Commissions in Incomplete Real Estate Transactions 

Did you know you could be on the hook for a realtor’s commissions even if the sale of your home doesn’t complete?

According to a recent case by the BC Supreme Court, if you have contracted a real estate agent to list properties you own, you could potentially still owe the real estate agency commission even though a sale was never completed. 

In Century 21 Seaside Realty Ltd. v Armstrong, The Court wrote that commission is collectable so long as there is a legally enforceable contract of sale. The actual sale doesn’t need to close.  

The Court ruled in the Armstrongs’ case that there was a legally enforceable contract and the real estate agent had not failed in his fiduciary duty to them by failing to advise them that they would have to pay the commission even without closing. 

The outcome depends, amongst other things, on the wording of the contract and the circumstances the agreement was signed in.  


The Armstrongs entered into a sale and purchase agreement for two cabins on the coast of Lake Errock, located east of Mission. The buyer paid deposits but did not show up to pay the outstanding amount on the completion date.

Legally Enforceable Contract of Sale 

The Court ruled that the Armstrongs had entered into a legally enforceable contract of sale, which could not be rescinded due to fraudulent misrepresentation or the Visit Clause. 

The Armstrongs had signed a multiple listing service (MLS) agreement with Seaside Realty. The MLS contained a Commission Clause that stipulated commission is to be paid if a legally enforceable contract of sale is entered into during the course of the contract.

The Armstrongs tried to say that the sale agreement was not a legally enforceable contract, and so didn’t trigger the Commission Clause. They argued that a “Visit Clause” in the contract, which mandated that the seller help the buyer visit the properties before the completion date, was never fulfilled, which rendered the contract legally unenforceable. They claimed that they had failed to ferry the potential buyer across the lake to see the properties after the agreement was signed.

1 Century 21 Seaside Realty Ltd. v Armstrong, 2022 BCSC 464 at para 4 [Armstrong]. 

2 Ibid at para 14. 

3 Ibid at para 41.  

The Court rejected this argument, using contractual interpretation principles such as common sense to rule that the Armstrongs’ interpretation of the Visit Clause to be “onerous and extraordinary”.

Fiduciary Duty

The Armstrongs also argued that their real estate agent breached his fiduciary duty by failing to explain that a commission could become payable even though the sale did not go through. The court rejected this argument. 

The court noted that the Commission Clause did “not refer to a closing or completion.” In fact, the clause after actually refers to the “commission being payable in the absence of a closing on the completion date”. Therefore the real estate agent did not fail his duty to disclose material circumstances. 

The Court  also noted that the Armstrongs had time to review the MLS contract. They did not seek any additional time to review the contract. They were also sophisticated parties; Mr. Armstrong was an accountant and the Armstrongs had bought and sold property on prior occasions. The real estate agent did not owe the Armstrongs a fiduciary duty when the MLS contract was signed. 

If you are concerned about having to pay your realtor a commission without a sale, you should consult with a lawyer. 

*Please note that this information is intended for informational purposes only. there are always other considerations and interpretations of the law.  This does not constitute legal advice. For more information or assistance with a residential tenancy eviction matter, contact our office to speak with a lawyer directly.  

4 Ibid at para 46, citing Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53.

5 Ibid at para 48

6 Ibid at para 72.

7 Ibid at para 73.

8 Ibid at para 71.

9 Ibid at para 77.