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| Note: In the cessation of any contract, there must be mutual signatures of the all parties agreeing to the method of dealing with disposition of the existing agreement. SUSPENSION OF AGENCY In most jurisdictions, when an MLS or exclusive listing is suspended, the official computer reference to that listing simply indicates that there are no further appointments but the contract is still in full force and effect. This means that for all intents and purposes the the owners have temporarily taken the property "off the market" and also that no other Agent may list the property for sale until the existing contract expires. TERMINATION OF AGENCY The act of terminating a relationship between principal and Agent will not affect any rights of either party that arose during the agency relationship. Seven methods can be used to terminate an agency relationship. (1) MUTUAL CONSENT Since the agency relationship is created by an agreement/contract between parties, it follows that the relationship can be terminated by the same parties if they can agree to do so. (2) REVOCATION Generally, a principal has the absolute right to revoke any authority given to an agent at any time. However, in the majority of real estate scenarios, the principal has agreed to certain obligations until a specific date. The principal is not required to contract with anyone as a consequence of the agency agreement/contract and may remove the property from the market by refusing to enter into any agreement. However, the principal may be liable for damages for breach of the agency, if the terms of that agency agreement are satisfied. Similarly, an agent may terminate the agency agreement, but may remain liable for damages for breach of the agreement if there was a fixed expiry date. (3) EXPIRY The agency relationship will terminate at the date agreed to by the parties, i.e., the expiry date set out in the Listing or Buyer Agency Agreement/contract. This may be replaced by either a new or renewal agreement and a true copy of this agreement must be given to the seller. The agreement may continue for purposes of commission resulting from a sale in a holdover period as provided in the listing agreement or buyer agency agreement. (4) COMPLETION / PERFORMANCE When the agent completes what was agreed to and the ultimate purpose is achieved, the relationship will terminate. The parties hope that the relationship will end with the successful completion of an agreement/contract, e.g., the sale of the principal’s property or the acquisition of property by the buyer. (5) IMPOSSIBILITY Termination will occur if the agreement/contract involves material that no longer exists, e.g. a building destroyed by fire. A listing agreement may provide for a continuation to permit the sale of the vacant land. An agency agreement concerning the sale of property may also be disrupted if the property is expropriated or foreclosed and neither commission nor damages may be payable, depending on the terms of the agency arrangement. (6) DEATH, MENTAL INCOMPACVITY POR BANKRUPTCY The agency agreement/contract will be terminated in the event of the death, bankruptcy, or mental incapacity of either the agent or the principal. Limited circumstances may exist where the agency agreement will continue despite the principal’s death. For that reason, agreements may provide for an irrevocable provision and the requirement that such agreements be binding on the estate of the principal. (7) LICENCE / REGISTRATION CANCELLATION Termination of agency will result if the agency agreement/contract becomes void due to the cancellation of a brokerage’s license/registration. Back to www.realestate1o1.com |