By Don Procter

A three-judge panel of the Ontario Court of Appeal has upheld a decision by the Ontario Superior Court of Justice to award Burlington-based Apex Results Realty more than $155,000 in unpaid commissions plus costs for the purchase of two Mississauga properties in 2012.

The case first went to court in 2018 over unpaid commissions of 2.5 per cent to Apex salesperson Naeem Rahman, for two properties sold for about $5.5 million by defendant Sharief H. Zaman. Zaman’s closely held corporations Eminence Living Inc. and Higher Living Development Inc. were also named as defendants.



Rahman and Apex Results had a real estate contract with Zaman and his corporations under a buyer representation agreement (BRA) – a standard form used by real estate brokerages and their sales representatives throughout Ontario. Rahman met all of the contractual obligations of the BRA, Bob Van de Vrande, broker of record, Apex, told REM.

Seminal to the court decision is that the BRA contract was upheld, says Walter Wellenreiter of Wellenreiter LLP, Apex’s lawyer. “It protects their commission fees when dealing with people who attempt (in bad faith or otherwise) to cut them out of a deal,” thereby breaching the BRA.

“It’s a commercially significant decision,” Wellenreiter added. He says sales reps and brokers “need to know how important it is to sign the document (BRA) and do it properly because then it is enforceable.”

Van de Vrande, who is unaware of any decision like it over a commercial deal, said the ruling is “very important” for the real estate industry.

The Ontario Court of Appeal upheld the Superior Court of Justice ruling to award Apex the commissions of $155,092 and court costs of $58,855 plus interest and an additional $8,000 in costs.

The motion judge dismissed Zaman’s argument that the summary judgement was inappropriate because he counterclaimed for substantial damages based on alleged negligence on the part of the respondent. The motion judge said: “Counsel did not make any submissions to the court with respect to the disposition of the counterclaim. Hence, I will make no ruling with respect to it.”

The case was originally heard last year when the judge rejected Zaman’s claims that “he did not understand the agreement because he suffered from dyslexia . . .”

The judge also threw out the defendant’s claims that one of the properties had a different buyer representation agreement and that “there were oral amendments to the agreement that the vendor would pay the commission” on the other property.

The judge also rejected Zaman’s claims that Rahman failed to inform Zaman that the commissions were payable as soon as possible after the sales as required by the agreement.

The appellate court “correctly” dismissed Zaman’s new claims because they had not been addressed in Superior Court, added Van de Vrande.

He says he is not aware of any other cases of this magnitude where the BRA was a keystone to the award.

At press time, Apex had not received any money from the defendant who has been “non-responsive” about payment. It will go to court for collection, Van de Vrande says. “We’re hoping to collect the funds on behalf of our salesperson in the next six months.”

His advice to real estate salespeople is to do their paperwork properly and keep detailed and accurate notes. Agents must make sure buyers are aware of his or her obligations and receive a copy of the BRA, he says.

11 COMMENTS

  1. I wrote this comment a couple of days ago but couldn’t decide whether to post it. I don’t want to sound like I’m criticizing; I haven’t seen the actual BRA, and only the relative people involved know what all it says in full.

    In the article:
    —-
    The judge also rejected Zaman’s claims that Rahman failed to inform Zaman that the commissions were payable as soon as possible after the sales [registration ???] as required by the agreement.
    —-
    (Key words: “as soon as possible AFTER the sales”)

    REALLY???

    Should say as an adjustment distribution “on closing” (as invoiced to the closing/registering law office…??? (Now it would appear this is a commercial transaction. Not residential; so perhaps the commercial BRA’s are differently constructed. Never having sold commercial real estate I can’t speak intelligently about commercial buyer agency contracts.

    WOW! If that’s what the wording was actually in the BRA that was looking clearly looking for trouble?

    Even with a judgement (summary or otherwise) it’s not always ultimately collectible.

    WOW!!! case in point as I do often have expressed: law offices, lawyers themselves and judges often do not understand BRA contracts or real estate procedures in general!!!

