In Ontario, home buyers who decide to hire an agent to purchase a home must sign a representation agreement with a realtor. The agreement requires homebuyers pay the realtor a commission after they purchase a home, even if the home is purchased with a different agent during the agreement period and the following 90-day holdover.
But cases arise where this agreement, which intends to protect all parties involved in real estate transactions, have put some home buyers -- most of whom from the immigrant communities -- in a dire situation. Some face their agents in court, and even carrying a heavy debt load after a court judgment.
But these tragic stories have elicited different views and interpretations from the legal community and industry experts. Some believe that buyers need to be aware of their signing responsibilities, whereas others complain that the agreement is unfair to consumers and thus prone to abuse. The concerns have sparked calls for tougher regulations on buyers’ representation agreement.
Chinese News had published an article in 2013 reporting a dispute between a newcomer Lily and her real estate agent. According to court documents, Lily wasn’t aware of having signed such an agreement with an agent until she received a legal claim from him, seeking a commission of 2.25% on the home (about $20,000) she purchased with a different agent.
“I was dumbfounded by this claim… I was completely unaware that I had signed such a contract… Now I’ve realized that he sneaked inside an offer package he helped me prepared for a bidding war that I’ve lost.
据CBC报道，印裔移民Ajit Bains也经历了和李莉类似的悲惨遭遇。据Bains称，他是被Homelife Superstars的一名地产经纪诱骗签署这种代理合约。在Bains通过另一名经纪达成购房交易后，他被原先委托的经纪告上法庭，最终法庭判决经纪胜诉，Bains因此背上了一笔$12,280元债务并且他所购新房也被债务抵押。
According to CBC, Ajit Bains, an immigrant from the Indian community has gone through a similar ordeal as Lily. Bains was allegedly tricked into signing such a representation contract with a Homelife Superstars realtor. After Bains bought a home with a different agent, he was sued by the agent in the agreement and a court ruling has left him facing a $12,280 debt and lien on his home.
After a tough battle with the agent in court, the judge awarded the agent and his company the amount of money they were seeking. The agent told the court that he had explained the agreement to Bains in English and that Bains understood it.
“The document was there for him [Bains] to read and sign,” wrote the judge in his judgment.
RECO, Real Estate Council of Ontario – the regulatory body of realtors also believes that purchasers who breach a legal binding contract are liable to pay for the agent commission.
Kyle Rooks, the Senior Communications Officer of RECO, wrote in an earlier email to Chinese News that it is the responsibility of the signing clients to ask questions and ensure they understand what they are signing.
It has become an old cliché: don’t sign an agreement if don’t understand it. But future consumers might get better protection as industry experts are calling for changes.
Industry experts: deal is unfair to consumers
Despite the fact that the judge’s ruling has held up the agreement, the judgment indicates in his judgment that the agreement was one-sided and wasn’t a fair for consumers.
CBC的 go public节目就此采访了一位业内分析家，他对代理合约的公平性表示担心，并呼吁进行改革。
Don Campbell, author and senior analyst at the Real Estate Investment Network likens the situation to one where consumers are required to pay their first car seller they’ve met if they buy car anywhere in the city.
“If the realtor on the other side, all they did was to get that document signed, they are going to get paid whether you buy a house tomorrow or 15 months from now. That is seriously not right," he told the CBC.
"Does it need to change? Yes. Does it need to be more specific? Yes. From the real estate boards across the country they have to find a way to make it more fair for the consumer.”
Note: The story was published in Chinese News in May, 2015.
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