April 3rd - 2012

Legal Beat: Trans-Atlantic meeting leads to lawsuit

The original meeting took place in England, where an Ontario real estate professional was participating in an emigration fair.

The original meeting took place in England, where an Ontario real estate professional was participating in an emigration fair. While there, she met a British couple interested in moving to Canada and buying a home in Ontario.

Some time later, the couple visited the province and met with the same REALTOR®. They signed a Buyer Representation Agreement (BRA) with her brokerage for any property in Ontario that they might buy. During their visit, they saw a house in Oakville that they liked and signed all documents relative to an offer on that property.

The first offer did not work out. However, the husband and wife later saw another property near Newmarket that they liked, which they discovered with the help of another registrant in that area. Asked whether they had signed a BRA with anyone else, the couple replied that they had worked with another individual, but that she was located in the Oakville area. The couple signed a BRA with the second registrant and bought a home in Newmarket.

After learning of the sale, the first REALTOR® sued for her commission. She stated in court that she had explained all documents to the buyers. The couple in turn argued that the word "Ontario" had been pre-typed on the form. They stated that they did not realize the agreement obligated them to work with the first brokerage’s representative on any property anywhere in the province.

The judge ruled in favour of the buyers. He ruled that under these circumstances, the word "Ontario" was too broad a location and the agreement was therefore unenforceable. He decided that although the first REALTOR® was knowledgeable about the market in the western Greater Toronto Area, "to claim to have the type of local knowledge necessary to represent buyers across all of Ontario is difficult for this court to accept."

In his findings, the judge stated that the jurisdictional portion of the BRA was not fully or properly explained to the buyers despite evidence from the first REALTOR® that she had done so.

Re/Max v Odulami, Ontario Small Claims Court

MERV'S COMMENTS
Situations may arise where you could indeed represent a buyer anywhere in the province. Many commercial REALTORS® do so. However, you should be prepared to convince a judge of your willingness to travel hundreds of miles to represent that client and that you are familiar with the markets in question.

Is it better to fill in the blanks in these forms in front of the clients or to have them pre-typed? Whatever your process is, make sure you explain the documents fully to your clients and ensure that they understand them completely.

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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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