October 5th - 2005

Merv’s column: Internet business not a broker

An owner of a Saskatchewan business "listed" it for sale with an Internet business and signed a "Website Agreement."

An owner of a Saskatchewan business "listed" it for sale with an Internet business and signed a "Website Agreement."

Unhappy with the results, the owner reduced the asking price, listed it with a REALTOR and it sold. The Internet business sued for its fee but the trial judge dismissed the claim on the basis that it involved a "trade" in real estate by an unlicensed person.

The appeal court agreed: "The agreement price was a fixed fee based upon 1% of the selling price of the business. The plaintiffs' promotional materials and their subsequent advertisements of the defendants' business and that of others on the plaintiffs' website on the Internet as well as in local news and print media clearly advertised these for sale and invited purchasers. After payment of the "flat fee" the balance of the agreement price was payable at the time of a sale and from the proceeds of any sale. Although some of the forms and provisions of the agreement and promotional material supported the argument that the service being provided by the plaintiffs was simply an advertising service. Nevertheless, a careful examination of the substance of the agreement, the nature of the plaintiffs' business, and the proper interpretation and application of the provisions of the Real Estate Act (in particular its definitions) to the transaction between the plaintiffs and the defendants, can lead to no other reasonable conclusion but that it constituted a trade in real estate. It may well be that in other circumstances the simple provision of Internet advertising services to an owner seeking to sell his property through the medium of the Internet would be indistinguishable from the current practice of owners advertising their properties for sale in print or other more conventional news media. These latter activities have not attracted the conclusion that the advertisers are engaging in a trade in real estate as brokers."

PIN Services Ltd v Oehler 2004 SKQB 470

Merv's Comments
Why consumers use unlicensed people continues to amaze me. Why don't people hire professionals?

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Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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