Brian Madigan LL.B., Broker
BRMadigan@iSourceRealEstate.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300
Toll Free: 1-888-507-0817

 

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A Very poor Explanation of a Buyer Representation Agreement

October 1, 2016 - Updated: May 9, 2017

A Very Poor Explanation of the Buyer Representation Agreement

 

The Buyer Representation Agreement requires explanation in order to be enforceable.

 

Judge J.B. McNulty delivered a Judgment in the case of Century 21 People’s Choice Realty Inc. v. Saleem on 29 March, 2016. In that case, the Trial Judge was rather disappointed and failed to enforce the Buyer Representation Agreement, in part, because the explanation was so poor.

 

How poor was it, you ask? Well, let’s look at what the Judge had to say about it.

 

The Reasons for Judgment

 

This is the relevant explanation offered”

 

[36] On this point both the Claim, and the Defence in this case, are drafted in “letter form” to the court.  Both struggle with the constructs of basic English grammar. I can tolerate that of the Defendant (then self represented), but I am less sympathetic with that of the Plaintiff as the claim was crafted by Srivastava, the broker of record.

 

[37] The first paragraph of the claim sets up the circumstances of how the Defendant came to meet Ahmad and Srivastava for the purpose of real estate services. This involves the signing and explanation of the BRA. As will be seen below, their testimony at trial was that they “fully explained” this agreement to the Defendant.

 

[38] Yet the claim reads, in part as follows:

 

  “I….Then Wadood Ahmad told him [the Defendant] that he can come to office then will sit down and explain the process to buy the house as well as buyer agency agreement after that he will work with him”…

 

[39] This is evidence of “full explanation”?

 

[40] The Defence, as filed, is no more articulate, but it is consistent with the Defendant’s testimony at trial.

 

……………

[61] The first witness to testify on this point on behalf of the Brokerage was Srivastava.  He is the broker; Ahmad was his agent.  A broker, one would assume, ought to know how real estate transactions are explained and documented.  They are ethically and professionally bound to do so.

 

[62] Srivastava’s evidence, is astoundingly brief.  The brevity of his evidence is matched only by the obscurity of that given by his agent Ahmad.  I shall address both below.

 

[63] Srivastava has been the broker of record of the Brokerage since 1999.  Under direct examination he said that the Defendant came to his office sometime in August, 2011 because Ahmad was providing real estate services to him.  He says that Ahmad “brought the Defendant to the office so that I could explain the process to him.”  He was not asked, nor did he offer, any explanation of what he meant by “the process.”

 

[64] What he did recall is that “the process” was explained to the Defendant in Urdu, the native tongue of the Defendant.  He testified that the Defendant also understood English.

 

[65] As to his explanation of the BRA, he said in English, during testimony that “you must buy through us.” He said that he then walked the Defendant through a few provisions of the representation agreement.  As to the exclusivity of services provision, he said he told the Defendant that “you can’t use other brokers,” and “you have to pay 2.5% commission.”  He continued to say that he explained to the Defendant that “the term of the agreement was four months, with a 30 day holdover provision.”

 

COMMENT

 

An explanation like this is really no explanation at all.

 

The failure to provide an adequate explanation permits the Buyer to claim that he did not understand the argument and therefore, it was not enforceable.

 

Sadly, many explanations are not much better than this. Issues, become more complex if there are language barriers.

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: contract bra explanation not enforceable ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

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