The transaction related to a shopping plaza which included a gas
station and convenience store. The property was listed by
An agent for Realty Canada Inc. ("Realty") had placed
an advertisement about the plaza in the Business Exchange magazine.
As a result of the advertisement, the agent received a telephone
call from a potentially interested buyer. This potential buyer
visited the plaza and made a number of inquiries of the agent, who
in turn contacted Remax and obtained information from Remax for the
The agent at Realty gave evidence at trial that she had come to
an oral agreement with the potential buyer to represent him as his
agent. However, the agent at Realty never had the potential buyer
sign a Buyer Representation Agreement.
Within 5 days of having first contacted the agent at Realty, the
potential buyer contacted the Remax listing agent directly. The
Remax agent asked the buyer whether he was being represented by
another agent. The buyer stated that he was not. The Remax
agent had the buyer sign a Buyer Representation Agreement and
proceed to discuss terms with the vendor, prepare the offer,
negotiate the price and closing date and carry out all due
diligence work with the potential buyer.
About two months after the closing, the agent at Realty
contacted the Remax agent and indicated that she was representing
The trial judge found that the Realty agent performed services
that benefited the buyer and ordered the Remax agent to share the
commission with the Realty agent as co-operating broker. On appeal,
the Divisional Court reversed the decision and allowed Remax to
keep the full 10% commission.
The Divisional Court noted that although the Realty agent did
introduce the buyer to the property, the Realty agent failed to
obtain a signed Buyers Representation Agreement from the purchaser
and failed to advise Remax prior to the closing that she was acting
for the purchaser.
The Divisional Court noted that the Realty agent may have a
separate claim against the purchaser but that the Remax agent
earned his co-operating broker's share of the commission
because of his own work independent from Realty's.
Whether the buyer would have ever agreed to sign a Buyers
Representation Agreement with Realty, if asked, is unknown.
However, the case illustrates how costly it can be for agents to
rely on oral agreements and to not have a potential buyer commit to
a Buyers Representation Agreement early on, and certainly before
the agent begins performing services for the potential buyer.
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Russell v. Township of Georgian Bay provides a useful reminder of the fact that while municipal officials sometimes appear to hold all of the cards in disputes with home owners, that is not always the case.
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