I am upset with myself for not coming across Duhaime.org sooner.  What a great legal resource!

In a nutshell, Duhaime.org is an entertaining and comprehensive legal dictionary website.  Started by Victoria, B.C. lawyer Lloyd Duhaime, as a bulletin board in Ottawa (1993-1994), Duhaime.org has grown into a very popular go-to place to find out about legal terms, Canadian legal history, legal Latin terms, crazy laws, and more.  The website has been hailed as (among other things):

• “One of the best legal dictionaries on the Web”: Forbes.com (2008);
• “…a great resource for improving your general understanding of Canadian law”: about.com (2009); and
• “a dictionary translating legalese into plain English”: Monday Magazine (1999).

On a more personal nature, Lloyd is an avid lawyer, writer, NHL- nut, jogger, goalie, and self-proclaimed renegade.  He keeps electric guitars in his office and wants to give the legal system ‘back to the people’ through simplification, transparency, accountability, and access.

He’s also a social entrepreneur.  Apart from Duhaime.org, in 1987, Lloyd started a company that faxed legal precedents to lawyers across Canada.  He duplicated judge’s decisions (from law reports), removed footnotes and summaries (what he considered to be copyrighted materials), and sent the rest.  He was ultimately threatened with copyright infringement from legal publishers and had to shut down the business.  He argued, however, that judges own their own copyright, not legal publishers.  Source: “Accessing Justice: Many People Go to Court and Come Away Poor and Frustrated” (September1999), Monday Magazine, p. 8.

Today, many judicial decisions are free for the public to access, courtesy of canlii.org.

Lloyd is a big proponent of access to justice through the technology. He has written countless guides and primers on Canadian law (e.g. how to write a contract, Affidavits: the How To Guide, and much more!).  He’s also a fun and entertaining writer.  I particularly like (and I think many other people do too!) the section in his website called “Law Fun“, where you’ll find Crazy Laws – American Style and Dumb, Crazy or Stupid Laws Around the World.

There’s just way too much to write about Lloyd and Duhaime.org.  I would highly recommend the website and encourage you all to check it out (p.s. it’s regularly updated!).

I smell another profile report coming up…

written by admin \\ tags: canadian legal history, canlii, copyright infringement, crazy laws, duhaime.org, electric guitars, how to write a contract, judicial decisions, latin terms, lawyer lloyd duhaime, legal dictionaries, legal dictionary, legal precedents, legal publishers, legal resource, legalese, lloyd duhaime, monday magazine, personal nature, plain english, social entrepreneur

Please keep in mind that this is not legal advice.  The information provided herein is for educational purposes only. If you would like to get in touch with a lawyer to help you draft, interpret, negotiate or resolve a dispute about a shareholder agreement or unanimous shareholder agreement, then you are encouraged to seek a professional (e.g. make a post on Dynamic Lawyers).  We have Ontario lawyers who can assist you in this regard (I would know, I’m one of them!). If you’d like, you can contact me directly.

As a follow up to some previous blogs I had written a few months about about unanimous shareholder agreements  – an introduction and a basic template – I though it would be worthwhile to discuss some of the nuances involved in drafting one of these agreements.  Specifically, I’ll be talking about non-competition clauses, dispute resolution clauses, and the general terms that are typically found in a unanimous shareholders agreement.

Non-Compete Clauses
I’ve previously discussed non-compete clauses and agreements generally (an introduction, the justification test in Ontario, and being too vague to enforce).  With respect to shareholder agreements, it’s typical to find a non-compete clause.  This clause will basically provide that each shareholder agrees with the other shareholders and the corporation not to compete (directly, indirectly, alone, in partnership, etc.) for a set period of time – namely, during the term of the Shareholder Agreement (i.e. until it is terminated) or until the Shareholder ceases to be a Shareholder and for a number of months or years thereafter.  “Competing” is generally defined to include carrying on business that is competitive with the corporation’s Business (a defined term in the Shareholder Agreement), soliciting the Corporation’s stakeholders (e.g. employees, suppliers, customers, etc.), and doing anything that would negative impact and affect the Business of the Corporation.

