Humber/Ontario Real Estate Course 2 Exam Practice

What is true about a holdover provision in a listing agreement?

1. It applies regardless of when the buyer is introduced to the listed property.

2. It is most commonly found in agreements of purchase and sale.

3. It typically ranges from 60 to 90 days but can be longer.

4. It extends the termination date of the listing agreement.

5. It applies only if the seller renews the listing agreement before it expires.

6. It is optional and depends on the exclusivity of the listing agreement.

The correct answer is: It typically ranges from 60 to 90 days but can be longer.

In a real estate context, a holdover provision in a listing agreement refers to a clause that allows the listing brokerage to continue earning a commission for a certain period after the listing agreement has expired. The provision typically ranges from 60 to 90 days but can sometimes be longer depending on the terms negotiated between the seller and the listing brokerage. Option A is incorrect because a holdover provision does not apply regardless of when the buyer is introduced to the listed property. Option B is incorrect as holdover provisions are typically found in listing agreements rather than agreements of purchase and sale. Option D is incorrect as a holdover provision does not extend the termination date of the listing agreement. Option E is incorrect as the application of a holdover provision does not depend on the seller renewing the listing agreement. Option F is incorrect as holdover provisions are not optional and are usually included in listing agreements to protect the interests of the listing brokerage.