Buyer Representation Agreement (OREA)

AJ Lamba Realty v Crainic, 2016 ONSC 4153 (CanLII)

REASONS FOR JUDGMENT

[7] In his Reasons for Judgment the learned trial judge set out the following, in part: “The Court:

The parties entered in a buyer representation agreement dated the 11th of May, 2012, wherein the defendant agreed to pay 2.5 per cent commission on any house purchased during the term of the agreement, which was from the 11th of May, 2012, to the 30th of September, 2012.

The defendant purchased a house through another real estate agent on the 2nd of August, 2012. The plaintiff claims for lost commission due to the breach of this agreement in the amount of $10,750.

The defence pleads that he believed he was signing with ReMax, not the plaintiff. He believes he did not realize the term of the agreement, although he admits to signing and that he had an opportunity to review it. The evidence also discloses that the defendant signed a separate document acknowledgment the signing of the terms of the buyer representation agreement.

I accept the evidence of the plaintiff, that the agreement was explained and that the defendant indicated he understood the terms from his previous purchase. The defendant states he thought the term had expired. I do not accept the defendant’s evidence. I find that he knew the terms of the agreement, that he was aware of its currency when he purchased. The emails in August and the timing of the purchase are strong evidence of his state of mind. He admits that he received a reduced price on the purchase and a reduced commission on his sale by using the vendor’s agent.

I find therefore, that the defendant knew and understood the terms of the buyer’s representation agreement, that he knowingly breached the agreement, and is liable for the lost commission in the amount of $2,750 [sic].

Mr. McKechnie: It’s 10,750.

The Court: Ten thousand, seven hundred and fifty.”

[12] The trial transcript does not disclose that any exhibit was filed at trial confirming that the Appellant’s wife had signed the Agreement of Purchase and Sale. In any event, the Appellant never advanced an argument at trial relating to that issue and it is clear from the learned trial judge’s reasons that such an issue was never in play at the trial.

[13] The appeal is therefore dismissed.

York National Realty Inc. v. Jackson, 2019 ONSC 2033 (CanLII)

[68] It is important to note that an agent can ask the buyer to sign either a Buyer Representation Agreement (BRA) or a Buyer Customer Service Agreement (BCSA). When a BRA is signed, the brokerage acts as the buyer’s representative and owes the client a fiduciary duty.

[70] The BRA and the BCSA create two distinct relationships with different legal obligations. An agent cannot be both a buyer’s agent and a buyer’s customer service representative. The buyer is either a client or a customer. It is obviously important for the brokerage to get the buyer to sign the correct agreement that accurately reflects the intended relationship between the parties.

Team Realty Inc. v. Kanata 1075 March Road Project Inc., 2012 ONSC 1255 (CanLII)

[157] I do not accept as credible Mr. Adada’s testimony that he did not receive a copy of the BLG letter of December 15th until after the transaction closed on December 20, 2008.

[158] During his testimony, Mr. Adada agreed that he made no objection to the multiple representation until this proceeding was commenced.

Real Estate Industry Practice, the Real Estate and Business Brokers Act, S.O. 2002, c. 30; Code of Ethics, and Industry Rules and Regulations

[159] At trial I permitted the plaintiff to call an expert on practice and standards within the real estate industry. The expert is Mr. Louis Radomsky, B.A., LL.B. Mr. Radomsky’s curriculum vitae is attached as Schedule “A” to these Reasons. In doing so I allowed him to testify concerning the various relevant forms employed within the industry and the applicable rules of conduct and ethics of real estate brokerages and salespersons. In my ruling I made it clear that it was my task, not Mr. Radomsky’s, to draw the necessary legal conclusions. In my opinion, Mr. Radomsky’s testimony was professional, fair, and helpful to the court on matters of practice within the industry. In my ruling I relied on Krawchuk v. Scherbak 2011 CarswellOnt 3015, [2011] ONCA 352. In that case a purchaser of a house sued, among others, a real estate agent for failure to verify information provided by the vendor concerning the property in question. One of the issues on appeal was the trial judge’s finding on the standard of care demanded of the real estate agent. The trial judge had refused to admit expert evidence on this issue. At para. 125 the court said:

… The translation of that standard into a particular set of obligations owed by a defendant in a given case, however, is a question of fact (Wong, at para. 23; Fellowes, at para. 11). External indicators of reasonable conduct, such as custom, industry practice and statutory or regulatory standards, may inform the standard. Where a debate arises as to how a reasonable agent would have conducted himself or herself, recourse should generally be made to expert evidence.