    Someone should have paid an “expert witness” to be part of the procedure !!! for sure.

    —- At:
    https://www.remonline.com/real-estate-brokerage-wins-years-long-legal-battle-for-unpaid-commissions-facing-appeal/

    The BRA stipulates: that we attempt to obtain the commission from the sellers or the sellers’ real estate brokerage but the buyer is responsible for the commission . . . if the seller does not pay,” he says. (See my comment above re lawyers and judges.)

    And … in the article:

    “What became problematic in this case is that our salesperson was excluded from the negotiations by the buyer (with the seller). He didn’t, in fact, know that the transaction was being done until after the closing date.”
    —-
    Somewhere in the article(s) it says the actual “negotiations” were to take place between the buyer and seller

    (minus the agent???)

    Was THAT actually in the BRA contract ???

    This is a most peculiar situation speaking to how little the public, the clients, the agents and brokerages including the legal apparatus set in place for the purpose of judging, knows about buyer brokerage in Ontario.

    It’s really scary that this particular case will go down as researchable evidence and evidentiary “fact” to be relied upon in future cases pertaining to Buyer Brokerage contracts in the Province of Ontario.
    —-
    Google definition: evidentiary

    n. in a trial, a conclusion of fact which is logically deduced from evidence (“evidentiary facts”). … It is essential to introduce the evidentiary facts during the trial in order to prove the ultimate fact.
    —-
    (Case in point)

    Carolyne L 🍁

    • I am having tremendous difficulty understanding what your point is. You may want to read the full case and article again as I really cannot understand your concerns. There was an expert witness who provided written evidence for the hearing. The buyer went outside the terms of the agreement and negotiated a deal on his own without informing his salesperson. The BRA specifically precludes a buyer from doing so.

      • I am merely commenting on buyer agency in general. It seems so misunderstood, even after 25 years as a procedural system in the real estate world. As I stated, I’m not criticizing. One part in particular where it says someplace that commissions will be paid “as soon as possible…” seeming to be a nebulous (vague) term in a business where deemed explicitness is required in so many aspects.

        I apologize if I misread or misunderstood the intent within the structure of the BRA. But pleased to know you will collect your due.

        Respectfully
        Carolyne L

    • Carolyne:

      The problem with the ABR and the customer service contract is that buyer consumers have no idea about why they must sign a form to buy a house. The form only benefits the Realtors. It does not protect the consumers. The existing ABR form locks consumers into working with an agent and protects the commission. That’s it! If a consumer signs an ABR form there should be a clause in the agreement that states that the agent and or the consumer can cancel the agreement at anytime if they no longer wish to work together. Also the buyers, if they are signing a ABR should determine their own fees to be paid to their agent. The buyers should not allow the sellers to set the fee paid to the buyer agent. I expect that most agents explain to the buyer consumers that there is no cost for their services. It is FREE. The sellers pay the fees. It is true that the fees come out of the transaction, but having the sellers and their agents set the fees that the buyers will pay makes no sense at all. I expect in the case discussed that the sellers determined what the buyer agent was to be paid and that the buyer probably didn’t understand that they could set their own fees and save themselves thousands. Buyers need to be better educated so they can make informed decisions. Saving just 1/2% on say $500000 is $2500. For a city like Toronto with say 9000+- sales in a month the savings for the consumers would be in the millions. What are the savings over a year? Perhaps the total fees on any ABR or listing agreement should be expressed not just in percentages but in real dollars. 4% on $500000 doesn’t sound like much, but $20000 certainly makes one sit up and ask some questions. What if Realtors had to say to the buyers before they signed a contract – “I will work hard in helping you find your dream home and it will only cost you $20000”. And the buyer would say “I thought your services are FREE”. D

      • Oh my goodness, David. Surely this is part of the problem…
        representing a buyer is “not” free by any definition of the term. The protection for the buyer is that a buyer-agent is dedicated to them and their transaction and carries insurance to protect the buyer. The agent’s fiduciary duty is to that buyer. Of course a contract protects the interest of the buyer. The agent takes his instruction FROM his buyer.

