Role of the Mutual Release in Ontario

Question:

Do you always have to get a mutual release signed? I had a deal without a deposit.

Answer:

One of the primary difficulties associated with the mutual release is that it is used when one party is in breach of contract and the other party has certain rights that they are about to “sign away”. If you are practicing law or your client has received legal advice on the matter, then go ahead with the mutual release.

The problem is that the rights which accrued to the parties arose under several different legal doctrines: contract law, tort law, and the law of restitution. The OREA education program only dealt with contract law and did not address rights associated with the breach of contract and the implications. They were not covered in Course 2, Course 3, Law or the Brokers Course offered by OREA. I am not sure what the situation is now with Humber. You might have come across something in a continuing education program.

So, you need to be sure about the “advice” that you are providing to your clients, either to sign or not to sign the mutual release in a breached deal.

I raise this now, because I have two cases from the Spring market in 2017 where Sellers were told that they had to sign a mutual release in order to put their properties back on the MLS system. This isn’t true. Now, they are suing their real estate agents for this false information.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

Leave a Reply

Your email address will not be published.