Dispute Resolution Clauses
If you want to avoid the cost, time, headache, and uncertainty of litigating disputes in respect of the Shareholder Agreement, you might want to include a dispute resolution clause.  These clauses can say something like: the parties agree that any and all disputes and questions that arise between any of the parties in connection with the Shareholder Agreement (or construction or interpretation or application thereof), any section of the Shareholder Agreement, or any document, act, omission, etc. related to the Shareholder Agreement shall be resolved by mediation or arbitration (or perhaps mediation fist, and then arbitration).  In either case, you should specify how many mediator(s) and arbitrator(s) will be appointed, who will pay for them, where the mediation or arbitration will be held, how the procedure will be determined (by the parties or by the mediator or arbitrator?) and whether an appeal is available from the decision of the arbitrator (mediator decisions are generally non-binding).

General Terms
Here are some of the general terms that I’ve typically found in Shareholder Agreements (and other agreements for that matter):

• Notice (how do the parties give notice under the agreement for things like termination).
• Further Assurance (sometimes, you need the parties to the agreement to give additional representations and warranties such that they say they have all the requisite power and authority to do everything they’ve promised to do under the Agreement and that they will do those things as promised).
• Assignment (e.g. is this to be done by the parties having to consent in writing?).
• Survival of terms (i.e. if a term is found by a court to be void, should the rest of the agreement survive?).
• Governing Law (which jurisdiction governs the interpretation and enforcement of the agreement?).
• Amendment (how is this to be done?).
• Entire Agreement (i.e. this agreement supersedes all other agreements – whether oral or written – relating to the same subject matters in the agreement)
• Waiver (e.g. no failure or delay of a party to enforce or exercise its rights under the agreement constitutes a waiver, etc.).
• Interpretation (singular vs. plural; masculine vs. feminine, section headings, etc.)
• Power of Attorney (shareholders sometimes require that, if any shareholder neglects or refuses or is unable to execute or deliver any document required to be delivered, then they shall be deemed to have appointed the Corporation as his or her lawyer attorney and agent for such purposes).
• Independent Legal Advice (an acknowledgment by the parties that they have been told to and have received independent legal advice concerning the nature and substance of the Shareholder Agreement).
• Severability (in case one provision is struck down and rendered invalid doesn’t mean the rest of the agreement is).
• Currency (in which currency do dollar amounts referenced in the Shareholder Agreement pertain to?).

written by admin \\ tags: dispute resolution, educational purposes, legal advice, negative impact, non compete clause, non compete clauses, nuances, shareholder agreement, shareholder agreements, unanimous shareholders agreement

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing Status Certificates in the context of buying a condo unit.

What are they?
When a buyer makes an offer to purchase a condo unit, they will typically include a provision for the seller to provide something called a “Status Certificate”.  This is a current report about the status of the condominium corporation generally and the unit specifically.

What’s included in a Status Certificate?
Under s. 76 of the Condominium Act, 1998, a condominium corporation must give to each person who requests it a status certificate in a prescribed form that specifies the date on which it was made and which contains (among other things):

• a statement of the common expenses – including arrears and increases – for the unit;
• assessments made by the board to increase the contribution to the reserve fund and the reason for the assessments;
• the address for service of the corporation;
• the names and address for service of the directors and officers of the corporation;
• a copy of the current declaration, by-laws and rules;
• a statement of all outstanding judgments against the corporation and the status of all legal actions to which the corporation is a party;
• etc.

Under s. 15 of the Regulations, condominium corporations are required to keep copies of the status certificates that it issues under s. 76 of the Act for a period of 10 years.

