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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Buyer Customer Service Agreement -Brian Madigan - Explained

June 5, 2015 - Updated: June 5, 2015

 

Buyer Customer Service Agreement – Brian Madigan - Explained

 

Be careful about printing this, it will run over 35 pages. This is the long version.

 

What is a CUSTOMER? (Part 1)

 

We are going to examine the Buyer Customer Service Agreement. In doing so, we will have to have a look at it carefully, paragraph by paragraph, line by line and word by word. Otherwise, it’s just general impressions, and you really don’t need that.

 

The first question before we get to the Form is: What is a Customer?

 

A short explanation has been offered by the Ontario Real Estate Association in its document entitled “Working with a REALTOR”:

 

Customer

 

A buyer/tenant or seller/landlord may not wish to be under contract as a client with the brokerage but would rather be treated as a customer. A REALTOR® is obligated to treat every person in a real estate transaction with honesty, fairness, and integrity, but unlike a client, provides a customer with a restricted level of service. Services provided to a customer may include showing the property or properties, drafting the offer, presenting the offer, etc. Brokerages use a Customer Service Agreement to document the services they are providing to a buyer/tenant or seller/landlord customer. Under the Act, the REALTOR® has disclosure obligations to a customer and must disclose material facts known to the brokerage that relate to the transaction.

 

I propose to go through the explanation and offer my own commentary in “italics”.

 

Let’s have a better look at what that says:

 

Customer

 

A buyer/tenant or seller/landlord may not wish to be under contract as a client with the brokerage

 

This means just about anybody on either side of a buy/sell or lease of real estate

 

but would rather be treated as a customer.

 

You will appreciate that this presumes that the consumer knows and appreciates what a client is and what a customer is, and the differences between them.

 

A REALTOR® is obligated to treat every person in a real estate transaction with honesty, fairness, and integrity,

 

This duty is set out in the Code of Ethics which is a Regulation passed pursuant to the Real Estate and Business Brokers Act, 2002, (often referred to as REBBA, 2002).

 

That duty is owed to every member of the public. No special relationship need exist.

 

but unlike a client, provides a customer with a restricted level of service.

 

So, here the key concept is “RESTRICTED” level of service. Obviously, this also begs the question: “how restricted”.

 

Services provided to a customer may include showing the property or properties, drafting the offer, presenting the offer, etc.

 

These are just examples and include under the definition of services:

 

  1. Showing property
  2. Drafting Offers,
  3. Presenting Offers, and
  4. Other services, not specified.

 

Brokerages use a Customer Service Agreement to document the services they are providing to a buyer/tenant or seller/landlord customer.

 

Presumably, if there are to be restricted services, then they should be spelled out specifically in the agreement.

 

Under the Act, the REALTOR® has disclosure obligations to a customer and must disclose material facts known to the brokerage that relate to the transaction.

 

This statement is partly true. In addition, for customers, the REALTOR must disclose those material facts which “ought to be known”. That was a major oversight in the explanation.

 

This is an obligation imposed under the Code of Ethics. It says “known” and this is fine, the agent can make that disclosure, but it also says “ought to know”. So how can an agent disclose something that they don’t know about? That calls for investigation and inquiry!

 

 

Buyer Customer Service Agreement (Part 2) – PARTIES

 

We will review the “Customer Service” agreement in detail. My comments will appear in “italics”. I will first set out the section in full as it appears in the document, then I will break it apart for detailed review. This will permit the reader to first read through the entire paragraph or section in its entirety before we look at each line.

 

“This Is A Non-Exclusive Buyer Customer Service Agreement

 

BETWEEN:

 

BROKERAGE:................................................................................................................

Tel.No. (..........)...................................

 

ADDRESS:.........................................................................................................................

............................................................................................................................................ Fax.No. (...........)..................................

 

hereinafter referred to as the Brokerage.

 

AND:

 

BUYER(S):......................................................................................................................... hereinafter referred to as the Buyer,”

 

 

 

This section here just sets out the names of the parties. Oddly the Buyers just have names, but the Brokerage is identified both by address, telephone and fax numbers.

 

In the title is a reference to the agreement being “non-exclusive”. That simply means that both the Brokerage and the Buyers may deal with another party on this same matter.

 

This will ultimately prove to be of significance in defining duties and obligations.

