What does ridiculous mean?
While I’m sure we could find some synonyms with relative ease, defining the word is a bit more difficult.
Then again, examples are always worthwhile.
The Buffalo Bills blowing a late lead in spectacular fashion on Sunday with a Josh Allen fumble and a Josh Allen interception – that’s ridiculous.
Putting my 3-year-old son down and saying, “Don’t go anywhere” right as they’re about to cut the cake at a birthday party, and expecting him to remain by my side – that’s ridiculous.
A listing agent telling me, “Don’t forget, our offer day is Tuesday,” on their sixth listing, over five months, and this marking the second time they have under-listed the house and held an offer night – that’s ridiculous.
But when I read an article from Real Estate Magazine (REM) on Friday night, I literally said aloud, as I enjoyed a scotch alone in my basement, “That’s ridiculous.”
I read the article twice.
No joke.
It didn’t make any sense to me, and while there’s always a good chance that scotch on an empty stomach can lead to confusion and a lack of spacial awareness, the second reading of this article proved that it wasn’t the scotch after all.
Ridiculous.
There’s no other way to describe this article, and while I realize this will elicit a lot more “Real estate agents suck” reactions, I don’t care.
It’s just too ridiculous not to share.
Plus, I had a special guest blog planned for Monday, but somebody decided to stretch their guest blog into an 8,000-word short story, and we’ll have to leave that for next week or the week after.
So this morning, I’ll let this article, the ridiculousness therein, and some of your reactions do the talking.
“Agent Sues For Commission On Unaccepted Offer”
REM Online:
November 10, 2022
Often, an agreement to purchase real estate will have a conditional period to allow for various steps to be completed by either the buyer or seller.
An appeal decision in Ontario’s Divisional Court affirmed that a party cannot generally sue for compensation under an agreement until it is firm and binding. This principle applies to real estate agents seeking to recover a commission as well as the parties to the conditional agreement, as demonstrated by Covenoho v. HomeLife Response Realty Inc.
The decision arose from a dispute between a real estate agent and two brokerages. In January 2019, the agent executed an Independent Salesperson’s Agreement with a brokerage, Right at Home, and was provided with a salesperson’s manual.
In June 2020, a property in Mississauga, Ont. was listed for sale on MLS for $799,800.00. The agreement to list the property was signed by the listing brokerage, Homelife, and the owners of the property.
The agent presented a conditional offer on behalf of some prospective buyers to purchase the property for $805,000. The offer contained conditions for the buyers to arrange financing, conduct a home inspection, and confirm they could obtain insurance.
If the property had been sold to the agent’s clients, she would have been entitled to a portion of the sales commission because she would have been the cooperating broker. Unfortunately for the agent, the sellers did not accept the conditional offer. Despite this development, the agent demanded that Homelife pay her the cooperating brokers’ portion of the real estate fees. Homelife understandably took the position that it was not required to pay the agent any commissions since there was no sale.
In response to a threat by the agent to commence a lawsuit against Homelife for the commissions, the vice president of legal for Right at Home advised that she did not have the standing to bring the lawsuit and that she was required to withdraw it. Further, the agent was advised that Right at Home believed they did not have any claim against Homelife for unpaid commissions either.
Undeterred by these developments, the agent commenced a lawsuit for the commissions. Shortly after, her Independent Salesperson’s Agreement was terminated by Right at Home.
In December 2021, a deputy judge of the Ontario Small Claims Court dismissed the agent’s claims against both brokerages. The agent then appealed to the Divisional Court.
On appeal, while the agent raised numerous issues about the real estate industry in general, the court focused on what actually took place between the parties from a legal standpoint.
The appeals court found that there was never a binding purchase and sale agreement between the buyers and sellers. For parties to agree on the contract terms, they must have reached the same understanding as to the essential terms of the agreement.
In this case, the sellers had listed their property for sale, which was, at most, an expression of interest in selling and an invitation for offers.
The agent argued that her clients’ conditional offer to purchase the property was an “interim acceptance” of the seller’s offer to sell. However, this position was contrary to Canada’s well-understood principles of contract law.
In the court’s words, “a conditional offer is not a valid offer.” An offer conditional on certain events or conditions coming to pass may only be completed if those happen. Here, the buyers may not have been able to obtain financing or insurance, in which case they would not have been required to complete the purchase.
