Expired Listing Purchased by Person Previously Shown Property by Licensee #54
CATEGORY: Legally Speaking
TAGS: Listing Contract Multiple Listing Service (MLS®) Vancouver Island Real Estate Board (VIREB)
By Gerry Neely
There is probably no more frustrating experience for a licensee than to discover that after the listing had expired, a person who had been shown the property by the licensee, had purchased it. So when a Block Bros. salesman found that an agreement had been signed on February 3rd 1981 between his principal and the purchaser with whom the licensee had discussed the details of the property, the licensee sued upon two listing contracts that had expired on November 30th 1980. One was a Block Bros. exclusive, while the other was the MLS® listing contract of the Vancouver Island Real Estate Board, a contract which was signed about a month after the Block Bros. exclusive had been in force.
During the period of the listing, the licensee had three or four meetings with the ultimate purchaser, gave to him a brochure of pertinent information and discussed the subdivision of the property to create a lot, the sale of which would offset the purchaser's initial cost. The purchaser was familiar with the property so no examination of the property on it took place. No meetings between the vendor and the prospective purchaser occurred and discussions broke off when the prospective purchaser said he could not afford to buy the property.
A good deal of argument at the trial must have dealt with the question of whether Block Bros. was entitled to choose to sue on the listing contract that suited it best, or whether the two listing contracts formed one agreement, or whether the MLS® contract superseded the Block Bros. exclusive agreement. There were differences between the two listing contracts, as to the circumstances under which liability for a commission arose. In the Block Bros. exclusive contract, a vendor was liable for commission in the event of a sale of the property at any time during the term of the listing contract or any time thereafter to a purchaser "found or introduced to the property during the term of this exclusive agency." The MLS® contract provided for payment of a commission in the event of a sale during the listing or within 170 days of the expiration of the listing contract, to a purchaser "introduced to me/us or shown the said property during the aforesaid period on the other hand."
The Judge held that the MLS® contract replaced the exclusive Block Bros. agreement. The significance of this for the licensee was that the vendors denied having received a copy of the MLS contract. The vendors had in their possession, copies of five other listing contracts involving not only the property which was the subject matter of the claim for commission, but two other pieces of property. The vendors appeared to the Judge to be very careful about keeping and storing documents and the licensee was unable to state positively that he had given a copy of the MLS® contract to the vendors although he testified that was his practice. The Judge did not accept the argument that the acknowledgment which was part of the printed form of the agreement, of the vendors receipt of a copy, was conclusive. He did suggest that had a separate receipt been signed, that would have been "very strong evidence of delivery of a copy." Delivery of a copy was particularly important to the vendors who were entitled to know the date when the listing expired and the period of 170 days commenced. Section 46 not having been complied with the agreement to pay a commission was invalid and no commission was payable under the MLS® contract.
As a secondary point, the Judge also said that the licensee would not have been entitled to a commission because he had neither introduced the purchaser to the vendor, or shown the property as required by the terms of the MLS® contract. It is true that on the former ground the licensee could not have succeeded, but denying a commission on the second ground involves a very narrow interpretation of the conduct required to show a property. The reasoning in the case is not helpful to decide what conduct would have been sufficient to satisfy the second ground.
The case is being appealed to that the decision of the Trial judge may be reversed. However, it is a useful reminder of the necessity of being able to prove that the principal (and if more than one, each principal) received a copy of the exclusive listing immediately after its execution. A separate receipt or a letter to the principal confirming delivery of the copy may be necessary.
|Block Bros. Realty Ltd. v. Monsieurs,CC Van. Is. 1984 B.C.D. Civil 3784-01-06.
To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.
What we do
Popular tags within Legally Speaking
Popular posts from BCREA
Housing Market Update – February 2024Feb 16, 2024
Mortgage Rate ForecastDec 13, 2023