 

This entire arrangement is one of “non-agency”. In Ontario “agency” agreements are now referred to as “representation” agreements. The Client is the Principal and the Brokerage is the Agent. There could indeed be potential conflicts in cases where the Brokerage might have two Clients.

 

The Act and the Regulations distinguish between the duties owed to Clients and Customers.

 

You might recall that at common law, clients in an agency relationship are owe certain fiduciary duties which include:

 

  • Disclosure
  • Obedience
  • Competence
  • Confidentiality
  • Accounting
  • Loyalty

 

 

These same obligations are not owed to Customers.

 

Buyer Customer Service Agreement (Part 3) - The Mandate

 

“for the purpose of locating a real property meeting the following general description:

 

Property Type (Use):..................................................................................................................................

............................................................................................................................................

Geographic Location:.........................................................................................................................................................................................................................................................................

 

In consideration of the Brokerage providing customer service to the Buyer for the purchase or lease of a real property of the general description indicated above, the Buyer acknowledges and agrees to the terms as stated in this Agreement.

 

This non-exclusive Buyer Customer Service Agreement:

 

commences at........................a.m./p.m. on the.............................................................day of........................................................., 20.............,

and expires at 11:59 p.m. on the..............................................................day of......................................................., 20..............(Expiry Date).

 

Buyer acknowledges that the time period for this Agreement is negotiable between the Buyer and the Brokerage, however, in accordance with the Real Estate and Business Brokers Act of Ontario (2002),

 

if the time period for this Agreement exceeds six months, the Brokerage must obtain the Buyer’s initials.

 

The Buyer hereby warrants that the Buyer is not a party to a buyer representation agreement with any other registered real estate brokerage for the purchase or lease of a real property of the general description indicated above.”

 

  

REVIEW

 

“for the purpose of locating a real property meeting the following general description:

 

This is the commencement of the mandate. The task at hand is the “locating” of a property.

 

 

Property Type (Use):..................................................................................................................................

............................................................................................................................................

 

The type and use of the property are described. It might be for example a “single family residential” property or it could be a “commercial gas station”.

 

Geographic Location:.........................................................................................................................................................................................................................................................................

 

 

Where? Assuming there is nothing more important in real estate than Location, location, location, then, just where is this property to be found!

 

It will be important to assess the attributes and experience of the individual at the Brokerage providing service. Does this person have the knowledge in that particular geographical area (assuming that is of importance) or the type of property to be purchased?

 

In consideration of the Brokerage providing customer service to the Buyer for the purchase or lease of a real property of the general description indicated above, the Buyer acknowledges and agrees to the terms as stated in this Agreement.

 

This is the acknowledgement that there is contract. Consideration is identified, This agreement will be binding on both parties.

 

So, what’s the deal? It is to provide “customer service”. What’s that? It is whatever services happens to be spelled out in this agreement. If you are a consumer, you had better be sure that all the services you want or expect, are in fact covered off here.

 

This non-exclusive Buyer Customer Service Agreement:

 

commences at........................a.m./p.m. on the.............................................................day of........................................................., 20.............,

and expires at 11:59 p.m. on the..............................................................day of......................................................., 20..............(Expiry Date).

 

 

You will notice that there is a commencement time followed by an expiry date. It is not as important as agency, since that precludes a second agency agreement. But, the customer service level does not preclude other similar customer service agreements, all overlapping one another. This agreement is “non-exclusive”.

 

Buyer acknowledges that the time period for this Agreement is negotiable between the Buyer and the Brokerage, however, in accordance with the Real Estate and Business Brokers Act of Ontario (2002),

 

This agreement could be for any time period, a few hours, a day, a month or even longer.

 

if the time period for this Agreement exceeds six months, the Brokerage must obtain the Buyer’s initials.

 

 

Please note here that this provision appears in BOLD print. For agreements that extend beyond six (6) months, the Buyer must initial the date.

 

The Buyer hereby warrants that the Buyer is not a party to a buyer representation agreement with any other registered real estate brokerage for the purchase or lease of a real property of the general description indicated above.”

 

This is a warranty. The Buyer is saying that there is no agency appointment or representation agreement in force. That document would preclude this level of service agreement. A consumer could sign many customer service agreements with different Brokerages, all covering the same matters.