The agent argued that Right at Home was negligent in not suing Homelife to obtain her commission. The court rejected that argument since, under the listing agreement, even if the sellers had an obligation to accept an offer such as the one tendered by the agent’s clients, the only party that could enforce that obligation was Homelife.
The listing agreement was a contract between Homelife and the sellers. The agent and Right at Home had no rights under the listing agreement. Nothing in any of the applicable rules, regulations or policies imposed a legal obligation on the sellers to accept the offer.
The agent asserted that she was being “denied access to justice” because her claim against Homelife was not pursued by Right at Home. However, a person who does not have a valid claim is not being denied access to justice simply because a third party refuses to advance that claim on their behalf. The court noted that Right at Home was within its rights not to advance the agent’s claim and to terminate her position under the Independent Salesperson’s Agreement.
The agent was not denied access to justice since her claim was adjudicated at both the trial and the appeal level.
As a result, the appeal was dismissed by the Divisional Court.
The decision shows that an agent is not generally entitled to recover a commission that would have been payable had a conditional offer become firm and binding. This result may be unfortunate to an agent who puts a substantial amount of time and effort into assisting clients with putting forth a conditional offer. Still, it reflects well-established principles of contract law.
Absent a binding contract, formed by the fulfilment of all outstanding conditions, there are likely no valid grounds for enforcing a commission payment, and one should not have any reasonable expectations of compensation until an offer becomes firm.
Is this not one of the most ridiculous things you’ve read in a long, long time?
I wasn’t exaggerating when I said, “I read the article twice.” I kept thinking that there had to be more to this, but there wasn’t.
This is just an agent who feels he or she should be paid for no reason.
There’s no logic here, of course.
And as crazy as the lawsuit was, the fact that the plaintiff appealed the original ruling is even more fascinating.
The entire case can be found on CanLII here.
The appeal was bizarre. I read the whole thing too and while the REM article above summarizes both the original case and the appeal, reading the full appeal shines a light on just how bizarre this was.
I mean, the plaintiff/agent represented herself. That’s usually what people do in movies when they’re a bit off their rocker.
There were a few parts in the appeal that stood out to me.
First, there’s this:
The Appellant asserts that the Deputy Judge was biased because she did not consider all of the Appellant’s arguments and evidence.
The Appellant argues that, as a potential homeowner, the Deputy Judge would not want to prevent homeowners from being able to receive competing offers.
The plaintiff, or appellant in the appeal, is arguing that the original judge ruled against her because he could be a property buyer!
It’s always somebody else‘s fault!
But even more bizarre was how the appellant described her relationship with her brokerage, with respect to her contract:
The company has full control of the agent and the bank account but bars the agents tort claims even when the brokerage is the one doing wrong. It is self serving. It is neither smart, nor clever. It is unconscionable and resembles human trafficking. (emphasis in original)
Yikes.
I don’t know the agent, nor do I know the brokerage, nor do I understand their relationship. But I’d have a hard time believing that it “resembles human trafficking.”
But this was my favourite quote in the ruling:
…there is the Appellant’s assertion that she is being “denied access to justice” because her claim against Homelife was not pursued by Right at Home.
There are two problems with this argument.
First, a person who does not have a valid claim is not being denied access to justice simply because a third party refuses to advance that claim on their behalf. The decision that Right at Home made not to advance the Appellant’s claim was well founded on both the facts and the law.
Second, in any event, the Appellant has had her claim adjudicated at both the trial and the appellate level.
She has had access to justice.
Maybe the fact that my father was a lawyer and I grew up around this stuff is what makes it interesting to me, but those of you that are still with me – have you ever seen anything so ridiculous?
We’re living in crazy times, so perhaps we shouldn’t be so caught off guard by the sight of crazy.
Happy Monday, folks!
Ed
at 8:44 am
I hope that the agent had to pay a shitload of legal fees to Homelife and Right at Home.
sandrajacksonrealtor
at 7:59 am
She’s fighting those as well. Read my comment above.
Appraiser
at 9:16 am
The words frivolous and vexatious come to mind.
What a waste of precious court time.
Derek
at 12:09 pm
She may be a vexatious litigant, by the looks of the various lawsuits in her name.
Marina
at 9:46 am
David, parallel question.
What happens to the commission if the contract is actually signed (binding), but the buyers fail to close? So say the buyers bought for 1.7 million with a 100k deposit. Come closing day, there’s crickets and they say oopsie we can’t close.
