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Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

December 5th - 2007

LEGALBEAT: Two listings, two commissions

The mortgagee started a British Columbia foreclosure action and the court ordered that the property was to be sold.

The mortgagee started a British Columbia foreclosure action and the court ordered that the property was to be sold. The mortgagee was given conduct of the sale and signed an exclusive listing agreement with Colliers. The owner/mortgagor then signed a listing agreement with Sutton without the knowledge of the mortgagee or Colliers.
 
Colliers marketed the property and obtained an offer for $1.4 million which was taken to the court for approval. The owner/mortgagor said that he had a better offer of $1.52 million which was rejected by the court. An appeal court allowed that transaction and ordered that commission be agreed to or subject to a further court order. The owner/mortgagor signed an agreement to pay Sutton $81,230. Colliers applied for a court order to be paid commission based on the original court order and listing. The judge held that the commission to Colliers was a reasonable and proper expense chargeable against the mortgagor. The owner/mortgagor then argued that the commission to Sutton should not be payable as their listing was obtained under duress and in breach of fiduciary duty. Those and other issues must be dealt with in subsequent proceedings.

Fisgard Capital Corporation v. Dodd 2006 BCSC 1228 (CanLII)

MERV'S COMMENTS
It is not unusual to have two listings in force at the same time. REALTORS® should be aware of the mortgage remedy processes in their province and be able to explain to clients how they may impact them and that in some situations there could be two commissions payable in one transaction. It might have been better for everyone if Sutton and Colliers had come to some agreement to co-operate in their dealings with this commercial property and share one commission.

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Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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