 

Buyer Customer Service Agreement (Part 4) – DEFINITIONS

 

 

“1. DEFINITIONS AND INTERPRETATIONS: For the purposes of this Buyer Customer Service Agreement (“Authority” or “Agreement”), "Buyer" includes purchaser and tenant, a "seller" includes a vendor, a landlord or a prospective seller, vendor or landlord and a “real estate board” includes a real estate association. A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised, and a lease includes any rental agreement, sub-lease or renewal of a lease. This Agreement shall be read with all changes of gender or number required by the context.”

 

REVIEW

  

1. DEFINITIONS AND INTERPRETATIONS:

 

For the purposes of this Buyer Customer Service Agreement (“Authority” or “Agreement”),

 

"Buyer" includes purchaser and tenant,

 

a "seller" includes a vendor, a landlord or a prospective seller, vendor or landlord and

 

a “real estate board” includes a real estate association.

 

A purchase shall be deemed to include the entering into of any agreement to exchange, or the obtaining of an option to purchase which is subsequently exercised, and

 

a lease includes any rental agreement, sub-lease or renewal of a lease.

 

This Agreement shall be read with all changes of gender or number required by the context.

 

 

The individual definitions are all quite self-evident, so I will not go through them in detail. However, you will notice that a lease is covered off as well in a purchase. So, the consumer might owe a commission if the deal itself changes from a purchase to a lease or vice-versa.

 

And, this agreement is also referred to as an “authority”. This will be of importance later, when we look at a third and distinct level of service, below that of “customer service”.

 

 

Buyer Customer Service Agreement (Part 5) - COMMISSION

 

 

“2. COMMISSION: For a Buyer Customer Service Agreement between Buyer and Brokerage, there is no requirement for the Buyer to pay the Brokerage compensation for the customer service provided by the Brokerage, unless otherwise agreed to in writing.”

  

REVIEW

 

2. COMMISSION:

 

For a Buyer Customer Service Agreement between Buyer and Brokerage,

 

This is self-explanatory, we are dealing here with the matter of commission.

 

there is no requirement for the Buyer to pay the Brokerage compensation for the customer service provided by the Brokerage,

 

So, this would appear to be somewhat of a surprise. No commission, at all!

 

unless otherwise agreed to in writing.

 

Well, that was rather “short-lived”. The commission could be specified in here, somewhere else.

 

Buyer Customer Service Agreement- REPRESENTATION AND CUSTOMER SERVICE

  

“3. REPRESENTATION AND CUSTOMER SERVICE: The Buyer acknowledges that the Brokerage has provided the Buyer with written information explaining agency relationships, including information on Seller Representation, Sub-Agency, Buyer Representation, Multiple Representation and Customer Service. The Buyer acknowledges that the Brokerage will be providing customer service to the Buyer and will not be representing the interests of the Buyer in a transaction. The Brokerage may be representing the interests of the seller as an agent or sub-agent. When the Brokerage is representing the seller, the seller is considered to be the Brokerage’s client, and the Brokerage’s primary duties are to protect and promote the interests of the seller/client. The Brokerage will disclose all pertinent information to a seller/client obtained from or about the Buyer.

 

Even though the Brokerage’s primary duties may be to the seller, the Brokerage may provide many valuable customer services to the Buyer.

 

When providing customer service to the Buyer, the Brokerage’s duties to the Buyer include:

 

• the Ethical duty to deal fairly, honestly and with integrity;

• the Legal duty to exercise due care when answering questions and providing information; and

• the Legal duty to avoid misrepresentation.

 

The Buyer acknowledges that the Buyer may not be shown or offered all properties that may be of interest to the Buyer. The Buyer hereby agrees that the terms of any buyer's offer or agreement to purchase or lease the property will not be disclosed to any other buyer.

 

The Buyer understands and agrees that the Brokerage also provides representation and customer service to other buyers and sellers. If the Brokerage represents or provides customer service to more than one seller or buyer for the same trade, the Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers and buyers of the nature of the Brokerage's relationship to each seller and buyer”

 

REVIEW

  

3. REPRESENTATION AND CUSTOMER SERVICE:

 

The Buyer acknowledges that the Brokerage has provided the Buyer with written information explaining agency relationships,

 

Generally, this would be the document entitled “Working with a REALTOR”. It comes in brochures, fax forms and electronic versions. There is also another document entitled “Working with a Commercial REALTOR”. It is identical in all respects, save and except the inclusion of the word “commercial”.

