Humber/Ontario Real Estate Course 3 Exam Practice

If Seller Alvarez relisted her property after the original listing expired and it was sold through the new brokerage, is remuneration owed to the original brokerage ABC Realty Inc.?

1. Yes, ABC Realty Inc. is owed 2.5% as the co-operating brokerage, since the property was introduced during its listing period.

2. No, because holdover provisions do not apply if the property is relisted with another brokerage.

3. No, ABC Realty is not owed remuneration because the property was listed with another brokerage and the remuneration rate was higher than with ABC Realty Inc.

4. Yes, the holdover provision applies and ABC Realty Inc. is owed a remuneration rate of 5% because the property was introduced during the currency of that brokerage's listing.

5. Yes, but only if the new listing agreement mentions ABC Realty Inc.

6. No, as the holdover period was already expired.

The correct answer is: No, ABC Realty is not owed remuneration because the property was listed with another brokerage and the remuneration rate was higher than with ABC Realty Inc.

In this scenario, the holdover provisions of the listing agreement are essential to determining whether ABC Realty Inc. is owed remuneration after Alvarez’s property was relisted. Generally, holdover provisions are designed to protect the brokerage's commission rights for a certain period after a listing expires, assuming the property sells to someone introduced to it during the original listing period. The correct answer indicates that remuneration is not owed to ABC Realty because the property was listed with a different brokerage and the new remuneration rate set by that brokerage was higher. This emphasizes that the terms of remuneration can vary between agreements, and once a property is relisted under a new agreement with a different brokerage, the original brokerage typically loses their claim to remuneration, especially if no terms covering the holdover period apply. Understanding the nuances of real estate commission structures, including how holdover provisions operate and how they can be changed or voided by a new listing, is crucial for agents and brokerages in their dealings. This context clarifies that unless explicitly stated otherwise, agents from a new brokerage starting a new agreement are entitled to any commissions on a sale that doesn't fall under the original brokerage's holdover rights.