What’s the benefit of having the Status Certificate?
Basically, the status certificate provides valuable insight into the financial and governance health of the condominium corporation.  It can tell you trends in the receipt and expenditure of funds, the current year’s budget, the last annual audited financial statements and the auditor’s report on the statements, and the amount of the reserve funds available.  It also tells you about legal proceedings and claims made against the condominium corporation.  Finally, by examining the corporate governance documents (e.g. by-laws, director meeting minutes, rules, etc.), you’ll have a better glimpse into the inner workings (and challenges) faced by the corporation’s board of the directors.  The corporation has an obligation, within a reasonable time, to provide copies of the agreements to a person examining them, if the person so requests and pays a reasonable photocopy and administration fee to the condominium corporation.

How much does it cost?
Pursuant to the Act and the Regulations, a condominium corporation can charge the person making the request for a Status Certificate up to $100, inclusive of all applicable taxes: s. 18(1) of the Regulations.

What Form Does it Take?
Status Certificates must be in prepared using Form 13 under the Regulations.

Sample Clause in Offer
Here’s an example of a Status Certificate that I’ve come across:

“This Offer is conditional upon the Buyer’s Lawyer reviewing the Status Certificate and Attachments and finding the Status Certificate and Attachments satisfactory in the Buyer’s Lawyer’s sole and absolute discretion. The Seller agrees to request, at the Seller’s expense, the Status Certificate and Attachments within 10 days after acceptance of this Offer. Unless the buyer gives notice in writing to the Seller not later than 11:59p.m. on the third day [Excluding Saturdays, Sundays and Statutory Holidays] following receipt by the Buyer of the Status Certificate and attachments, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.”

Remember: if you’d like a lawyer to review the Status Certificate and advise you on the inner workings and financial status of the condominium corporation’s progress, make a post on Dynamic Lawyers.

written by admin \\ tags: arrears, brampton, condo unit, condominium act 1998, condominium corporation, condominium corporations, current report, educational purposes, legal actions, legal advice, mississauga, ontario real estate, professional assistance, real estate lawyers, renting real estate, status certificates

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing title insurance – what it is, how to get it, whether it’s mandatory, etc.

What is Title Insurance?
Title means legal ownership.  So title insurance is a policy you purchase (typically one-time fee) in order to protect the title of your property as against you (as purchaser and perhaps borrower) and your lender (if applicable).

Is it Mandatory in Ontario?
Nope. But it’s a very good decision to pay the few hundred bucks to get it (it typically ranges in the GTA from $200-$300).  It can help protect against unknown title defects , encroachments, title fraud, errors in surveys, existing liens against the property’s title (e.g. construction liens, property taxes, unpaid debts from utilities, etc).  You should refer to the terms and conditions of your particular title insurance policy to determine exactly what it covers!

What should I be aware of with respect to my title insurance policy?
You should be aware of the following things when considering what kind of title insurance policy to purchase:

1. What types of losses does the policy cover?
2. Will the policy cover legal expenses relating to restoring title?
3. How long will the policy last?
4. Who is the designated beneficiary under the policy?
5. Possible exclusions and exceptions to the policy (e.g. known title defects, environmental hazards, aboriginal land claims, zoning by-law violations, etc.)

You should contact a lawyer or insurance agent/broker to determine whether or not you should purchase title insurance and what kind of title insurance, if any, you need.

written by admin \\ tags: aboriginal land claims, brampton, construction liens, environmental hazards, exclusions, insurance agent, legal expenses, mississauga, ontario real estate, professional assistance, property taxes, purchase title insurance, real estate lawyers, real estate toronto lawyer, renting real estate, time fee, title insurance, title insurance policy, unknown title, unpaid debts, zoning by law

Dynamic Lawyers is looking for a GTA real estate lawyer to respond to a new post (i.e. someone is looking for a GTA/Toronto real estate lawyer to help them with: assignments, double closings, lease option/sandwich lease options).  Here is the public post. If you are or know a GTA/Toronto real estate lawyer who does this type of work, please give me a shout at michael@dynamiclawyers.com or sign up here.  Remember: Dynamic Lawyers is currently having a 1 month free trial period for new lawyers who sign up today.  There’s no risk and no obligations!  What are you waiting for?  Register today!

written by admin \\ tags: free trial period, lawyers, lease option, lease options, real estate lawyer, sandwich, toronto real estate

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing property or land surveys.

