By Naeem Rahman
I am writing this follow up article for the story Burlington brokerage wins years-long legal battle for unpaid commissions, facing appeal published in REM in February, 2019.
In this article, I want to share my thanks to my brokerage and my legal counsel for helping in this long legal battle, and share a few of my experiences with my fellow Realtors. Here is a summary of what I have learned:
- Have a strong connection with your broker of record/your brokerage administration.
- Document client interactions in detail. Always have a Buyer Representation Agreement signed for your buyer clients.
- Record keeping and property visit journals are important to prove your work.
- If a legal battle is imminent, it be prepared financially and mentally.
- Keep following up with your legal team. Have regular cycles of follow-up communication.
If it were not for my broker of record, I would not dare to take on such a legal battle (albeit he gets a cut from what I make). He is the one who introduced me to my legal counsel, Walter Wellenwriter. There were times the legal process was extremely strenuous on me financially and emotionally. Bob Van de Vrande, broker of record of my brokerage, has a leadership quality you do not see in day-to-day work. He did not only what was legally required, but he also helped me to arrange financial support.
Today I am very proud and grateful to be a member of an amazing brokerage. Almost at the point of getting paid, I wanted to give up because of the strain on my health. Now that’s a thing of the past, but good memories of my support will remain. I strongly recommend having a good connection with your broker of record, it helps. They know a thing or two that can help you during the times of need.
Documentation is a must in the real estate business. In this case, having all transaction documents saved the day. The defendant tried to prove in every possible way there was no valid Buyer Representation Agreement (BRA) and that there was an extraordinary oral agreement for which he is not liable to pay. Fortunately, due to record-keeping and documentation, in every occasion my legal counsel was able to prove there was a valid BRA. There were three BRAs within a three-year stretch and none of the emails ever discussed an oral agreement.
From my experience, I know there is this hesitation among Realtors that asking for a BRA from buyer clients will turn them away. We try to get the BRA signed only when the buyer wants to put in an offer. It is much more important to learn how to present a BRA and get it signed, than wasting your time on a buyer who will leave you because they are not willing to commit. Fortunately, the listing process with sellers is less exposed to such risk due to the MLS requirements.
Record keeping and showing journals are important too. Document all your meetings by sending a summary email and preferably asking a question at the end to which the buyer needs to respond. This will ensure your meetings are documented and the buyer confirms reading the meeting minutes. Where possible, send documents to your buyer ahead of the time, even when you have to personally read it to them. This ensures you did not push the buyer at the very last moment to sign a document. When you are selling real estate, keep a record/ journal of every property you are showing with the date, time and addresses. If the buyer wants to do the transaction without you (in this case, the buyer went solo without letting the brokerage know), let the buyer know that you have full documentation of the showing. Communicate professionally; the minimum standard of a written document should be as clear as if it is publishable in a newspaper or on a billboard.
When you do not have a choice but to go through the legal process, prepare financially and emotionally. In this case, the legal process continued for over seven years. There were times things did not go as expected; my relationship with the legal counsel at times was a little frustrating. However, having a responsible legal counsel on your side helps in the long run.
It is important to have some funds aside to manage the legal battle. The legal counsel will need payment at certain points throughout the process as they have bills to pay while they work to protect you. Your estimated funds for litigation may not be sufficient but have plans for how you want to go about arranging more funds.
Keep following up with your legal team on the development of the legal process. Legal counsels are human like us, and they also struggle with daily time limitations and priorities. I suggest following up regularly in a courteous way. When you do not understand a legal process, always ask for details and timelines. Most times it is not predictable to an outsider. Following up is the name of the game. Do not hide any facts from your legal counsel.
As I’ve heard from my legal counsel and broker of record many times, this litigation has proved the power of the Ontario Real Estate Association’s Buyer Representation Agreement. This standard form protects buyers and their agents in the process of property purchases. The details in the form cover legal requirements thoroughly. If a Realtor follows the buyer representation process as expected, buyer and Realtor both can be assured of a positive outcome.