Brian R. Madigan LL.B., Broker
Note: my comments in italics
ARTICLE 7 – REMUNERATION
7.01 The Rules herein are subject to the terms and conditions of the MLS® Listing Agreement between the Listing Brokerage and the Seller provided that there is no conflict with the RECO Rules, the CREA Rules or these PropTx MLS® Rules, or any applicable laws or regulatory requirements.
Laws related to executions shall take precedence
7.02 MLS® Listings submitted through the MLS® System shall state the remuneration offered by the Listing Brokerage to the Co-operating Brokerage in accordance with the provisions in Article 3.
The reference in 3 about remuneration:
3.04 b) The Broker Remarks field shall only display comments which provide pertinent information that could impact Co-operating Brokerages, including, but not limited to:
i. Any terms of the MLS® Listing Agreement that would modify either the total remuneration payable to the Listing Brokerage or the offer of remuneration payable to the Co-operating Brokerage; and
ii. Seller contact information;
7.03 If the offer of remuneration is altered, such change shall be made through Seller direction by way of completing an Amendment to the MLS® Listing Agreement and immediately reporting through the MLS® System. Provided that remuneration offered to a Co-operating Brokerage shall not be altered between the time of registration of an Offer and final acceptance of that Offer.
Seller is required to sign for changes.
No changes whatsoever permitted between registration and final acceptance.
7.04 Where the remuneration to be offered to a Co-operating Brokerage is specified under the terms of Article 7.02 or 7.03 above, the Listing Brokerage shall be required to pay the Co-operating Brokerage such remuneration unless such is modified by agreement in writing between the Co-operating Brokerage and the Listing Brokerage.
Listing Brokerage has obligation to pay co-operating Brokerage
7.05 The remuneration earned by a Co-operating Brokerage is due and payable within seven (7) days of completion of the transaction.
Due for payment in 7 days
a) In instances where the remuneration amount is in dispute, the Listing Brokerage must pay the remuneration in question, and make an Arbitration Claim pursuant to the requirements of the Association By-Law. If the Listing Brokerage substantiates its Claim, the Co-operating Brokerage will be obligated to return the remuneration to the Listing Brokerage.
Dispute: pay claim and go to arbitration
7.06 Unless otherwise agreed to in writing between the Listing Brokerage and Cooperating Brokerage, when the full remuneration is not paid to the Listing Brokerage in accordance with the amount stated on the MLS® Listing Agreement (or as amended, if applicable) due to a breach of contract between the Seller and Listing Brokerage or other circumstances, the Co-operating Brokerage will still be entitled to the agreed to remuneration in accordance with Article 7.05.
Full co-op not paid
Seller’s fault
Co-op still entitled to the full amount
And where the full remuneration is not received by the Listing Brokerage, and where the Co-operating Brokerage is entitled to a share of the remuneration to be paid by the Seller and not from the Buyer pursuant to a Buyer Representation Agreement or Buyer Customer Service Agreement, the following provisions shall apply:
Listing still short of funds (and no real resort to BRA)
The Brokerages involved in the transaction are encouraged to find a mutually agreeable solution within sixty (60) days from the date of closing. During these sixty (60) days, the Listing Brokerage has the right to:
a) Commence legal action against the Seller to:
i. recover the full remuneration; or
ii. recover remuneration adequate to pay the full amount of remuneration owing to the Co-operating Brokerage; or
b) Pay the full amount of remuneration owing to the Co-operating Brokerage.
Choices: Sue or Pay
Sue either for the full commission or just the co-op commission
Option: pay out the co-op
While seeking a mutually agreeable resolution, the following guidelines should be used:
a) Where the remuneration is paid in stages, each stage shall be treated as though it is an independent transaction;
b) The Listing Brokerage shall provide to the Co-operating Brokerage a copy of all information available to demonstrate that due diligence was performed by the Listing Brokerage and their Broker/Salesperson, to ensure there will be sufficient funds from the transaction to pay the remuneration in accordance with the MLS® Listing on closing; and
Bill or account to Seller and/or Seller’s lawyer for the shortfall, after application of the deposit amount
c) The Listing Brokerage shall provide to the Co-operating Brokerage a summary of any and all supporting documentation or reasons as to why there is a remuneration shortfall.
In the event the Listing Brokerage fails to commence such legal action or pay such amount within such time, or, having commenced legal action within such time fails to continue or to diligently pursue such claim, settlement and/or collection, the Cooperating Brokerage shall have the right to do so. Upon receipt of a written notice from the Co-operating Brokerage of its intent to exercise its rights herein, the Listing Brokerage shall assign its rights under the Listing Agreement and shall co-operate fully, but at the expense of the Co-operating Brokerage, to make available to the Co-operating Brokerage all pertinent information and witnesses under the Listing Brokerage’s control and to make such other assignments and take such other steps as in the opinion of counsel for the Co-operating Brokerage are necessary to enable the Co-operating Brokerage to pursue such claim, settlement and/or collection against the Seller.
Failure by Listing Brokerage to collect
Co-op sends notice
Listing Brokerage assigns all rights to Co-op
Co-op pays own legal fees
In such event, any losses or costs incurred by the Co-operating Brokerage in pursuing such claim, settlement and/or collection against the Seller shall be the sole responsibility of the Co-operating Brokerage, and the Listing Brokerage waives any and all rights to any monies collected by the Co-operating Brokerage, which shall have the right to all monies collected even if greater than the sum of its costs and its share of the full remuneration.
Co-op gets all moneys, including Listing Brokerage’s share
In the event Brokerages are unable to reach a mutual agreement and neither party has commenced legal action against the Seller, the matter may be referred to the Association’s arbitration committee as applicable.
Arbitration still available, if no lawsuit
7.07 At the same time as an Offer for a Transaction procured by a Co-operating Brokerage is accepted, the Listing Brokerage shall execute and deliver to the Co-operating Brokerage a Remuneration Trust Agreement for the Transaction.
Deliver: RTA, Remuneration Trust Agreement
7.08 The beneficiaries of the Remuneration Trust Agreement shall be the Co-operating Brokerage to the extent of the Remuneration Trust Amount, and the Listing Brokerage as to the balance after payment of the Remuneration Trust Amount.
Co-op gets money first, then Listing Brokerage
7.09 Following the completion of the transaction, no funds shall be transferred or paid to or for the benefit of the Listing Brokerage or any third party until the Remuneration Trust Amount has been disbursed to the Co-operating Brokerage.
On completion of transaction co-op gets paid first
7.10 Where the Remuneration Trust Agreement is separate from the Confirmation of Cooperation and Representation, the Listing Brokerage and Co-operating Brokerage shall each retain a copy of any Remuneration Trust Agreement for a period of no less than six (6) months following the completion of the Transaction and shall provide the Association with a copy of any such Remuneration Trust Agreement in accordance with Article 2.05, provided the Association has received a written complaint necessitating the requisition of said Remuneration Trust Agreement.
Listing Brokerage to retain RTA for 6 months
CCR can be the RTA
7.11 Where any remuneration is paid as a result of the holdover clause in the MLS® Listing Agreement, such compensation shall be paid as set out in this Article.
Holdover still in play, resets time periods
7.12 By submitting any MLS® Listing through the MLS® System, the Listing Brokerage shall be acting as principal and shall be deemed to be making an Offer as principal regarding remuneration to all Members.
MLS listing itself is offer of compensation
PropTx MLS® Rules
EFFECTIVE DECEMBER 2, 2024
Brian Madigan LL.B., Broker