Real Estate Lawyers Kenora, Ontario

Maybe. Your buyers representation agreement (BRA) has an expiry date, usually three to six months. During that time, you are responsible for paying the brokerage if you sell a home or land you contracted a real estate agent to market for you. 

You can cancel by mutual consent with your agent (provided the contract stipulates that), or wait for the contract to expire. In lieu of cancelling, most brokerages will offer to assign a new agent to your account, and carry on marketing your home. 

We say maybe because while cancelling the contract or allowing it to expire doesn’t cost you anything, it doesn’t always end your legal obligations. Most BRAs have a holdover clause. That allows the brokerage to claim their commission if the property is sold by a new realtor to someone who viewed it while the previous brokerage represented you.

As long as a real estate agent puts in any effort on your behalf, you may be forced to pay their  commission, even without a signed BRA.

A recent Ontario Superior Court of Justice decision (Homelife Maple Realty et al v Singh et al, 2021 ONSC 4743) shows why. The lack of a signed BRA was deemed irrelevant because of the amount of work a real estate agent did to try to match two brothers and their spouses to the acreage they desired.

A BRA was drafted, but not yet signed when the first offer was made in spring 2014. That, and several other offers and counter offers, were rejected. By fall 2014, the brothers had decided to take a break.

But in spring 2015, the acreage came back on the market. This time, the brothers made an offer directly to the seller’s real estate agent. That offer was accepted, and the seller’s agent was paid a commission. 

When their initial real estate agent discovered the sale, he complained to the court that the brothers had been unjustly enriched. The court found the brothers had continued using his services despite not signing the draft BRA, and used the money they saved by not paying his commission to improve their offer to the seller. 

The agent’s expectation of being compensated was reasonable, the court ruled. The brothers were ordered to pay the agent, and negotiate a settlement for court costs.

The buyer could ask your lawyer for compensation if the delay is very inconvenient. For example, if they paid a mover to arrive at an agreed-upon time, and have to put their goods in storage. You might also be asked for hotel and meal expenses if the delay leaves the buyer without a place to stay. 

Technically, you have breached the sales contract if you don’t move out on time. Realistically, many sellers delay leaving until the day the sale concludes, which is when their lawyer receives final payment for their home. The agreement of purchase and sale usually specifies the time by which you must provide vacant possession to honour the agreement. That’s typically 6 p.m. on closing day. 

Your timeline could depend on how organized you are, and your own plans. If you are buying and selling the same day, you may encounter similar move-in delays. Regardless, be clear with the buyer if it’s unlikely you will be out of the home by or before the specified time.

Something to think about: any delay by a mortgage lender, or lawyers handling the transaction, can result in the sale not being completed the same day as stated in the agreement. Ontario land registry offices only accept registrations until 5 p.m. daily, and are closed on weekends and statutory holidays. If the sale concludes when the local land registry office is closed, it will be “in escrow”, meaning the property title and funds have yet to change hands.

While it’s unlikely you’ll be inspired to walk away at that stage, a real estate deal is not over until it’s done. You and your lawyer should refrain from handing over the keys until it is. 

You can decline any request you consider unreasonable, but it could be in your best interests to agree.

A pre-closing inspection allows the buyer to verify your home is in the condition they expect. If the buyer has any lingering doubts about your home, now is the time to tackle issues head on. 

Your buyer may want to confirm appliances are intact and operating, or your home hasn’t suffered any weather damage or been vandalized. They may want to ensure you haven’t removed fixtures like chandeliers included in the agreement of purchase and sale, or chattels like that tool shed they asked you to include.

If you committed to making repairs, the visit gives your buyer a last chance to inspect if the work is done to their satisfaction. They may even bring a professional home inspector along with their real estate agent. Yours should attend as well.