[160] The Court of Appeal went on in paras. 126-133 as follows:

[126] In Ontario, real estate brokers and salespersons are required to be registered under the Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sch. C in order to trade in real estate as an agent or broker. At the time of the transaction at issue in this case, the conduct of real estate agents and brokers in Ontario was governed by the Real Estate Council of Ontario's Code of Ethics, 1998 (the "Code").

[127] Counsel for Ms. Krawchuk tendered the Code into evidence to assist the trial judge in determining the standard of care by which Ms. Weddell's conduct should be measured. While the trial judge accepted this evidence, he refused to admit the expert evidence that Ms. Krawchuk's counsel sought to introduce in order to explain the duties of a real estate broker when acting under a dual agency agreement and the requirements of various documents, including the Code. The main basis for the trial judge's refusal to admit the evidence was his view that he did not need the assistance of an expert to determine whether Ms. Weddell met the requisite standard of care: the Code was before him and he was competent to determine, on his own, whether Ms. Weddell had complied with a particular provision. [page627]

[128] Unfortunately, however, the trial judge did not refer to the Code in his reasons. In fact, he did not address the standard of care that applied to Ms. Weddell's representation of Ms. Krawchuk at all, save for the reference at para. 67 of his reasons where he said that "there was no obligation on Ms. Weddell to inquire further or independently of [the Scherbaks] to discern what if any other structural defects might exist".

[129] In my opinion, in the particular circumstances of this case, the trial judge erred in concluding that he could identify the applicable standard of care without the benefit of expert evidence. This error was compounded by his failure to identify the standard of care that he thought was applicable and by his failure to address the import of the Code in relation to the question of the governing standard of care.

[130] The jurisprudence indicates that, in general, it is inappropriate for a trial court to determine the standard of care in a professional negligence case in the absence of expert evidence. See Zink v. Adrian, 2005 BCCA 93 (CanLII), [2005] B.C.J. No. 295, 37 B.C.L.R. (4th) 389 (C.A.), at para. 43, Southin J.A., concurring; Gauvreau v. Paci, [1996] O.J. No. 2396 (C.A.), at para. 1; Precision Remodeling Ltd. v. Soskin, Soskin & Potasky LLP, [2008] O.J. No. 2560, 2008 CanLII 31411 (S.C.J.), at para. 57; Dinevski v. Snowdon, [2010] O.J. No. 2516, 2010 ONSC 2715, at paras. 68-69; Adeshina v. Litwiniuk & Co., 2010 ABQB 80 (CanLII), [2010] A.J. No. 125, 24 Alta. L.R. (5th) 67 (Q.B.), at paras. 160-75. [I pause to observe that I am aware that the action at bar is not a professional negligence case. However, these comments are, nevertheless, helpful].

[131] In Walls v. Ross, [2001] B.C.J. No. 1641, 2001 BCPC 187, at paras. 66-74, Stansfield A.C.J. offers a lengthy discussion of the circumstances in which expert evidence will be necessary to define the standard of care in the real estate professional context:

Counsel for the realtors in this case argued I could not find negligence in the absence of expert evidence as to the standard of care the law requires of realtors in circumstances such as those disclosed by the evidence in this case. The claimant did not call any such expert evidence.

In Roberge v. Huberman [(1999), 172 D.L.R. (4th)] it was argued that absent expert evidence there was "no evidence" upon which the court could determine the standard of care in a solicitor's negligence action. Esson J.A., said:

(at para. 54) the trial judge referred to no authority in support of the proposition that, without expert evidence as to the "appropriate documentation", there was no evidence of breach of the standard of care. In this court, the defendants made no effort to support that conclusion. In my respectable view, it cannot be supported.