A survey is a detailed drawing of a property, as seen from above the property.  It includes measurements of the land and building thereon, including their boundaries.  Things included in the survey are: fences, buildings, roads, bodies of water (if any), etc.

Importantly, surveys can show easements, which are rights of way in favour of third parties and which are legally enforceable.

Surveys are prepared by individuals who are licensed with the Association of Ontario Land Surveyors (they are the only ones who can prepare surveys under s. 2 of the Surveys Act).  Surveyors are governed by the Ontario Surveyors Act (which deals with matters such as membership in the Association, satisfying standards of practice, complying with a  code of ethics, maintaining liability insurance, etc).  A valid surveyor’s report must bear the original signature and embossed seal of the surveyor preparing the report.

While title insurance no longer requires the need for up-to-date surveys, it’s still a good decision to spend a couple hundred bucks (assuming it’s a regular sized and simple property survey) as a safeguard of title.  Knowing where your property line starts and ends before purchasing your home protects you against future disputes with neighbours; title insurance only kicks in to deal with disputes once they arise.  Also, having a survey will tell you exactly what you’re getting, not what you think you’re getting or what the sellers are representing that you will be getting.  Peace of mind for a few hundred extra bucks may be worth it…

Worth mentioning is that, sometimes, financial institutions or financial lenders may require an updated survey (i.e. one that is less than 15 years old).

Finally, sometimes a buyer will include a clause in the Agreement of Purchase and Sale for the Seller to provide, if available, a survey to the buyer.   If you purchase a new home from a builder, it’s typical for the builder to provide a survey.

written by admin \\ tags: association of ontario land surveyors, bodies of water, code of ethics, couple hundred, land surveys, liability insurance, ontario land, ontario real estate, professional assistance, property survey, real estate lawyers, renting real estate, title insurance

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing home inspections.

Typically, in an Agreement to Purchase and Sale, the buyer will include a clause that says that the sale is conditional on a home inspection being completed and the report results being to their satisfaction.  It’s the buyer who typically bears the cost of the home inspection, which ranges from $300-$500 in the Greater Toronto Area.

The clause is worded in a way that forces the seller to grant access to the home inspector.

Here’s a home inspection clause that I came across:

“This offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s own expense and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion.  Unless the Buyer gives notice in writing delivered to the Seller within 5 (five) banking days after acceptance that this condition is fulfilled, this offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction.  The Seller agrees to cooperate in providing access to the property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller within the time period stated herein.”

When the home inspector arrives, he or she will examine the home, which includes:

• Mechanical Systems;
• Heating and Cooling Systems
• Plumbing Systems;
• Electrical Systems;
• Structure and Foundation;
• Major Appliances;
• Asbestos;
• Water Heaters;
• Lighting and Recepticals;
• Kitchen, Bath, and Laundry;
• Doors and Windows;
• Walls, Flooring, and Ceilings;
• Roofing, Chimneys and Drainage;
• Decks, Walkways, and Stairs;
• Basement and Crawlspaces; and
• General state of the home.

The home inspector should be registered with a reputable association of home inspectors and insured for errors and omissions liability.  They should also provide a written report with supporting evidence to back up their conclusions.  Finally, make sure to get an invoice from them that properly identifies their company and the services they performed.

Buyers are highly advised to tour around with the home inspector when they are doing their rounds.  This will give the buyer a first hand appreciation of what the home inspector is doing and what his conclusions will likely be.

The home inspection may take 2-4 hours, depending on the size of the home.

written by admin \\ tags: cost of home inspection, greater toronto area, heating and cooling systems, home inspection, home inspectors, plumbing systems, real estate lawyers, renting real estate

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be talking about the exclusivity clause in buyer representation agreements.

