Humber/Ontario Real Estate Course 4 Exam Practice

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Prepare for the Humber Real Estate Course 4 Exam with a comprehensive quiz designed to test your knowledge through flashcards and multiple-choice questions. Enhance your understanding and boost your confidence before taking the exam!

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Brokerage M lists a property with a 90-day protection period. The property is later sold under a new listing with Brokerage T to a buyer first introduced by Brokerage M. This sale happens 35 days after Brokerage M's listing expired. Both listing agreements had a 4.0% commission. In this scenario:

Brokerage T is owed the commission as per its listing agreement.
Brokerage M would share the commission with Brokerage T because the buyer was first introduced by Brokerage M, but the sale completed through Brokerage T.
Brokerage T should not receive any commission because Brokerage M's 90-day holdover period applies.
Brokerage M will receive a referral fee not exceeding 20% of the total commission from Brokerage T as the buyer was identified by them.

The correct answer is: Brokerage T is owed the commission as per its listing agreement.

In this scenario, the focus is on the listing agreements and the protection periods associated with them. The situation involves a property listed by Brokerage M with a 90-day protection period, which means that if the property sells to a buyer introduced by Brokerage M within 90 days of the expiration of its listing agreement, Brokerage M is entitled to a commission. Since the property was sold by Brokerage T 35 days after the listing with Brokerage M expired, the critical factor is that the sale occurred after the protection period. Brokerage T, having the new listing agreement in place at the time of the sale, is considered to be the brokerage completing the transaction, therefore entitled to their commission as established in their agreement. Even though the buyer was initially introduced by Brokerage M, once the protection period has lapsed, the buyer is no longer under the influence of the original agreement. Options relating to commissions being split or referral fees become irrelevant because they depend on the context of the protection period and whether it was still active when the sale occurred. Since the transaction happened outside the holdover period, the commission is rightfully awarded to Brokerage T as they facilitated the sale under a valid listing agreement.