        There has always been a hangover of sub-agency behind the veil. It has been really hard for historical agents to break away from sub-agency thinking.

        It might have been considered a free service in sub-agency days, but part way through 1995, all the rules and procedures (at least in Ontario) changed. Buyer Brokerage was born. Maybe still-born. Not meaning to sound disrespectful or facetious. But it’s never been able to stand on its own two legs, creating massive confusion for the public, for the industry and especially for the press. And in the world of the Internet we know that if something is on the Net, it MUST be true, right? (Wrong, of course.)

        That’s one of my chief industry beefs, that although we are licensed/registered provincially the mother ship is in Ottawa. CREA is federal. Yet there is no consistency across Canada that the buying public can relate to or rely on (particularly if relocating from one provincial domicile to another, finding different methods, rules, regulations everywhere; sometimes even in contiguous domiciles).

        Truly there needs to be common ground and definitely there isn’t (and likely never will be).

        I never had a problem with buyer brokerage because I discussed in finite language detail before obtaining a BRA (or a horse by any other name is still a horse). I commonly referred to the buyer contracts as BBA (buyer broker agency).

        Right from the get go my buyers knew they were free to exit their agreement at any time. I had the same privilege. Never happened. But here is what some colleagues couldn’t figure.

        I typically didn’t say “this what you pay.” Not in percentages or in dollars.

        Instead I said: “this is what I charge.” Semantics? Absolutely not. This is my “fee” for “representing you.” XYZ. Is my fee negotiable? Mostly not. If a lawyer says he charged $675 per hour, that’s what he charges unless there is some unusual reason to adjust his fee. No one calls that price-fixing in a firm that has twelve hundred lawyers across the country.

        If per chance the seller of any property you might choose to buy has chosen to pay the agent bringing an offer any amount that doesn’t equal “what I charge,” you will be required to top up the missing amount.

        I repeat: THIS is what “I” charge to represent you, to work hard to locate for you the property closest to your wish-list at a price that is fair market value and falls within your instructions to me, presuming the seller agrees to accept your Agreement of Purchase and Sale contract that is subsequently firm and binding on all parties.

        Typically I will invoice the listing office for the amount stated on the listing brokerage MLS offering, but if that amount does not coincide with “what I charge,” you will be responsible for the differential.

        Your closing lawyer (here all registrations changing ownership of any property can only be registered by a law office) will receive a copy of any differential invoice amount that he can use to calculate adjustments needed to close the transaction.

        A copy of the BBA contract will accompany my invoice. Along with whatever other adjustments your lawyer instructs you to bring funds to his office in order to close will be my invoice.

        For the portion of the commission offered on the MLS, the listing brokerage will receive my invoice that they will pay once closing funds are received. Some Boards used to stipulate that broker to broker invoices must be paid with ten days of having been paid by the associated law office. I don’t know if that still applies. Some brokerages took ages to pay colleague invoices and others paid immediately.

        When other brokerages sold my listings I hand-delivered their invoice payment the same day the relative law office paid me.

        Neat. Tidy. Professional. No problem. Not ever.

        To buyer: Please sign here. Press hard. There are three copies (used to be); the third copy is yours.

        I worked so differently from other agents. But it worked for me. The key and the magic if you will, was in taking the allotted necessary time to be sure the buyer understood. If ever he didn’t, I instructed: “go home and think it over.” I never knew one not to come back. They knew they were working with the best and fees are discriminatory based on strength of negotiating skills and plenty of references that said proof of the pudding is in the eating.

        Here is a copy of thank you from one of my most difficult buyers (only because he had been given bad advice from other agents).

        = = = The buyer’s wrote:
        “It was with great determination that Carolyne was able to find our dream home. We had several requirements and she was able to guide us through the different neighbourhoods showing us the best places to live.

