Humber/Ontario Real Estate Course 2 Exam Practice

What does a seller representation agreement with a holdover clause protect?

1. Ensures the seller above market price concessions.

2. Guarantees the broker-exclusive commissions even if the property sells after the agreement expires.

3. It applies to protections against latent defects for up to two years.

4. Ensures the client gets the final say in any transaction.

5. It mandates that the seller has continuous legal protection through the transaction process.

6. Requires the brokerage to cover legal fees if the sale falls through.

The correct answer is: Guarantees the broker-exclusive commissions even if the property sells after the agreement expires.

The correct answer is B: Guarantees the broker-exclusive commissions even if the property sells after the agreement expires. In this scenario, a seller representation agreement with a holdover clause is designed to protect the broker's right to receive a commission on the sale of the property even if the sale occurs after the agreement has expired. This clause ensures that the broker is entitled to the commission as long as the sale is made to a buyer who was introduced to the property during the term of the agreement. The other options are incorrect as they do not accurately represent what a seller representation agreement with a holdover clause specifically protects. For example, option A does not relate to price concessions, option C discusses latent defects which are more related to property condition disclosures, option D refers to client decision-making rather than commission protection, option E talks about legal protection, and option F mentions legal fees which are not directly related to the holdover clause in the agreement.