Question:
I have a potential client who wants to list their home with me.
They had their home listed with another brokerage with a listing period of Sept 2022 to February 2023, with a 90 day holdover.
In November 2022, the listing was terminated via form 242. So, when does holdover start, in Nov 2022 or February 2023?
How can holdover be enforced? The seller has kept all the offers they received so we have all the names of the brokerages and buyers, however how about buyers who were shown the property but never submitted an offer?
Answer:
If you used Form 242 and it was not changed or amended, then the holdover period survives and continues both during the currency period and the holdover period which would commence in February. The intention is to avoid the “end run” where the two parties do business together.
If you list at an equal or higher commission rate, then there will be nothing owing to the previous Listing Brokerage. If you list for less, then, the Seller will owe the differential to the first Brokerage. If you are both 5%, then nothing is owing. If they were 4% and you are 5%, there is nothing owing. If they were 5% and you are 4%, then your Seller has to pay them 1%. That obligation will continue until 90 days after the February 2023 expiry date.
Brian Madigan LL.B., Broker