        Carolyne seemed to know when there was a valuable place nearly ready to be shown. The timing was crucial for us to visit and make an offer on a house that had another offer at the same time. Her advice made our offer stand out and we were able to buy our wonderful place.

        It is beautiful to sit in the backyard and hear all the birds. This place is very special, you were correct in this aspect. We know that we have a wonderful location, acquired at the right price.

        We are thrilled with our purchase . . . and are certainly in your debt. We basically made a windfall of 10’S of thousands of $ in one night due to your efforts. You told me that you earn your fees and you were not kidding . . . I sensed that you were for real

        Our house is perfect and we would not be there if not for you. You seemed to know it was the one for us and made sure we considered it. Homes like ours are rare and becoming more so as you know. I love it so much I often go home for lunch just to enjoy my property! Best buy I ever made. (Max added)

        Thank you Carolyne.”

        ===
        They topped up the MLS seller’s commission offering, but initially balked strongly at having to sign a BBA. The only time I had encountered hesitation. (Story in full at Carolyne’s Clients Speak on website.)

        David, you are in an anomaly situation with Manitoba being governed under the securities commission. Forgive if I am wrong and have you confused with someone else.

        Respectfully
        Carolyne L

      • David,
        Touches on the greatest fraud ever perpetuated on the Canadian consumer. If the public ever became educated on this fraud 100,000 CREA members would disappear over night. The remaining 33,000 would be empowered to handle 25 deals each a year (two per month) and be able to lower their service fees by 2/3s while delivering superior service and professionalism.

        CREA and the Franchise Brands of course fear that day and since 2000 have done every single thing possible to prevent this Revolution in the Brokerage industry from happening. Instead we get 75,000 members who will not sell one single home in 2019. It is really insane.

        Of course we hear Altus now has access to your data. Did any membership in Canada vote on a member to member basis to hand over MLS data in this way? Nope….CREA did it the old fashioned way….scare you into hiring Governance consultants who in turn scare your board with nonsense who in turn pray to CREA for help who in turn uses it to gain your data.

        This court case was incompetent as is the industry that tells buyers they get FREE services.

        • Nelson, if you talk with consumers about agency and fiduciary duties etc. they have absolutely no clue about what you are saying. Today when an agent meets the buyer and seller consumers they hand them a brochure that outlines why they need to work with an agent and then have them sign the form stating they have read it and understand it. As a buyer would you sign a ABR? There are 100000+- agents in Canada and they all want to be able to list properties and also work with buyers. Will agents refuse to show consumers their own company listings to avoid DUAL AGENCY. I doubt it. There is no way under the existing brokerage system to eliminate DUAL AGENCY. Assigning a designated agent is just another way to try and fool the consumer so that a broker can sell their own listings and double end the commissions. Under the existing system perhaps in a DUAL AGENCY situation the real estate fees should be reduced by 1/2. Why not, in DUAL agency there is a reduction in the level of representation and service. What was promised is not being delivered. Just creating another form won’t work as it would be designed to protect the agent and not the consumers.

          The way real estate agents are paid needs to be changed. For example, why should one consumer listing with Broker X pay say $25000 (5%) to sell their $500000 home while another consumer listing with the same broker pays say $20000 (4%). That equates to a $5000 loss in one of the consumers equity position or $5000 that they no longer have to purchase their new home and reduce their new mortgage by $5000, and they both listed with the same broker. Not all consumers are good negotiators so some end up paying thousands more in real estate fees for the same service others are receiving for thousands less. If each brokerage had to advertise their listing and buyer agency fees and services to the consumers then we would have TRUE competition within the industry and yes far fewer agents which would better serve consumers. Should brokers be required to advertise their fees and services on their websites so consumers can make an informed decision?

          Today consumers are lead to believe that all or most brokers charge the same fees that are split 50/50. Here are some quotes taken from the internet –

          Buyer’s do not pay commissions to their realtor, because once you find your home and the deal is sealed, the seller will be the one paying your realtor. This makes these services free to the buyer, which is why hiring a realtor is an even better idea – their experience, education, and time is all free!

