By Donald H. Lapowich

When determining real estate agents’ commission, watch the words you use. In this case, the words were notes on an exclusive listing agreement. 

The agreement required a commission if a transaction was completed during the 180-day extended period after termination of the original listing term. There was no definition of “completion” or “transaction”.

The court was faced with a lease agreement for a proposed purchaser to occupy the property and pay rent until the closing. The purchase was to be “one year later” and “immediate” payment of deposit, with the balance on closing.

This matter went to the Court of Appeal on the issue whether the real estate agent was owed a commission.

The Realtor lost because the agent had drafted the wording and “transaction is completed” was ambiguous, which worked to the benefit of the vendor.

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Another case in British Columbia is based largely on B.C. Statute Law. The principles behind the case are worthy of note.

The plaintiffs (claimants) purchased a home in a townhouse development, having received a disclosure statement from the developer (as signed).

The plaintiffs then signed an Agreement of Purchase and Sale, paid the first deposit, but refused to pay the second deposit after receiving and reviewing the “amended disclosure” with a number of changes, including a four-month delay in construction.

The developer took the position that the plaintiffs defaulted and kept the first deposit.  The plaintiffs sued and were awarded the return of the first deposit. The court found:

1. The developer eventually abandoned its intention to complete development.

2. The developer was aware of at least a 10-16 month delay in construction from the original completion date.

3. Consumers should be protected in respect to material changes in disclosure.

4. The later date of completion could reasonably affect value, price and use of the unit.

The court also declared that a deposit could not be liquidated damages that a developer could keep when developer did not begin construction.

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In a case in Nova Scotia, the plaintiff offered to purchase a home for $X. The plaintiff was represented by a father and son real estate team. They also represented the vendor. 

The younger agent told the plaintiff that there was a competing offer, so the plaintiff increased her offer, which was accepted and the deal closed.

Years later, the plaintiff learned that the competing offer was made by a company owned by the father’s wife and the father was an officer of the company.

In the lawsuit brought by the plaintiff, the court found that there was no doubt there was a breach of a duty of disclosure. However, the plaintiff did not demonstrate a monetary loss, the court found.

There is a principle that where there is a “technical” breach of duty, the court can award nominal damages.  This was not done in this case.

Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting forbuilders, real estate agents and lawyers.