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Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 22599
Experience:  14 years real estate, Realtor. Landlord 24+ years
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Is there anyway around the hold over clause in a real estate

Resolved Question:

Is there anyway around the hold over clause in a real estate contract? We are selling our house and the contract expires in July, a couple who looked at the house in from another real estate agent offered to purchase after our contract expired. Can we do this ?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Barrister replied 1 year ago.
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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Is there any "protection period" in your real estate listing contract with the realtor?
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If so, how long of a period is it? (usually anywhere from 3 to 6 months)
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Thanks
Barrister
Customer: replied 1 year ago.
I was told by the real estate agent we are listed with that after the contract expires he has a year to still collect commision
Expert:  Barrister replied 1 year ago.
Have you actually looked at your listing contract with the realtor to see if they specifically put in this long of a protection period?
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It has to be in the contract or it wouldn't be valid.
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Did your realtor have any contact with the potential purchasers through their realtor?
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Thanks
Barrister
Customer: replied 1 year ago.
Yes it's in the contract. No our real estate agent had no contact with the buyers
Expert:  Barrister replied 1 year ago.
Ok, unfortunately if the real estate contract is an exclusive listing contract, which it sounds like it is, then the realtor would have the legal right to enforce it to collect his commission if any buyers bought the house during either the listing period or the protection period after the listing expires.
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The caveat is that in order for the realtor to be entitled to the commission, he must be a "procuring cause" of the sale. So if he has had no contact with either the potential buyers or their realtor, then you could argue that you were the procuring cause and the realtor had nothing to do with the sale.
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With that said, if you decided to take the house off the market and rent it, you could do so by simply telling the realtor that you decided to rent it rather than sell it. The realtor couldn't prohibit you from doing so but if he became aware that you had sold it later, he might try to sue you alleging bad faith and breach of contract for his commission.
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To be honest with you, it is probably a coin flip as to whether he would win because if he has had no contact at all with the potential buyer or their agent he would have a hard time arguing he was the procuring cause of the sale. His argument would be that with an exclusive listing, you had a duty to refer any potential buyers to him as your agent and that by you not doing so, you acted in bad faith and should be responsible for paying his commission.
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The way out of this would be to rent the house for a period past the protection period and then sell to the tenant. That way he would have no claim to any commission since you didn't sell it during that period.
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Thanks.

Barrister

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If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

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I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 22599
Experience: 14 years real estate, Realtor. Landlord 24+ years
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