While the premise was 1) expiration, 2) cancellation and 3) termination, the actual initials were only activated for expiration and termination. Cancellation for some reason was simply omitted.

Brokerage Listing: Successors and Assigns

This is the Successors and Assigns paragraph:

“12. SUCCESSORS AND ASSIGNS: The heirs, executors, administrators, successors and assigns of the undersigned are bound by the terms of this Agreement.”

Review

“12. SUCCESSORS AND ASSIGNS:

The

heirs,
executors,
administrators,
successors and
assigns

of the undersigned are bound by the terms of this Agreement.”

COMMENT

What is the purpose of this clause? It’s to make sure that even if you are dead, you are still stuck with this deal. That means that your heirs will still be liable.

It also places an obligation upon your executors and administrators to follow through. You would have an Executor if you had made a Will. Without a Will, then the Court would appoint an Administrator. Well, that was the way it was 30 years ago. Now, we have an Estate Trustee with a Will and an Estate Trustee without a Will. So, we are somewhat out of date here.

Naturally, they are only responsible for the transaction by spending your money, not their own money.

Next, successors are included as are any assigns. A successor will be someone taking over from you and an assignee is someone who is taking over because they have bought out your interest. If you purchase a property and now list it for sale by way of an assignment, your assignee will still be obligated to follow through on your behalf.

In all cases, you are the one who is signing off for them and agreeing that your own estate etc. will continue with the responsibility.

Brokerage Listing: Conflict or Discrepancy

This is the Conflict or Discrepancy paragraph:

“13. CONFLICT OR DISCREPANCY: If there is any conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard pre-set portion hereof, the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement, including any Schedule attached hereto, shall constitute the entire Agreement between the Seller and the Listing Brokerage. There is no representation, warranty, collateral agreement or condition which affects this Agreement other than as expressed herein.”

Review

13. CONFLICT OR DISCREPANCY:

Conflicts

If there is any conflict or discrepancy between

any provision added to this Agreement
(including any Schedule attached hereto)

and any provision in the standard pre-set portion hereof,

Added Provision Supersedes Standard

the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy.

Entire Agreement

This Agreement, including any Schedule attached hereto,

shall constitute the entire Agreement

between the Seller and the Listing Brokerage.

There is no

representation,
warranty,
collateral agreement or
condition

which affects this Agreement other than as expressed herein.

COMMENT

This provision sets out that the added paragraphs will supersede the standard provisions in the case of conflict.

Basically, that means that you can add something and be certain that the provision will prevail. It’s not necessary to go back through the standard form and make all kinds of changes.

Also, it means that whatever you decide, better be correct, comprehensive and well-thought out. Otherwise, it can create confusion.

So, your location for changes should be Schedule “A”. Place any matters for amendment or for certainty in there.

In addition, buried in that paragraph, is the “entire agreement” provision. This is it! This is all there is. There are no statements. There are no side agreements. There are no representations. Everything is right here for you to read. If it’s not “in writing”, then it doesn’t exist.

Now, of course, there is a duty placed upon the real estate agent to draft up a correct, comprehensive and accurate agreement. Obviously, don’t leave anything out. Otherwise, that may constitute negligence and result in a claim against the agent and the Brokerage.

Brokerage Listing: Electronic Communication

This is the Electronic Communication paragraph:

“14. ELECTRONIC COMMUNICATION: This Agreement and any agreements, notices or other communications contemplated thereby may be transmitted by means of electronic systems, in which case signatures shall be deemed to be original. The transmission of this Agreement by the Seller by electronic means shall be deemed to confirm the Seller has retained a true copy of the Agreement.”

Review

14. ELECTRONIC COMMUNICATION:

This Agreement and

any agreements,
notices or
other communications contemplated thereby

may be transmitted by means of electronic systems,

in which case signatures shall be deemed to be original.

The transmission of this Agreement by the Seller by electronic means shall be deemed to confirm the Seller has retained a true copy of the Agreement.

COMMENT

It is interesting to consider that no mention was made of faxes, emails, or texts. Are all three appropriate for use? Should the correct email addresses be specified? Very frequently there is no “signature”. So, are those documents deemed to be “signed”?

Certainly, when there is an actual signature applied and a photocopy, scan or PDF sent which illustrates that “signature”, then, that would be covered under this paragraph.

It would be advisable to specify the contact emails in Schedule “A”, if this method of communication is to be used. Most people will have more than one email address. They might check one or more addresses and never check another, so the proper address should be mentioned.

Also, if the Seller sent something then they are deemed to have a copy for themselves.