 

including information on Seller Representation, Sub-Agency, Buyer Representation, Multiple Representation and Customer Service.

 

 

Seller Representation means an agency appointment with the Seller. The Seller is a Client and fiduciary duties are owed. Sub-Agency is an arrangement whereby Brokerage A takes on Brokerage B as a sub-agent, that is, “agent of the agent”. Brokerage B owes fiduciary duties to the Client. Buyer Representation is the same for the Buyer. Here, the Buyer is a Client and fiduciary duties are owed. Multiple Representation occurs when a Brokerage has more than one Client, either Sellers or Buyers in the same deal. Obviously, there is going to be a conflict. Customer service is non-agency services with some obligations under the Act and the Ciode.

 

The Buyer acknowledges that the Brokerage will be providing customer service to the Buyer and

 

This is a simple straightforward acknowledgement that this is indeed the “customer service agreement” and NOT something else.

 

will not be representing the interests of the Buyer in a transaction.

 

Representing is the key term. That means “agency”. It also means fiduciary duties. So, by the inclusion of the word “not”, the document means “no agency” and “no fiduciary duties”.

 

The Brokerage may be representing the interests of the seller as an agent or sub-agent.

 

This is a statement of disclosure or disclaimer. But it says “may”, which means, of course, that it is not the real notice.

 

When the Brokerage is representing the seller, the seller is considered to be the Brokerage’s client, and

 

Previously explained.

 

the Brokerage’s primary duties are to protect and promote the interests of the seller/client.

 

Very specifically, it means that the Brokerage is working FOR the Seller, and just helping out the Buyer.

 

The Brokerage will disclose all pertinent information to a seller/client obtained from or about the Buyer.

 

This is interesting! The Brokerage is going to take all of your confidential information and pass it along to the Seller. So you are HEREBY WARNED. Keep your secrets to yourself, if you know what’s good for you.

 

Even though the Brokerage’s primary duties may be to the seller, the Brokerage may provide many valuable customer services to the Buyer.

 

What is meant by that? How valuable can these “customer services” actually be? Well, at least, so far, they are going to be free.

 

When providing customer service to the Buyer, the Brokerage’s duties to the Buyer include:

 

• the Ethical duty to deal fairly, honestly and with integrity;

• the Legal duty to exercise due care when answering questions and providing information; and

• the Legal duty to avoid misrepresentation.

 

 

You appreciate that the Brokerage is obligated not to lie and try to trick you. The ethical duties are set out in s. 3 of the Code of Ethics. The next section in the Code says …” the registrant shall provide conscientious and competent service”. This applies to both clients and customers. Further, section 4 requires the registrant to “demonstrate reasonable knowledge, skill, judgment and competence” in providing those services.

 

You will appreciate that goes quite beyond the legal duty set forth above.

 

There is also a provision in the Code that deals with “providing opinions”. Here, “reasonable knowledge, skill, judgment and competence” is required “in providing opinions, advice or information to any person”. This would cover off the Buyer in a customer service agreement. It’s not likely that opinions or advice would be offered. If that were to occur, then the customer becomes a client (by accident).

 

Another legal duty is identified concerning misrepresentation. The Code of Ethics deals with this in section 32 where it says: “a registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud, or unethical practice in respect to a trade in real estate”. Again this applies to both clients and customers as well as the general public.

 

The Buyer acknowledges that the Buyer may not be shown or offered all properties that may be of interest to the Buyer.

 

This is the property search. It will cover some properties, not all. There is no expectation here for something broad based and comprehensive. That would require an agency appointment.

 

The Buyer hereby agrees that the terms of any buyer's offer or agreement to purchase or lease the property will not be disclosed to any other buyer.

 

This is an acknowledgement of some degree of confidentiality. So, if the Brokerage represents two buyers both submitting Offers on the same property in competition with each other, one as a customer and the other as a client, they are agreeing not to disclose the customer’s Offer to the competing Buyer Client.

 

The Buyer understands and agrees that the Brokerage also provides representation and customer service to other buyers and sellers.