I know the sellers keep the deposit.
I know the sellers can sue to recover any difference in sale price if the home will now sell for less.
But what happens to the commission the RE agents and associates would be getting on that $1.7 million?? Is it paid? Who pays it? And if that had been the case here, would the crazy plaintiff have a leg to stand on?
David Fleming
at 10:42 am
@ Marina
In the case where a buyer refuses to close, both agents can sue for the commission.
It’s happened and it’s been successful.
However, any time I hear this in real estate circles, I always tell people that it’s short-sighted and inappropriate. Despite what the law says, I think the minute agents start suing for commissions, that’s when the public will really turn on them (as though the public hasn’t turned already).
I’ve had one deal fail to close – in 18+ years. That wast almost 3 years ago and the deposit funds are still in trust pending litigation. It never ocurred to me to sue the buyer for commission, nor would I.
Marina
at 11:49 am
Thanks David.
So the seller would not be on the hook since the deal didn’t close. Good to know.
Ken Davenport
at 11:07 am
I seems she made her own Metaverse.
Ace Goodheart
at 12:46 pm
That unfortunate person probably ended her career as an agent. Anyone with a basic understanding of Google can now find her, and she has probably rendered herself unhireable.
Mike
at 3:02 pm
On the contrary. I think she’s targeting the lunatic crowd as her target market. Conspiracy theory, anti-vax, Qanon, they all go together. These people seek comfort in one another.
Jimbo
at 5:49 pm
Leave the Green Party voter’s out of this
J
at 9:11 pm
Seems this wasn’t the only lawsuit she’s filed against former employers:
https://www.canlii.org/en/#search/type=decision&text=JOSS%20COVENOHO&resultIndex=15
Kira
at 12:10 pm
A quick Google search reveals that this person sued a number of her previous employers always claiming wrongful termination and asking for multiple months or years worth of pay. She won once. Apparently she loves to sue and to represent herself. I wonder who will ever be enticed to be her employer…
Textile Buying House
at 7:47 am
Textile Unlimited Inc. with over 3 decades of experience is a quality promised Textile Buying House professionally managing the sourcing of textiles.
sandrajacksonrealtor
at 8:01 am
She still will not give it a rest.
https://www.canlii.org/en/on/onscdc/doc/2023/2023onsc168/2023onsc168.html
She’s relentless… but her advertising now reads
“I have strong knowledge of contract law, to protect you from lawsuits, loss, and distress.” Oh, the irony.
Joss Covenoho
at 8:11 pm
Yes, the Irony Ms. Jackson, is that you have never read your MLS rules, nor the listing agreement, while you are a licensed professional.
If you read Canlii, you will see the judge refuses to quote the MLS rules which allow our brokerages to fight the case on our behalf in court.
Are you able to tell me why Lamba would be paid in the Popova case for a valid offer, but not the agent, who procured him that offer, while the MLS rule states that a listing by making an MLS posting, makes an offer to the cooperating brokerage? Did you also miss the MLS Rules which state, that your brokerage can enforce the listing agreement, and that listing agreement states, that a seller must pay for ANY valid offer. Well the judge did too, but wanted to. MLS Rules were written to ensure that listings do not operate as auctions, with people bidding blindly, with conditions. Read the Lamba cases and the Wilaert cases. It cannot be that ONLY the listing agent is paid for UNACCEPTED valid offers, while a buyer’s agent bought that offer in. Buyer’s agents are exploited by listing agents, by ignoring MLS rules.
Are you aware that roughly 50% of all court decisions err, especially where a self rep exists, and especially when a minority is before them?
