Tribunal rejects Vancouver realty firm’s claim for commission on unsold $490,000 property

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      Realtors get paid a commission for their services.

      The commission is negotiated, and it is either a percentage of the selling price or a fixed amount.

      Mostly, realtors get paid after a property is sold.

      The case with List Flat Fee Real Estate Corp. is quite different.

      The Vancouver-based realty company, also called List Flat, wanted to get paid a commission for a property it listed for $490,000.

      However, the home wasn’t sold.

      The seller, Tsuen Ting Chow, did not want to pay, and so the parties ended up before a B.C. tribunal.

      As tribunal member Richard McAndrew related in reasons for decision, the company “claims Ms. Chow owes the listing agreement’s sales commission because it obtained an offer from a ready, willing and able prospective buyer”.

      “List Flat says that Ms. Chow owes $15,252.75 plus tax in commission, but abandons the excess over $5,000, which is the Civil Resolution Tribunal’s (CRT) small claims monetary limit,” McAndrew wrote.

      Chow, for her part, said that List Flat is not entitled to a commission because her property was not sold during the listing agreement.

      McAndrew noted that List Flat was represented by owner Sarah Tso.

      The tribunal member determined that the company is not entitled to a commission under the listing agreement and the cancellation agreement that followed.

      It all began when Chow listed her property for sale with List Flat, and the parties signed a March 16, 2021 listing agreement.

      The exclusive listing agreement covered the period March 16, 2021 to May 16, 2021.

      McAndrew related that based on the agreement, the gross commission for List Flat is 3.255 percent of the first $100,000 of the selling price, 1.1625 percent of the balance of the selling price, and an additional $6,999, if there is no cooperating brokerage.

      A cooperating broker is the realtor who finds a buyer.

      If there is a cooperating brokerage, the buyer’s agent will be paid a commission of 3.255 percent of the first $100,000 of the selling price, 1.1625 percent of the balance, and List Flat will receive a $6,999 commission.

      McAndrew recalled that the agreement provided that Chow will pay List Flat the “gross commission if an offer to purchase is obtained from a prospective buyer who is ready, willing and able to pay the listing price and agrees to the other terms of this contract, even if Ms. Chow refuses to sign the offer to purchase”.

      List Flat told the tribunal that it presented four offers to Chow on March 19, 2021.

      McAndrew noted that the offers were $495,000, $500,000, $502,000 and $530,000.

      The tribunal member stated that List Flat claimed that the highest offer was for $550,000, but did not give it credence.

      “It is undisputed that Ms. Chow rejected all of the offers without making any counter-offers,” McAndrew wrote.

      Chow and List Flat agreed to cancel the listing agreement the next day on March 20, 2021, and signed a cancellation agreement.

      “In doing so, I find that the parties mutually cancelled the listing agreement which ended the parties’ obligations under that contract at that time,” McAndrew wrote.

      List Flat argued that Chow owes its sales commission because it found a prospective buyer.

      However, McAndrew ruled that a “listing agent is not entitled to a commission from a mutually cancelled listing agreement”.

      “Having found that the listing agreement was mutually cancelled on March 20, 2021, I find that List Flat is not entitled to commission relating to the listing agreement,” the tribunal member wrote.

      Also, the parties’ March 20, 2021 cancellation agreement stated that, “in consideration for cancelling the listing agreement, Ms. Chow agrees to pay List Flat’s commission if she sells the property, or an offer for sale was accepted, before a specified date”.

      “The cancellation agreement defined this date as the earlier of the listing agreement’s expiration date, or within 60 days of the cancellation date,” McAndrew explained.

      McAndrew noted that Chow’s “obligations under the cancellation agreement lasted until May 16, 2021”.

      “Since it is undisputed that Ms. Chow did not relist or sell her property until after May 16, 2021, I find that List Flat is not entitled to a commission under the cancellation agreement,” the CRT member wrote.