 

This is a simple acknowledgement, but it is not notice. Actual notice is required. At the very least the Confirmation of Co-operation and Representation (CCR) is that document. This deals with agency and non-agency arrangements.

 

If the Brokerage represents or provides customer service to more than one seller or buyer for the same trade,

 

This is the obligation, it covers agency “representation” and non-agency “customer service.

 

the Brokerage shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all sellers and buyers of the nature of the Brokerage's relationship to each seller and buyer

 

 

Full disclosure will be made BEFORE an Offer. So, ordinarily this will be the CCR.

 

 

Buyer Customer Service Agreement (Part 7) - INDEMNIFICATION

 

 

“4. INDEMNIFICATION: The Brokerage and representatives of the Brokerage are trained in dealing in real estate but are not qualified in determining the physical condition of the land or any improvements thereon. The Buyer agrees that the Brokerage and representatives of the Brokerage will not be liable for any defects, whether latent or patent, to the land or improvements thereon. All information supplied by the seller or landlord or the listing brokerage may not have been verified and is not warranted by the Brokerage as being accurate and will be relied on by the Buyer at the Buyer's own risk. The Buyer acknowledges having been advised to make their own enquiries to confirm the condition of the property.”

 

 

REVIEW

 

 

4. INDEMNIFICATION:

 

The Brokerage and representatives of the Brokerage are trained in dealing in real estate

 

This specifies their expertise, namely, real estate, just real estate

 

but are not qualified in determining the physical condition of the land or any improvements thereon.

 

The Brokerage nor its representatives are not soli test engineers. They don’t know brownfields or contaminated properties. And, they are not building inspectors or structural engineers. There are clearly others who have this expertise.

 

The Buyer agrees that the Brokerage and representatives of the Brokerage will not be liable for any defects,

 

This is effectively a disclaimer. It is not an indemnification provision at all. It lacks the magic words….”I hereby indemnify and save harmless …..etc.”

 

whether latent or patent,

 

There are two types of defects: those that can be seen and identified with the senses (patent) and those which are hidden from view (latent)

 

to the land or improvements thereon.

 

This interesting omission here is surrounding properties and the neighbourhood. There can be defects there, and they are not covered here. So, that’s good for the consumer, and not so good for the real estate professional.

 

All information supplied by the seller or landlord or the listing brokerage

 

The sources of the information in the first place would be the other side, in a transaction.

 

may not have been verified and is not warranted by the Brokerage

 

The open ended part here, is that “verification” may have taken place. However, clearly, there is not a warranty.

 

as being accurate and will be relied on by the Buyer at the Buyer's own risk.

 

This means buyer beware, the unverified information is at the buyer’s risk.

 

The Buyer acknowledges having been advised to make their own enquiries to confirm the condition of the property.

 

If there is going to be any due diligence here, then it is the Buyer who will have to do it.

 

 

Buyer Customer Service Agreement (Part 8) - FINDERS FEE

 

 

“5. FINDERS FEE: The Buyer acknowledges that the Brokerage may be receiving a finder’s fee, reward and/or referral incentive, and the Buyer consents

to any such benefit being received and retained by the Brokerage in addition to the commission as described above.”

 

REVIEW

 

5. FINDERS FEE:

 

The Buyer acknowledges that the Brokerage may be receiving a finder’s fee, reward and/or referral incentive,

 

These types of payments can flow from banks, mortgagees, mortgage brokers, insurance brokers, home inspectors, other real estate companies, photographers.

 

and the Buyer consents to any such benefit being received and retained

 

This is to confirm that the Buyer agrees to these payments being made and kept. The only time this would actually be relevant is during an agency appointment where there is a fiduciary duty to account. This is added simply to avoid any possible misunderstanding.

 

by the Brokerage in addition to the commission as described above.

 

 

The amount is in addition to the commission. But, remember there was no commission unless they added it somewhere else.

 

Buyer Customer Service Agreement (Part 9) – Consumer Reports

 

 

“6. CONSUMER REPORTS: The Buyer is hereby notified that a Consumer Report containing credit and/or personal information may be referred to in connection with this Agreement and any subsequent transaction.”

 

 

REVIEW

 

6. CONSUMER REPORTS:

 

It is noteworthy that this entire section is in BOLD print.