Taking a step back, a buyer representation agreement is the agreement which a Real Estate Salesperson wants their clients (a person looking to buy a home) to sign.  It can be signed at any time but it must definitely be signed before an offer is made: s. 14 of the Code of Ethics made under the Real Estate Business and Brokers Act, 2002. It gives the Real Estate Salesperson the exclusive authority for a set period of time to work on your behalf.  This protects the Real Estate Salesperson and helps to guarantee that they will get paid.

The standard OREA form that Real Estate Salespeople use includes an exclusivity clause.  This clause means that the principal (i.e. the client) gives the Salesperson the exclusive and irrevocable authority to act as their agent for a set period of time. The client will also represent and warrant in this agreement that they are not a party to another buyer representation agreement or similar agreement.

Sometimes, a buyer who signs this agreement will breach it by engaging another Realtor and concluding a deal through them. The problem here is that the buyer (1) had a buyer representation agreement with another Realtor and (2) may have lied to their present Realtor by indicating that they did not have such a deal.  The next thing the buyer realizes is that they are being sought after and perhaps even sued in small claims court by the original Realtor for the commissions that should have gone to them.

Problems can arise where a buyer and Realtor never sign a buyer representation agreement.  Take the case of Stoicevski v. Nelson, 2007 CarswellOnt 8606.  There, a buyer engaged Realtor “A” to look for properties on his behalf.  No buyer representation agreement was ever signed.  Realtor “A” identified numerous suitable properties, arranged inspections for the buyer, and made various offers on behalf of the buyer (which were never accepted).  Four of those failed offers were made in respect of one property and all of them were accompanied by a “Confirmation of Co-operating and Representation” agreement, which indicated that Realtor “A” would receive a commission if a deal went through. The buyer, looking to save some money, engaged Realtor “B” (who would accept a lower commission) to make an offer on his behalf for that property.  Using Realtor “B”, the buyer submitted an offer which was accepted. Realtor “A” then sued the buyer for lost commissions.  The Ontario Superior Court of Justice found that, even though no buyer representation agreement had been entered into between the buyer and Realtor “A”, the buyer was still liable to pay Realtor “A” the commission owed.  The Court reasoned that the buyer’s expectation to pay Realtor “A” commissions if a deal had gone through, coupled with the buyer’s actions – namely, working with Realtor “A” (both generally and specifically with respect to the property that was ultimately purchased) and then engaging Realtor “B” to save money – constituted an unjust enrichment. This case demonstrates that, in these circumstances, the absence of a buyer representation agreement may nevertheless make a buyer who engages multiple Realtors liable for commissions owed.

Overall, if a buyer is looking to get out a buyer representation agreement without the headache of litigation, they should get a written release of liability from the Realtor.  Assuming this release is obtained and entered into properly, it should prove to be a good defence in case litigation arises thereafter.

written by admin \\ tags: buyer representation agreement, code of ethics, exclusivity clause, irrevocable authority, ontario real estate, professional assistance, real estate lawyers, real estate salesperson, renting real estate, representation agreements, small claims court

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing some of the fiduciary duties imposed on real estate brokerages towards their clients.

Realtors have a fiduciary (special trust) relationship with their clients, which imposes various professional and ethical obligations on them. Among other things, Realtors must maintain proper records, not disclose confidential information, act competently and in good faith, and be loyal and obedient to their clients.  Acting in good faith requires Realtors to be honest, promote their client’s best interests, and disclose conflicts of interest – either real or perceived – to their clients.  Many of these fiduciary obligations are contained in the Act and the Code of Ethics.  Here are some of those fiduciary duties in greater detail:

Accounting
Real Estate Brokerages must:

• provide details of all funds held in trust and all monies handled on behalf of a principal (upon request); and
• maintain accurate bookkeeping.

Confidentiality
Real Estate Brokerages must:

• Maintain confidentiality and not disclose confidential information for any purpose (i.e. information which is likely to adversely affect the principal’s interests).

Competence
Real Estate Brokerages must:

• have sufficient knowledge, skills, and experiences to transact the real estate as required;
• exercise reasonable care to a standard expected of an average Brokerage; and
• undertake best efforts to avoid having the principal act on misrepresentations, mistakes, or fraud.

