The cancellation of a listing agreement is a common occurrence in the real estate industry. Whether it is due to a change in circumstances or a dispute between the agent and the seller, there are various reasons why a listing agreement may come to an end. In Ontario, Canada, the Real Estate Council of Ontario (RECO) has established rules and regulations that govern the cancellation of a listing agreement. In this article, we will explore the cancellation of listing agreements under the Ontario Real Estate Association (OREA).
Cancellation of Listing Agreement: What is OREA?
OREA is a professional association that represents over 80,000 real estate brokers and salespeople in Ontario. OREA provides services to its members, including educational programs, advocacy, and various resources. The association also sets standards and guidelines that govern the real estate industry in Ontario.
Cancellation of Listing Agreement: Grounds for Cancellation
Under OREA, a listing agreement can be cancelled by mutual consent of the seller and the agent. If the parties agree to cancel the agreement, they must sign a mutual release form. If the seller cancels the listing agreement independently, they must provide written notice to the agent. The notice must specify the date on which the cancellation takes effect and the reason for the cancellation.
There are various grounds on which a listing agreement can be cancelled under OREA. Some of the common reasons include:
1. Failure to perform: If the agent fails to perform their duties according to the agreement, the seller may cancel the agreement.
2. Breach of contract: If either the seller or the agent breaches any of the terms of the contract, the other party may cancel the agreement.
3. Misrepresentation: If the agent provides incorrect or incomplete information about the property or the transaction, the seller may cancel the agreement.
4. Commission disputes: If the seller disputes the commission charged by the agent or the commission-sharing agreement, the seller may cancel the agreement.
Cancellation of Listing Agreement: Effects
Once the listing agreement is cancelled, the property is no longer listed for sale. Any advertising or marketing efforts must be suspended immediately. The agent must also remove all signs, lockboxes, and other materials related to the property.
If the seller hires a new agent, the new agent may need to re-list the property. In some cases, the new agent may need to wait for a period before re-listing the property, depending on the terms of the original agreement.
Cancellation of Listing Agreement: Conclusion
The cancellation of a listing agreement can be a complicated and stressful situation for both the seller and the agent. Under OREA, there are rules and regulations that govern the cancellation process, and it is important to follow them carefully. If you are a seller or an agent dealing with the cancellation of a listing agreement, it is best to seek the advice of a real estate lawyer or a professional association such as OREA.