In a listing agreement, what does the term 'holdover period' refer to?
Correct Answer
B) The period after expiry when the agent may still be owed commission if certain buyers purchase
The holdover period protects the listing agent's commission rights for a specified time after the listing expires, typically for buyers who were introduced to the property during the listing period. This prevents sellers from avoiding commission by waiting for the listing to expire before accepting offers from previously introduced buyers.
Why This Is the Correct Answer
This answer correctly defines the holdover period as the time after expiry during which commission may still be owed if a buyer who was introduced during the listing buys the property. The clause ensures the brokerage is paid for introductions it made, and it stops sellers from timing a sale to avoid commission. It is a contractual term, so its length and scope are set by the listing agreement itself.
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