Good Faith
Real Estate Brokerages must:

• be honest and not take advantage of their principal;
• promote and protect the best interests of the principal;
• disclose any conflicting interests to the principal;
• disclose facts about the property which would be relevant to the principal’s decision in buying or selling the property; and
• disclose in writing to the principal if they are representing multiple parties.

Loyalty
Real Estate Brokerages must:

• place the interests of the principal above all else (except the law – which means they cannot help them commit a crime, for example);
• help to promote and protect the interests of the principal at all times and considering the bests interests of the principal; and
• disclose a conflict (actual or perceived) between their and the principal’s interests; and
• disclose in writing if they represent more than one principal to a transaction and must not act in that capacity unless they have the written consent of all principals (who have been fully informed).

Obdience
Real Estate Brokerages must:

• act pursuant to instructions received by their principals (irrespective of whether they agree or not).

Many of these fiduciary duties are found in sections 2-8 of the Code of Ethics, which Real Estate Brokerages are bound by and which are made pursuant to the Real Estate Business and Brokers Act, 2002.

Individuals with complaints against Real Estate Brokerages and Salespersons can take civil or criminal action against them (depending on the nature of the complaint) and can launch a complaint under the Act to the Real Estate Council of Ontario (“RECO“).  Part V of the Act deals with complaints, investigations, and disciplinary measures which can be taken by RECO.

Worth mentioning is that Realtors, as necessary members of the Canadian Real Estate Association (“CREA“), must abide by CREA’s Code of Ethics.  Among other things, that Code of Ethics requires Realtors to be committed to professional competent service, absolute honesty and integrity in business dealings, cooperation with and fairness to all, and personal accountability through compliance with CREA’s Standards of Business Practice. Discipline proceedings and penalties for violation of the Code of Ethics are established by local real estate boards.

written by admin \\ tags: confidentiality real estate, fiduciary duties, good faith, knowledge skills, misrepresentations, mississauga, ontario real estate, principal act, professional assistance, real estate brokerages, real estate lawyers, reasonable care, renting real estate

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only.   If you need legal advice with respect to buying, selling or renting real estate, you should seek professional assistance (e.g. make a post on Dynamic Lawyers).  We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario real estate lawyers registered to help you with your purchase, sale, and lease of real estate.

In this blog, I’ll be discussing typical commission structure of real estate salespersons.

Here’s how it works…

First off, the real estate agent representing the seller negotiates a commission that will be paid to 2 parties based on the selling price.  The 2 parties are the:

• Real Estate Brokerage representing the seller; and
• Real Estate Brokerage representing the buyer.

In Toronto, the typical overall commission that will be divided among these two parties ranges from 3.5% to 5% or even higher (it depends on many factors). So let’s take the following example.

Let’s say the overall commission is 5%. This is allocated as follows: 2% to the Real Estate Brokerage representing the seller and 3% to the Real Estate Brokerage representing the buyer (these allocations can vary).

Importantly, these percentages are further broken down between the respective Brokerages and their agents.  This may be a 75%:25% allocation in favour of the agent or a simple transaction fee (e.g. $300) that the agent must pay to the Brokerage.  So you can think of it like this:

For a $500,000 sale price, 2% can go to the Sellers (Brokerage and Real Estate Salespersons).  That’s $10,000 that will be split, for example, 75%:25%, which means that $7,500 will go the Real Estate Salespersons and $2,500 will go the Brokerage.

Going back to real estate commissions in general, there is no legal requirement that governs what percentages are appropriate.  So long as the Real Estate Salespersons fulfills his or her fiduciary duty towards his client, the negotiated overall commission is what governs (based on principles of contract law) the deal.

written by admin \\ tags: allocations, brokerages, commission structure, fiduciary duty, ontario real estate, percentages, professional assistance, real estate agent, real estate agents, real estate commissions, real estate lawyers, renting real estate, transaction fee