Would you Give a Power of Attorney to a Listing Brokerage?

Well, in Ontario, hundreds of thousands of people do every year. It’s not an unlimited Power of Attorney, it does have some restrictions and limitations.

Where is it?

It’s right there in the Listing Agreement. I hope you read it carefully. Most jurisdictions in North American don’t have anything like it, but, Ontario does.

Here’s the clause:

“10. VERIFICATION OF INFORMATION: The Seller authorizes the Listing Brokerage to obtain any information affecting the Property from any regulatory authorities, governments, mortgagees or others and the Seller agrees to execute and deliver such further authorizations in this regard as may be reasonably required. The Seller hereby appoints the Listing Brokerage or the Listing Brokerage’s authorized representative as the Seller’s attorney to execute such documentation as may be necessary to effect obtaining any information as aforesaid. The Seller hereby authorizes, instructs and directs the above noted regulatory authorities, governments, mortgagees or others to release any and all information to the Listing Brokerage.”

OK, let’s break in apart, so that we can go through this line by line.

“10. VERIFICATION OF INFORMATION:

The Seller authorizes the Listing Brokerage

to obtain any information affecting the Property

from any regulatory authorities, governments, mortgagees or others and

the Seller agrees to execute and deliver such further authorizations in this regard

as may be reasonably required.

The Seller hereby appoints the Listing Brokerage or the Listing Brokerage’s authorized representative

as the Seller’s attorney

to execute such documentation as may be necessary to effect obtaining any information as aforesaid.

The Seller hereby authorizes, instructs and directs the above noted regulatory authorities, governments, mortgagees or others

to release any and all information to the Listing Brokerage.”

COMMENT

So, there it was, right there in front of you, all this time!”

“as the Seller’s attorney”

If you are a Seller, I hope you read that. If you are a Listing agent, I hope you explained that. Remember, you are supposed to explain the documents and secure the Seller’s “informed consent”, BEFORE having the Seller execute the document.

Wouldn’t most people like to know that they are granting a Power of Attorney ahead of time?

Actually, some builders will include a similar clause in their own documents, so, it’s not entirely surprising in a commercial context.

It’s important to explain this. If the Seller doesn’t wish to execute this “limited” Power of Attorney, they can always strike it out. That would then place them in the same position as most Sellers who execute Listing Agreements in North America.

Now, what happens if you didn’t explain it?

Let’s assume you are heading to Court to collect your commission. Can you prove that you explained it? Did you explain this part? It’s not good to hear about this clause for the first time while being cross-examined in Court. It will just make you look like you failed to explain this document in detail. And, that could certainly be troublesome!

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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