A seller has entered into a Seller Representation Agreement with a brokerage. The agreement specifies a commission rate of 5%. Prior to expiry, the seller decides to terminate the agreement because they are unhappy with the marketing efforts. Under what circumstances might the seller still be liable for commission?

Question: A seller has entered into a Seller Representation Agreement with a brokerage. The agreement specifies a commission rate of 5%. Prior to expiry, the seller decides to terminate the agreement because they are unhappy with the marketing efforts. Under what circumstances might the seller still be liable for commission?

Answer options: ✅ If the brokerage can demonstrate that they introduced the property to a buyer who subsequently purchases it within a protected period specified in the agreement.

• Only if the seller sells the property privately to a family member after termination.
• The seller is never liable for commission if they terminate the agreement before its expiry.
• If the brokerage incurs significant advertising costs during the listing period, regardless of a sale.

Correct answer: If the brokerage can demonstrate that they introduced the property to a buyer who subsequently purchases it within a protected period specified in the agreement.

Explanation: Seller Representation Agreements often include a 'holdover' or 'protected period' clause. This clause stipulates that if a buyer introduced to the property by the brokerage during the listing period purchases it within a specified timeframe after the agreement's expiry or termination, commission may still be due. This protects the brokerage's efforts, as outlined in the general terms of such agreements.