Every licensed real estate broker and salesperson in Ontario must have Errors & Omission Insurance to protect the public and themselves from lawsuits from errors. I agree that it is needed, however the way we are charged is unfair.
Everyone pays the same fee – $475 per year. That’s whether you do one deal or 50, it’s the same old thing – the more successful riding on the backs of the less successful. For example, I am a small one-man independent brokerage. In 2019 I only had three sales – that works out to $158.33 per sale for insurance.
In 2020 I had one small sale. My gross commission was $3,000 and out of that I paid $475 for insurance.
That’s not fair. The insurance fee should be set on a pay-per-use basis on a sliding scale. For example, if you list a property the real estate board would charge a fee of $25. When the listing was sold you would pay another $25. There could be a sliding scale – if you did one to 10 transactions you pay $25 for each side. The next group that made 11 to 20 sales a year would pay $50 each side and so on based on each individual’s sales performance.
John Thurman, Broker
Byron Village Realty Inc.