Read your MLS Rules, All of them, especially the ones starting with 7. A listing on MLS is an Offer to a Cooperating. A seller promises to accept ANY valid offer. The failure to accept results in a breach. In my case, the agent flatly stated he wanted more money than the listing price, while the buyer went above the listing price. He had no reasons, but if the seller did this to him, he could sue her in court, as Lamba did. A listing price is NOT an opening bid. Brokerages are not permitted to run auctions. NOT one agent, including you, has realized, that first come, first serve, truly applies in MLS listings. There is no reason why any buyer’s agent should be exploited by a listing agent, who had done their job. There is no other professional who is licensed, who works for free. There is NOTHING in any of our contracts which states we are working on contingency. The Agreement of Purchase and sale tells the buyer that their deposit will be used to pay the seller’s commission; this is the first part of how a brokerage sets both the listing agent and buyer’s agent to become unpaid for work done. You as a professional licensed realtor, have never read your listing agreement, and noticed that there are TWO offers there. 1 is an offer to sell the home. The other is an offer to pay a realtor. Completion is NOT required to be paid for procuring a valid offer; it is a courtesy, there is truly nothing that prevents a brokerage from immediately billing a selling for commission for the job done. A realtor’s sole job, is to procure a valid offer for a seller. MLS sells 93% of all homes, such that no other form of marketing is necessary. The listing agent will use MLS for the advertising component, and hope to procure a buyer himself, and ignore the offers of buyer’s agents. It is entirely exploitive, the only licensed professionals who are not paid for work done. Do you disagree that putting in valid offers, is work? and the work that was promised was done? The judges have made decisions for listing brokerages, who never turned around and paid the buyer’s agent who bought that offer. That is disgusting. The aim is to appeal to all levels until someone can actually read.
Kind regards,
Joss Covenoho
Joss Covenoho
at 8:24 pm
Yes, the Irony Ms. Jackson, is that you have never read your MLS rules, nor the listing agreement, while you are a licensed professional.
If you read Canlii, you will see the judge refuses to quote the MLS rules which allow our brokerages to fight the case on our behalf in court.
Are you able to tell me why Lamba would be paid in the Popova case for a valid offer, but not the agent, who procured him that offer, while the MLS rule states that a listing by making an MLS posting, makes an offer to the cooperating brokerage? Did you also miss the MLS Rules which state, that your brokerage can enforce the listing agreement, and that listing agreement states, that a seller must pay for ANY valid offer. Well the judge did too, but wanted to. MLS Rules were written to ensure that listings do not operate as auctions, with people bidding blindly, with conditions. Read the Lamba cases and the Wilaert cases. It cannot be that ONLY the listing agent is paid for UNACCEPTED valid offers, while a buyer’s agent bought that offer in. Buyer’s agents are exploited by listing agents, by ignoring MLS rules.
Are you aware that roughly 50% of all court decisions err, especially where a self rep exists, and especially when a minority is before them?
Read your MLS Rules, All of them, especially the ones starting with 7. A listing on MLS is an Offer to a Cooperating. A seller promises to accept ANY valid offer. The failure to accept results in a breach. In my case, the agent flatly stated he wanted more money than the listing price, while the buyer went above the listing price. He had no reasons, but if the seller did this to him, he could sue her in court, as Lamba did. A listing price is NOT an opening bid. Brokerages are not permitted to run auctions. NOT one agent, including you, has realized, that first come, first serve, truly applies in MLS listings. There is no reason why any buyer’s agent should be exploited by a listing agent, who had done their job. There is no other professional who is licensed, who works for free. There is NOTHING in any of our contracts which states we are working on contingency. The Agreement of Purchase and sale tells the buyer that their deposit will be used to pay the seller’s commission; this is the first part of how a brokerage sets both the listing agent and buyer’s agent to become unpaid for work done. You as a professional licensed realtor, have never read your listing agreement, and noticed that there are TWO offers there. 1 is an offer to sell the home. The other is an offer to pay a realtor. Completion is NOT required to be paid for procuring a valid offer; it is a courtesy, there is truly nothing that prevents a brokerage from immediately billing a selling for commission for the job done. A realtor’s sole job, is to procure a valid offer for a seller. MLS sells 93% of all homes, such that no other form of marketing is necessary. The listing agent will use MLS for the advertising component, and hope to procure a buyer himself, and ignore the offers of buyer’s agents. It is entirely exploitive, the only licensed professionals who are not paid for work done. Do you disagree that putting in valid offers, is work? and the work that was promised was done? The judges have made decisions for listing brokerages, who never turned around and paid the buyer’s agent who bought that offer. That is disgusting. The aim is to appeal to all levels until someone can actually read.
Additionally, to anyone in the public, when you are reading a citation, realize you don’t have the evidence and laws before you. Both judges so far have ignored both the evidence and the laws and stated what they want you to think. What you need to read is the factum, and look at the evidence. I challenge any person in the public to do this. From reading the MLS rules and the listing agreement, what would you continue to disagree with?
Kind regards,
Joss Covenoho