 

The Buyer is hereby notified that a Consumer Report

 

Effectively, this is a notification or disclaimer.

 

containing credit and/or personal information

 

 

Any report would likely entail both items. The consumer report is a credit report, and that always contains personal information.

 

may be referred to in connection with this Agreement and any subsequent transaction.

 

It is important to be aware of the fact that this is NOT a specific authorization to obtain such a report. This clause is only a notification. It does not constitute permission to obtain such a report.

 

Buyer Customer Service Agreement (Part 10) – USE and DISTRIBUTION of INFORMATION

 

 “7. USE AND DISTRIBUTION OF INFORMATION: The Buyer consents to the collection, use and disclosure of personal information by the Brokerage for such purposes that relate to the real estate services provided by the Brokerage to the Buyer including, but not limited to: locating, assessing and qualifying properties for the Buyer; advertising on behalf of the Buyer; providing information as needed to third parties retained by the Buyer to assist in a transaction (e.g., financial institutions, building inspectors, etc...); and such other use of the Buyer’s information as is consistent with the services provided by the Brokerage in connection with the purchase or prospective purchase of the property.

 

The Buyer agrees that the sale and related information regarding any property purchased by the Buyer through the Brokerage may be retained and disclosed by the Brokerage and/or real estate board(s) (if the property is an MLS® Listing) for reporting, appraisal and statistical purposes and for such other use of the information as the Brokerage and/or board deems appropriate in connection with the listing, marketing and selling of real estate, including conducting comparative market analyses.

 

The Buyer acknowledges that the information, personal or otherwise ("information"), provided to the real estate board or association may be stored on databases located outside of Canada, in which case the information would be subject to the laws of the jurisdiction in which the information is located.”

 

REVIEW

 

7. USE AND DISTRIBUTION OF INFORMATION:

 

The Buyer consents to the collection, use and disclosure of personal information

 

This is significant. Personal; information is being obtained.

 

by the Brokerage for such purposes that relate to the real estate services

provided by the Brokerage to the Buyer

 

The use must be confined to real estate services. Remember that the whole issue of “what services” is up in the air. They should be documented here in this agreement.

 

including, but not limited to: locating, assessing and qualifying properties for the Buyer;

 

These are some of the real estate services.

 

advertising on behalf of the Buyer;

 

There are several internet sites where “needs and wants” are posted. There could be a description of the buyer appearing here.

 

providing information as needed to third parties retained by the Buyer to assist in a transaction (e.g., financial institutions, building inspectors, etc...);

 

Lawyers, surveyors, engineers, home inspectors, photographers, paralegals etc.

 

and such other use of the Buyer’s information as is consistent with the services provided by the Brokerage in connection with the purchase or prospective purchase of the property.

 

Oddly, this document just says “other use”. I would have thought it should have said “other uses”. When the singular is used, I cannot say what that particular use might be, and if the drafter knew and there was only one left, why not just tell us right here.

 

The Buyer agrees that the sale and related information regarding any property purchased by the Buyer through the Brokerage

 

This provision only applies if there is a deal.

 

may be retained and disclosed by the Brokerage and/or real estate board(s) (if the property is an MLS® Listing) for reporting, appraisal and statistical purposes

 

This information is actually necessary in order to maintain the integrity of the MLS system.

 

and for such other use of the information as the Brokerage and/or board deems appropriate in connection with the listing, marketing and selling of real estate, including conducting comparative market analyses.

 

The real need for the information is to demonstrate value, at the time and later.

 

The Buyer acknowledges that the information, personal or otherwise ("information"),

 

provided to the real estate board or association may be stored on databases located outside of Canada,

 

The information on the deal is submitted to the local Board. It would appear that many websites have data stored in other areas.

 

in which case the information would be subject to the laws of the jurisdiction in which the information is located.

 

This is a warning and simple statement to the effect that the data has gone beyond the scope of Canada’s legal jurisdiction.

 

Buyer Customer Service Agreement (Part 11) - Conflict or Discrepancy

 

 

“8. CONFLICT OR DISCREPANCY: If there is any conflict or discrepancy between any provision added to this Agreement and any provision in the standard pre-set portion hereof, the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement, including any provisions added to this Agreement, shall constitute the entire Agreement between the Buyer and the Brokerage. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.”

