The following statement was recently published on a Facebook Group dealing largely with real estate agents:
Let me teach you how referrals work. Agent A who works and specializes in area A sells a house belonging to clients B. Clients B decide they want to move to area X. Agent A contacts an agent in area X and X agent agrees on a referral contract for these buyers. Clients B, after seeing a few houses in area X decide that they don’t like it and they want to purchase another home back in area A. Agent X is NOT allowed to refer them to ANOTHER agent in area A in order to scoop up a 25% referral fee! They must go back to agent A! They were agent A’s clients in the first place. Stop with the shitty behavior in this business. It’s unethical.
Yes, it’s highly unethical.
I would think that this is a breach of an implied term of the referral agreement, namely “no double-crossing”. It would be contrary to Bhasin v. Hrynew.
So, the first agent could sue the culprit and be successful. A defence like “ I couldn’t remember who referred me wouldn’t fly”.
Be cautious and be careful. If you seriously breach the rules your reputation will be damaged in the real estate profession forever!
Brian Madigan LL.B., Broker