(and at para. 58) . . . What the court was called upon to do . . . was to consider and assess, with the assistance of counsel's submissions, any evidence that was adduced by the plaintiff which was potentially [page628] relevant to the question whether there had been a breach of duty by the solicitor. That process involves the court applying its experience and knowledge in the way that judges and juries do every day, most often without expert evidence.

It is clear there can be cases in which expert evidence is not required to prove a realtor's failure to meet what the court will determine to be the standard of care expected of realtors in particular circumstances. An example is Brown v. Fritz, 1993 CanLII 1475 (BC SC), [1993] B.C.J. No. 2182 (B.C. S.C.), about which I will say more in due course.

It seems that whether expert evidence is or is not required is a question which falls to be determined on the facts (and most especially, one imagines, the egregiousness of the conduct or the very specialized or technical nature of the activity) in the particular case. So, for example, in Shaak v. McIntyre and others, [1991] B.C.J. No. 2607, Sept. 6, 1991, Vancouver No. A852424 (B.C.S.C.) Madam Justice Ryan (then of the trial court) dealt with a case of alleged negligence by a solicitor for failing to advise a plaintiff to obtain a survey certificate where the plaintiff called no evidence of the standards of the profession in that regard. She observed that:

[T]here may be cases where the defendant has so clearly fallen below the standard required of him or her that expert evidence is not required

although she said on the facts before her that "this is not one of those cases".

In Haag v Marshall (1989), 1989 CanLII 236 (BC CA), 61 D.L.R. (4th) 371 (B.C.C.A.), Mr. Justice Locke, concurring with two others in the result in a case of alleged solicitor's negligence, said:

[t]he professional evidence led in this case was unsatisfactory . . . nowhere was it said that what was not done fell short of a professional standard of conduct. In cases of professional negligence above all, with the many difficult and varied situations met, if a plaintiff hopes to succeed on the grounds of lack of competency it must be fairly demonstrated that it has fallen below an established standard or practice in the profession.

To similar effect in Mileos v. Block Bros. Realty Ltd. and others, unreported, September 30, 1994, Vancouver No. C913338, Mr. Justice Thackray, in the context of alleged realtor's negligence, said (at page 8):

. . . I am of the opinion that the onus is on the plaintiff to show that there was a certain standard of care required by the real estate agent and the agency, that that standard was breached, and that the breach caused damages. No evidence was called to establish the standard.

In Shaak v. McIntyre (supra), Madam Justice Ryan said:

[t]he (selling) broker is under a duty to check information of which he or she is in doubt (or ought to have been in doubt) before passing it on to the purchaser . . . The selling agent must also check the completeness and accuracy of all information which it is usual or customary for brokers to verify. In the case at bar there is no evidence of the usual or customary information which selling agents check. I cannot find that (the selling agent) fell below that standard, whatever it may be. (emphasis added) [page629]

The same difficulty was identified by Mr. Justice Drost in Snijders v. Morgan, unreported, January 27, 1997, Nelson No. 4747 (B.C. S.C.) where he said:

it is alleged that (the selling realtors) were negligent in failing to properly investigate the nature, identity and extent of the property they advertised for sale. There is no evidence whatsoever of that being a duty or responsibility that the law or the custom or the nature of that business imposes upon persons in that type of business in this province.

Similarly, . . . the allegation that they were negligent in failing to advise the Plaintiffs that a plot plan or survey should be obtained at any time, and more particularly once they became aware that a misdescription of the property was involved, there is no evidence of a standard of care that would impose upon them a duty to so advise the Plaintiffs accordingly.

A review of the cases referred to in these reasons suggests that unless conduct is particularly egregious, the court likely requires expert evidence of the usual or customary standard in the real estate industry regarding:

a) the kind of information that must be checked or verified by realtors, where it has not been demonstrated that the realtor had cause to doubt the information;

b) a duty to take positive steps to confirm the nature, identity and extent of the property they advertise, including any duty to recommend a purchaser secure a plot plan or survey; and

c) a duty to recommend that the purchaser secure an inspection regarding the soundness of premises, including any structural defects.