Agent oversight costs $7,000 commission

by Olivia D'Orazio12 Mar 2015
The results of a recently appealed court case in Ontario is underscoring the necessity of having your clients sign a buyer representation agreement, after one agent was shut out of a $7,000 commission cheque.

“Apart from making general enquiries about the plaza, [the agent] did introduce [the buyers] to the property as a result of the ad that she had placed in the magazine and also providing them with the address of the property,” the judge wrote in official court documents. “[The agent] neglected, however, to obtain a signed buyer representation agreement from them. Nor did she advise [the selling agent] prior to the closing of the transaction, that she was acting for the purchasers.”

The agent, Balwindre Kaur, eventually lost out on a $7,000 commission cheque – solely because of her oversight in not getting the buyers to sign an agreement.

Balwinder Kaur, an agent for Realty Canada, posted an advertisement soliciting buyers for a retail property that was listed by Gurdeep Singh Sandhu, the owner of Remax Realty Specialists. Via the ad, Kaur was contacted by an interested buyer named Shoiab Akhtar.

Kaur claims she and Akhtar were parties to an oral agreement that recognized Kaur as the representing agent. Kaur solicited more information about the property from Sandhu, which he sent to her. Kaur then forwarded this emailed information to Akhtar. Kaur also advised Akhtar as to an appropriate offer price.

However, when Kaur prepared an agreement of purchase and sale, and a buyer representation agreement, Akhtar said he already put an offer on the property.

As it turns out, Akhtar contacted Sandhu, who took him around the property, advised him on the sale of the property, evaluated the property’s value and the business behind it – all after having Akhtar sign a Buyer Representation Agreement.

The courts originally ruled in favour of Kaur, but upon appeal, found Sandhu earned his $7,192.50, independent of whatever nominal work Kaur had put into the sale.

But, the courts did acknowledge a few points. First, it said there was some issue with regards to whether or not Kaur could have advertised for the property, for which she was not the listing agent. The court also said it was unclear whether or not Akhtar would have signed an agreement with Kaur had she asked him to.

The lesson for agents is simple: always get your buyer clients to sign an agreement!

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