          You should offer a commission that is consistent with what’s being offered in your area. For comparison, ask your listing agent to show you all of the broker full listings, as this is where the commission rates are

          According to the industry standard in Ontario, the seller typically pays 5% commission on the final sale price of a property to the listing and buyer’s agents.

          Commission is usually evenly split between the seller’s agent and the buyer’s agent – typically 2.5% to the seller’s agent and 2.5% to the buyer’s agent.

          The industry standard in Ontario traditionally hovers at 5%.

          The rate of percentage is traditionally divided down the middle between the buyer’s and seller’s agent.

          Billions of dollars could be saved by consumers across Canada if the real estate industry changed the way brokers and agents were paid. Doing so would create TRUE competition within the real estate industry. Real estate fees are negotiable by law. I am not saying that we need a fixed rate for consumers, however, with the thousands of agents in Canada the seller and buyer consumers need to be able to make informed choices for the services and the cost of those services.

      • Shaking my head over several statements in your post:

        1) Every contract can be broken, there is no right to unilaterally lock any party into a contract. The remedies for breaking it is often found in reduced compensation. Can you break your wireless or cable tv contract without penalty? Can you back out of a firm agreement to purchase property unilaterally? No! and that’s a contract as well.

        2) A BRA is a performance contract. A buyer who feels that their representing brokerage did not perform as agreed has every right to sue for failing to carry out the terms of the contract. I actually recall reading about a case where a seller successfully sued the listing brokerage on such groounds. The judge ruled the brokerage did not carry out their contractual obligations.

        3) A BRA does in fact protect a consumer – it cements and memorializes in writing the fiduciary duty the brokerage must provide. Failing that the buyer who wants to sue the brokerage for neglect of duty has a steep uphill battle to climb. Additionally the brokerage and broker can be found liable for whatever loss a buyer may incur due to neglect of duty – they’ll get nothing where they can’t show fiduciary duty was owed.

        4) Unless a brokerage control their members and insist on a minimum fee, the buyer does not in fact have to have the seller set the fee. In today’s climate and speaking for Ontario where buyer reps are offering to return as much as 90% in rebates to buyers, the buyer is in fact setting their representative’s compensation.

        5) (in Ontario), the fee is being paid by the listing brokerage where one is involved and billing it to accordingly. The little talked about reason this still prevails is that the cost to a buyer is built into any mortgage financing they would need since lenders will not advance as part of the mortgage, a fee of any sort.

        I agree with you in two regards though – the industry should stop telling buyers their cost is free after all, the BRA (in Ontario) says a buyer will top up any deficiency received from the seller/listing brokerage is expressly indicating otherwise and, buyers do need to be better, that is, properly, educated.

        It’s obviously well past overdue that the industry’s education start properly educating entrants and members so that they understand the industry isn’t special. That real estate representation isn’t exempt from the laws every other contract is subject to.

        • PED would you agree that dual agency is a reduction in the level of service for buyer and seller consumers? D

  2. Case Law established that was obviously rooted in the courts and the defendants own legal team’s ignorance of Buyer Agency.

    Organized Real Estate has gone to great strides to protect their members and allow partially fulfilled Buyer Agency Agreements to generate commission earnings will be the downfall of the current Brokerage Desk Rental Model.

    A quick review of Rahman’s sales history shows he was in no way qualified to sign this agreement and it is highly likely his lack of qualifications were never disclosed to the Buyer.

    Was the Buyer genuinely dyslexic?
    Were their genuine verbal terms ever once mentioned?

    This was just another example of an incompetent Buyer Legal Team who clearly should have called Barry up for expert testimony.

  3. I encountered a non-payment of Buyer-Broker commission. I had complete log, along with every document, (copies of MLS listing, with showing request, time, LBX #, comments, etc.). I went to small claims court (despite my manager’s non-supportive role). The judge advised the defendant’s know-it-all family member, to make a deal, (otherwise, if it goes to court, you will end up paying much more). I got paid.

Leave a Reply