Brokerage Listing: Electronic Signatures

This is the Electronic Signatures paragraph:

“15. ELECTRONIC SIGNATURES: If this Agreement has been signed with an electronic signature the parties hereto consent and agree to the use of such electronic signature with respect to this Agreement pursuant to the Electronic Commerce Act, 2000, S.O. 2000, c17 as amended from time to time.”

Review

15. ELECTRONIC SIGNATURES:

If this Agreement has been signed with an electronic signature

the parties hereto consent and agree to the use of such electronic signature

with respect to this Agreement pursuant to the Electronic Commerce Act, 2000, S.O. 2000, c17 as amended from time to time.

COMMENT

The Electronic Commerce Act enables the use of electronic signatures. It’s not mandatory, it’s elective.

So, if electronic signatures are used, then, this will be the evidence of consent. This means if the Seller signs electronically, then both parties agree that such a signature will bind the Seller. And if, the Brokerage signs electronically, then both parties agree that such a signature will bind the Brokerage.

Brokerage Listing: Market the Property

This is the “Market the Property” paragraph:

“THE LISTING BROKERAGE AGREES TO MARKET THE PROPERTY ON BEHALF OF THE SELLER AND REPRESENT THE SELLER IN AN ENDEAVOUR TO OBTAIN A VALID OFFER TO PURCHASE THE PROPERTY ON THE TERMS SET OUT IN THIS AGREEMENT OR ON SUCH OTHER TERMS SATISFACTORY TO THE SELLER.

________________________ ____ _______________

(Authorized to bind the Listing Brokerage) (Date) (Name of Person Signing)”

Review

Market the Property

THE LISTING BROKERAGE AGREES TO

Market the Property

MARKET THE PROPERTY ON BEHALF OF THE SELLER AND

Represent

REPRESENT THE SELLER

Seeking Valid Offer

IN AN ENDEAVOUR TO OBTAIN A VALID OFFER TO PURCHASE

THE PROPERTY

ON THE TERMS SET OUT IN THIS AGREEMENT OR

ON SUCH OTHER TERMS SATISFACTORY TO THE SELLER.

________________________ ____ _______________

(Authorized to bind the Listing Brokerage) (Date) (Name of Person Signing)”

COMMENT

For some reason the is no numbering for this paragraph and the title is mine. There are two obligations here:

Market, and
Represent.

There is a signature below this statement which also requires the date and the name of the person signing, in the event that their signature is not otherwise legible.

Brokerage Listing: Acceptance

This is the “Acceptance” paragraph:

“THIS AGREEMENT HAS BEEN READ AND FULLY UNDERSTOOD BY ME, I ACCEPT THE TERMS OF THIS AGREEMENT AND I ACKNOWLEDGE ON THIS DATE I HAVE SIGNED UNDER SEAL. Any representations contained herein or as shown on any accompanying data form respecting the Property are true to the best of my knowledge, information and belief.

SIGNED, SEALED AND DELIVERED I have hereunto set my hand and seal:

________________________ ______________ ______________

(Signature of Seller) (Seal) (Date) (Tel. No.)

_________________________________ _______ ______________ ___________________

(Signature of Seller) (Seal) (Date) (Tel. No.)

Review

“THIS AGREEMENT HAS BEEN

Understanding

READ AND FULLY UNDERSTOOD BY ME,

Acceptance of the Terms

I ACCEPT THE TERMS OF THIS AGREEMENT AND

Signed under Seal

I ACKNOWLEDGE ON THIS DATE I HAVE SIGNED UNDER SEAL.

Representations

Any representations contained herein

or as shown on any accompanying data form respecting the Property

Representations Qualified

are true to the best of my knowledge, information and belief.

Execution

SIGNED, SEALED AND DELIVERED I have hereunto set my hand and seal:

Signature, Seal Date and Telephone Number

COMMENT

This paragraph deals with the signing and execution of the document. It also contains a statement that the “representations” contained in this Agreement together with the Data Form are “true”, but that is qualified by “to the best of my knowledge and belief” which is an obvious step down in terms of legal liability. This is significant because the representations cannot really be relied upon.

Brokerage Listing: Spousal Consent

This is the Spousal Consent paragraph:

“SPOUSAL CONSENT: The undersigned spouse of the Seller hereby consents to the listing of the Property herein pursuant to the provisions of the Family Law Act, R.S.O. 1990 and hereby agrees to execute all necessary or incidental documents to further any transaction provided for herein.”

Review

SPOUSAL CONSENT:

The undersigned spouse of the Seller

Consent to Listing

hereby consents to the listing of the Property herein

pursuant to the provisions of the Family Law Act, R.S.O. 1990 and

Execute All Documents

hereby agrees to execute all necessary or incidental documents

Any Transaction

to further any transaction provided for herein.