 

REVIEW

 

8. CONFLICT OR DISCREPANCY:

 

If there is any conflict or discrepancy between any provision added to this Agreement and any provision in the standard pre-set portion hereof,

 

On occasion there would be terms, conditions or provisions added to the agreement perhaps by interlineation, marginal notes or by a Schedule.

 

the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy.

 

The added portion will prevail over the standard wording. However, it had better be clear, otherwise, it would be meaningless.

 

This Agreement, including any provisions added to this Agreement, shall constitute the entire Agreement between the Buyer and the Brokerage.

 

This is the “entire agreement” provision as well. That is a standard term in every contract.

 

There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.

 

That is the effect of the entire agreement clause. Simply put, there are no “side deals”, no “fingers crossed”, or “but first”. This is the complete deal, no need to look elsewhere.

 

Buyer Customer Service Agreement (Part 12)- Electronic Communication

 

 

“9. ELECTRONIC COMMUNICATION: This Buyer Customer Service Agreement and any agreements, notices or other communications contemplated thereby may be transmitted by means of electronic systems, in which case signatures shall be deemed to be original. The transmission of this Agreement by the Buyer by electronic means shall be deemed to confirm the Buyer has retained a true copy of the Agreement.”

 

 

REVIEW

 

9. ELECTRONIC COMMUNICATION:

 

This Buyer Customer Service Agreement and any agreements, notices or other communications contemplated thereby

 

Emails, faxes, texts and internet means are authorized. Perhaps, Facebook or some other sites are not preferred. In that case, they should be excluded and resort should be had to only those methods which are selected.

 

 

may be transmitted by means of electronic systems,

 

Be careful to specify!

 

in which case signatures shall be deemed to be original.

 

This is in consequence of the terms of the Electronic Commerce Act.

 

The transmission of this Agreement by the Buyer by electronic means shall be deemed to confirm the Buyer has retained a true copy of the Agreement.

 

This would seem to be unnecessary, but it’s there.

 

Buyer Customer Service Agreement (Part 13) – Schedule(s)

 

 

“10. SCHEDULE(S):...........................................................................................................................attached hereto form(s) part of this Agreement.

 

 

REVIEW

 

10. SCHEDULE(S):...........................................................................................................................attached hereto form(s) part of this Agreement.

 

 

Actually there is nothing at all complicated here. But, the schedules may override other parts of the agreement. So, in that respect, they become very, very important.

 

It is noteworthy that the agreement does not deal with any commission or fee being payable.

 

  

Buyer Customer Service Agreement (Part 14) – Restated MANDATE

 

 

“THE BROKERAGE AGREES TO ASSIST THE BUYER IN LOCATING A REAL ROPERTY OF THE GENERAL DESCRIPTION INDICATED ABOVE AND TO PROVIDE CUSTOMER SERVICE TO THE BUYER IN AN ENDEAVOUR TO PROCURE THE ACCEPTANCE OF AN AGREEMENT TO PURCHASE OR LEASE A PROPERTY ACCEPTABLE TO THE BUYER.”

 

REVIEW

 

It is noteworthy that this section appears totally in BOLD print. Presumably, it is very important.

 

We already had a “mandate” but this time we have it again, but slightly different wording. There is no title in the contract. It appears just above the signatures.

 

 

THE BROKERAGE AGREES TO ASSIST THE BUYER

 

The operative words here are “assist”.

 

IN LOCATING A REAL PROPERTY OF THE GENERAL DESCRIPTION INDICATED ABOVE

 

The task at hand is to find a suitable property that matches the outline on page 1.

 

AND TO PROVIDE CUSTOMER SERVICE TO THE BUYER

 

This a customer service contract, not agency.

 

IN AN ENDEAVOUR TO PROCURE THE ACCEPTANCE OF AN AGREEMENT TO PURCHASE OR LEASE A PROPERTY

 

 

The goal is to complete a purchase or lease.

 

ACCEPTABLE TO THE BUYER.

 

And, finally, that deal would have to be acceptable to the Buyer.

 

 

Buyer Customer Service Agreement (Part 15)- Execution of the Document

 

 

.................................................................................... DATE.....................................

(Authorized to bind the Brokerage)

 

............................................................................

