A Newmarket-area real estate brokerage has dropped its $25,000 lawsuit against a former client who refused to pay commission on a home sale the agency didn’t complete.
The outcome, from court, took place 12 days after a Global News story about the brokerage’s financial demands.
HomeLife Eagle Realty, owned by Hans Ohrstom, originally insisted Marlene Nemeth pay more than $45,000 in commission, then reduced the amount to about $30,000. When she twice refused to pay, on the advice of a lawyer, Ohrstrom’s brokerage sued her in small claims court for $25,000, the maximum allowable there.
On Tuesday, however, Ohrstrom’s agency dropped its case against Nemeth, after a pre-trial conference.
“The matter has been mutually settled with terms that are mutually acceptable to both Ms. Nemeth and Nina Bonakdar (the listing agent), HomeLife Eagle and Hans Ohrstrom (Broker Of Record) are pleased that both parties could come to terms in a civil manner using the courts as they were intended,” HomeLife said in an emailed statement to Global News.
Nemeth, who originally contacted Global News in June to complain about the conduct of the brokerage, was unable to comment after the settlement.
Ohrstrom did not appear in court. Instead he sent the listing agent Nina Bonakdar and legal counsel. Neither would speak to Global News outside court, although the lawyer grabbed a reporter’s arm when the reporter attempted to question the real estate agent.
Nemeth listed her Newmarket home with Ohrstrom’s company on April 17, 2017. The following month, she received a $900,000 offer from a prospective buyer. The deal was signed and closing was to take place 120 days later.
However, when it came time to finalize the sale on Sept. 30, the buyer asked for a two-month extension, which was granted by Nemeth.
WATCH: Sale doesn’t close, realtor demands commission anyway
Finally, in late November, when Bonakdar told Nemeth the buyer hadn’t been able to sell his own home, and could not close the deal, the deal fell through.
Even so, Ohrstrom demanded payment of commission.
“HomeLife Eagle Realty Inc. had a signed listing agreement with Ms. Nemeth, which provides that our commission is payable upon acceptance of a satisfactory offer, even if the deal doesn’t close, especially in circumstances where the seller bears some responsibility for the failure of the deal to close,” Ohrstrom said in a statement released by his lawyer.
His lawyer at the time said: “Ms. Nemeth demonstrated default or neglect by, prior to the date set for closing, releasing the purchaser from its obligations under Agreement of Purchase and Sale and by not insisting that the purchaser comply with its contractual obligation to complete the agreement and pay the purchase price in full in accordance with the terms of the Agreement of Purchase and Sale. It should be noted that Ms. Nemeth took this action without the knowledge or the advice of HomeLife Eagle.”
But veteran Toronto real estate lawyer Bob Aaron, who is not directly involved in the case, said Nemeth had every right to keep the deposit and move on.
“I don’t think the broker can dictate what the seller should have done. I think it’s reasonable for the seller to say, I’ll grab what I can rather than sue and not get anything, or get less money from the buyer than the court case cost me,” Aaron told Global News.
After Global News aired and published the story about Nemeth, some of Ohrstrom’s other clients expressed their dissatisfaction with Ohrstrom’s customer service.
“Agents didn’t show, they wouldn’t care,” said Chrystal Robertson of Beeton, Ont.
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She listed her home with Ohrstrom and her father listed his in early 2018. Neither home sold after several months on the market. They have since re-listed the homes with another agency.
Ohrstrom’s office said in a email: “We have numerous records of her being contacted at numerous times and responding to her at all times.”
“The statement she is making is absolutely false,” the email continued.
In addition, Robertson said Ohrstrom never offered to purchase either home when neither one had sold.
“It’s a lie,” Robertson said, referring to Ohrstrom’s advertising promise which reads: “Sold or I’ll buy it!” on transit billboards bearing an image of him smiling broadly above the words “No. 1 Newmarket real estate team.”
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Ohrstrom, who refused several interview requests dating back to June, said the offer only applies to clients who purchase another home sold by the brokerage.
“Unfortunately Mrs. Robertson was not moving up to one of our homes and unfortunately we were not able to bring in a buyer at her asking price. We would love to have sold Mrs. Robertson’s two properties as each property has major financial costs and turns into a major loss for us if not sold, especially since we market and advertise our clients homes more than any other real estate team in the business today,” another statement read.
Robertson said she plans to file a formal complaint with the Real Estate Council of Ontario (RECO). Nemeth currently has a pending complaint with RECO about her treatment by Ohrstrom’s company. It has not yet been heard.