COMMENT

This is a very broad statement. The spouse signs this consent and they not only agree to this “listing”, but to sign any Offers, Agreements, Transfer/Deeds, Directions etc.

You would think that it would say “acceptable to them”. But, that’s not what it says. That issue is specifically avoided. So, if the Seller agrees to accept an Offer, whatever it may be, then, the Spouse agrees to go along and execute the Spousal Consent as it appears later in the transaction.

The Spousal Consent is designed to release the “right of possession with respect to a matrimonial home”, however, there may very well be other factors in terms of price, terms, and closing date which might affect their decision. By signing this consent, those factors are no longer relevant.

However, the real estate agent must explain that and they should also explain that there is no consideration flowing to them in the Agreement of Purchase and Sale, or in this Listing Agreement, so, the only factor that will bind them to the contract is the use of the legal seal. So, the agent will have to carefully explain that. In fact, most Spouses who are about to sign off on this, should postpone signing the Listing and simply take the position that they will sign in the future if the Offer is acceptable to them.

Brokerage Listing: Declaration of Insurance

This is the Declaration of Insurance paragraph:

DECLARATION OF INSURANCE

The Salesperson/Broker/Broker of Record ________________________________

(Name of Salesperson/Broker/Broker of Record)

hereby declares that he/she is insured as required by TRESA.

_________________________________________

(Signature(s) of Salesperson/Broker/Broker of Record)

Review

Registrant

The Salesperson/Broker/Broker of Record

Declaration

hereby declares that he/she is insured as required by TRESA.

COMMENT

A registrant under the TRESA legislation must maintain insurance coverage. This is a statement that they have such insurance.

Now, the interesting issue here is that the agreement is between the Seller and the Brokerage, BUT, there is no such similar declaration that the Brokerage has insurance coverage. Obviously, there should be!

It would be wise for the Seller to check the Brokerage’s registration status on the RECO website.

Brokerage Listing: Acknowledgement

This is the Acknowledgement paragraph:

ACKNOWLEDGEMENT

The Seller(s) hereby acknowledge that the Seller(s) fully understand the terms of this Agreement and have received a copy of this Agreement

on the …………………………. day of ……………..…………, 20 …………………………..

__________________________________________________________________________________________

(Signature of Seller) (Date)

__________________________________________________________________________________________

(Signature of Seller) (Date)

Review

ACKNOWLEDGEMENT

The Seller(s) hereby acknowledge that the Seller(s)

Full Understanding

fully understand the terms of this Agreement and

Receipt of Copy

have received a copy of this Agreement

COMMENT

It is rather interesting here, that each of the Sellers “sign” for themselves as well as any other Sellers, confirming that they ALL understand. Ordinarily, the Sellers would each sign for themselves.

Naturally, this is a matter that the agent requesting the signature should bring to the attention of each of the Sellers before they sign.

Brokerage Listing: Schedule A

This is Schedule A:

Schedule A

Listing Agreement

Seller Representation Agreement

Authority to Offer for Sale

This Schedule is attached to and forms part of the Listing Agreement Seller Representation Agreement, Authority to Offer for Sale (Agreement) between:

Brokerage: _______________________________________________, and

Seller: _______________________________________________________

Property: ____________________________________________________

This Schedule to the Agreement, inter alia, sets out the details of the provision of services, confidentiality and representation by the Brokerage, and subject to the terms of Clause 13 in the Agreement (Conflict or Discrepancy), is in addition to provision of services, confidentiality and representation set out in the Agreement.

This form must be initialled by all parties to the Agreement.

INITIALS OF LISTING BROKERAGE: ________ INITIALS OF SELLER(S): _________

Review:

Titles to the Document

Schedule A

Listing Agreement

Seller Representation Agreement

Authority to Offer for Sale

Attachment

This Schedule is attached to and

forms part of the Listing Agreement Seller Representation Agreement, Authority to Offer for Sale (Agreement) between:

Brokerage: _______________________________________________, and

Seller: _______________________________________________________

Property: ____________________________________________________

This Schedule to the Agreement,

inter alia, (latin: meaning among other things)

sets out the details of the provision of

services,
confidentiality and
representation

by the Brokerage, and

subject to the terms of Clause 13 in the Agreement (Conflict or Discrepancy),

Addition

is in addition to provision of services, confidentiality and representation set out in the Agreement.

Initials Required

This form must be initialled by all parties to the Agreement.

INITIALS OF LISTING BROKERAGE: ________ INITIALS OF SELLER(S): _________

COMMENT

This document is now required to complete the agreement. There are some provisions set out in the Act, and the RECO Information Guide.

This Schedule should be used for any changes, amendments, or additional matters that should be addressed.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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