Humber/Ontario Real Estate Course 2 Exam Practice

ABC Realty Inc.'s original listing agreement expired, but the property was sold during the holdover period by another brokerage. What is ABC Realty Inc. entitled to?

1. A claim on a 3% remuneration rate

2. A claim on a 2% remuneration rate

3. A claim on a 1% remuneration rate

4. No claim for remuneration as it was sold by another brokerage

5. No claim for remuneration as the sale closed after holdover period

6. A claim on a 4% remuneration rate

The correct answer is: A claim on a 1% remuneration rate

During a holdover period, if a property listed by a brokerage is sold by another brokerage, the original listing brokerage (ABC Realty Inc. in this case) is entitled to a claim on a reduced remuneration rate. In Ontario, during a holdover period, the original listing brokerage is entitled to a 1% remuneration rate on the sale of the property by another brokerage. This is specified under the Real Estate and Business Brokers Act, 2002, which governs real estate transactions in Ontario. Option A, B, F are incorrect as they suggest higher remuneration rates than what the original listing brokerage is entitled to during the holdover period. Option D is incorrect as the original listing brokerage is entitled to a remuneration claim, albeit at a reduced rate. Option E is incorrect as the entitlement to remuneration for the original listing brokerage is based on the property being sold during the holdover period, not on when the sale closed.