Suspensions, Extensions to Listing Agreements and Informed Consent

Understanding Your Listing Agreement

Question:

Assuming that everyone explains the holdover clause at the outset, what would you do in the following situation?

The Seller agrees to try listing in the late Fall. It doesn’t work out. So, it’s pulled off the market. Cleverly, the Listing Agent persuades the Seller to agree to a Suspension (over a Cancellation) and therefore a long extension of the Listing is now required.

1) Should this Listing Agent explain the HOLDOVER provision once again when both these documents are signed?

2) Should the Agent also explain the REFERRAL clause and its operation over the next 5 months of no activity?

Answer:

The Suspension and the Extension have a serious and important impact.

The Agent is obligated to act in the best interests of the client. This appears to be acting solely in the Agent’s self -interest. That is against the principle of best interests, good faith and loyalty as well as accounting.

An explanation is required.

In this situation, there is no benefit to the Client. The Agent isn’t doing anything in respect to which a reward should follow.

Brian Madigan LL.B., Broker

www.ontarioRealEstateSource.com

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