Humber/Ontario Real Estate Course 2 Exam Practice

If a property sale closes after the expiry of the listing agreement’s holdover period, what happens to the remuneration for the initial listing brokerage?

1. Initial brokerage is entitled to 50% of the new brokerage’s rate.

2. No remuneration is owed to the initial brokerage.

3. Remuneration is split equally between both brokerages.

4. The seller owes no other brokerage fees apart from the final one selling it.

5. A claim must be submitted by the initial brokerage within the holdover timeframe.

6. The initial brokerage gets 1% of the final sale price regardless of the closing date.

The correct answer is: No remuneration is owed to the initial brokerage.

When a property sale closes after the expiry of the listing agreement's holdover period, no remuneration is owed to the initial brokerage. This means that the initial brokerage will not receive any commission or payment for the sale of the property that occurred after the holdover period has ended. Option A is incorrect because the initial brokerage is not entitled to 50% of the new brokerage's rate. The initial brokerage is not entitled to any remuneration in this scenario. Option C is incorrect as well since remuneration is not split equally between both brokerages in this situation. The remuneration is not owed to the initial brokerage after the holdover period has expired. Option D is also incorrect because the seller may still owe fees to other brokerages apart from the final one selling the property. However, in this case, the initial brokerage is not entitled to any remuneration after the holdover period has ended. Option E is incorrect because a claim does not need to be submitted by the initial brokerage within the holdover timeframe. The lack of remuneration to the initial brokerage is determined by the terms of the listing agreement and the holdover period. Option F is incorrect because the initial brokerage does not automatically receive 1% of the final sale price regardless of the closing date. The payment to the initial brokerage is dependent on the terms of the listing agreement and whether the sale occurs within the holdover period.