 (Name of Person Signing)

 

THIS AGREEMENT HAS BEEN READ AND FULLY UNDERSTOOD BY ME AND I ACKNOWLEDGE THIS DATE I HAVE SIGNED UNDER SEAL.

 

Any representations contained herein are true to the best of my knowledge, information and belief.

 

 

SIGNED, SEALED AND DELIVERED I have hereunto set my hand and seal:

..................................................................................... DATE.....................................

(Signature of Buyer) (Seal)

..................................................................................... DATE.....................................

(Signature of Buyer) (Seal)

 

Address...............................................................................................................................

(................)............................................................................

Tel. No.

(................)............................................................................

FAX No.

 

 

REVIEW

 

 

.................................................................................... DATE.....................................

(Authorized to bind the Brokerage)

 

............................................................................

 (Name of Person Signing)

 

You will see here that the sales representative will print their own name, date the document and then sign it. The contract will be binding upon the Brokerage.

 

 

THIS AGREEMENT HAS BEEN READ AND FULLY UNDERSTOOD BY ME AND I ACKNOWLEDGE THIS DATE I HAVE SIGNED UNDER SEAL.

 

This is the section which deals with the Buyer or Buyers. First, there is an acknowledgment that the document is understood. You might recall that when we looked at the agency agreement, each Buyer had to sign that the other Buyer understood the document too.

 

An appreciation that the document is “under seal” means that it will be a binding contract even without consideration.

 

Any representations contained herein are true to the best of my knowledge, information and belief.

 

This is an affirmation assertion about any facts or information supplied. Essentially, that means “no agency contracts” with anyone else.

 

SIGNED, SEALED AND DELIVERED I have hereunto set my hand and seal:

..................................................................................... DATE.....................................

(Signature of Buyer) (Seal)

..................................................................................... DATE.....................................

(Signature of Buyer) (Seal)

 

Address...............................................................................................................................

(................)............................................................................

Tel. No.

(................)............................................................................

FAX No.

 

The document calls for the signatures of the Buyers, who will insert the date and provide their address, phone and fax number. One would think that an email address would be more appropriate, but apparently not.

 

 

Buyer Customer Service Agreement (Part 16) - Declaration of Insurance

 

 

“DECLARATION OF INSURANCE

The broker/salesperson..................................................................................................................................................................................

(Name of Broker/Salesperson)

 

hereby declares that he/she is insured as required by the Real Estate and Business Brokers Act (REBBA) and Regulations.

......................................................................................................................................................................................

(Signature(s) of Broker/Salesperson)”

 

REVIEW

 

DECLARATION OF INSURANCE

The broker/salesperson..................................................................................................................................................................................

(Name of Broker/Salesperson)

 

The only circumstance here is the statement by the individual broker or sales representative. The Brokerage is not signing, nor is it confirming that it also carries insurance.

 

hereby declares that he/she is insured as required by the Real Estate and Business Brokers Act (REBBA) and Regulations.

............................................................

 

...........................................................

(Signature(s) of Broker/Salesperson)”

 

There is room for two brokers or sale representatives to sign. The interesting question, of course, is that this is not true “evidence of insurance”. It’s just a statement. If it’s wrong, it’s wrong. Assume a former agent, no longer covered by insurance who falsifies this statement. There is no insurance.

The proper due diligence step would be to check the RECO website and confirm the status of the person’s registration.

 

Buyer Customer Service Agreement (Part 17) – Acknowledgement

 

 

 

ACKNOWLEDGEMENT

 

The

ACKNOWLEDGEMENT

 

The Buyer(s) hereby acknowledge that the Buyer(s) fully understand the terms of this Agreement and have received a true copy of this

Agreement on the …….......................................................…………. day of …………………......................…………, 20 …...........................………...

 

 

........................................................... Date:......................................................................

(Signature of Buyer)

 

........................................................... Date:......................................................................

(Signature of Buyer)

 

 

REVIEW

 

 

The first part simply makes note of the fact that the Buyers both understand the agreement and have their own copies.

 

You will notice that the way it is written, the Buyers each make that statement for both of them, not simply individually.

 

So, if you were a consumer you would want your own separate agreement.

 

Summary

 

If you are not sure that you understand the Agreement, then ask, either a real estate agent or a lawyer practicing in the real estate field to explain the document and its legal implications.

 


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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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