Exit Realty on the Rock liquidating assets but not bankrupt, owner says
Franchise owner assures clients and agent that deposits, commissions won't be lost
CBC News has obtained a letter revealing that real estate company Exit Realty on the Rock is being held in receivership by PricewaterhouseCoopers (PWC), but franchise owner Anne Squires asserts that the company has not gone into bankruptcy.
- Exit Realty on the Rock complaint under investigation, RNC confirms
- Exit Realty on the Rock's licence suspended
In the letter, Bill Stirling, chief executive officer of the Newfoundland and Labrador Association of Realtors, says he learned about the receivership Friday afternoon from a lawyer at the Bank of Montreal.
PWC's primary role, he said, will be to secure the bank's position as the primary lender and will take possession "of all assets of the company."
"Those assets will be liquidated to pay off the outstanding debt owed to BMO. Anything leftover after that happens will be paid out by the receiver to other creditors in order of their security or entitlement to payment."
Here's more of that update sent by the Realtor Association CEO Bill Stirling <a href="https://twitter.com/hashtag/cbcnl?src=hash">#cbcnl</a> <a href="https://t.co/4uJnvL6ihn">pic.twitter.com/4uJnvL6ihn</a>—@CochraneCBCNL
Stirling said the association is working with legal counsel and PWC to determine how pending commissions will be handled as agents are considered "a creditor" in the receivership process.
"At this time, we do not know where they rank in priority, and won't likely know until all the creditors are identified. We hope to have more information for you on Monday."
To clarify: Exit Realty on the Rock is in receivership - not bankruptcy. PWC is the receiver. BMO is the main creditor. <a href="https://twitter.com/hashtag/cbcnl?src=hash">#cbcnl</a>—@CochraneCBCNL
Pending sales, he said, should follow existing purchase and sale agreements. Sales commissions, however, "will likely have to be paid to the receiver [PWC] on closing."
Exit agents relicense with new broker
Stirling said about 40 former Exit Realty on the Rock agents have been relicensed with another broker as of 6 p.m. Friday, and about 25 had yet to apply for relicensing.
Stirling warned those who have not yet relicensed to be "very careful this weekend not to undertake any activity which could be interpreted by the public as 'trading in real estate.'"
Stirling said several salespeople affected by the suspension took to social media to say that listings, pending sales and licenses were being transferred to another Exit franchise — but that's not that case.
"When the broker's licence was suspended any listings immediately became null," he said.
He advises sellers to consider the situation as though their listing has expired, and they are now free to do as they please.
"They can take their property off the market, they can follow their salesperson to wherever they land and assign the listing to the new broker, or they can relist with a different salesperson."
Stirling concluded his letter by saying that the events caused as a result of Exit Realty on the Rock's suspension "will take time to unfold."
He said that the association understands the "hardship this situation is causing" and will do everything it can to support affected agents.
Bankruptcy claim '100 per cent inaccurate'
Squires would not take questions from reporters Saturday afternoon, but instead read a prepared statement.
She said any claims that Exit Realty on the Rock is bankrupt are "100 per cent inaccurate."
"The damage that has been done to agents who have supported me for more than a decade, and who have provided incredible realtor service to this community, not to mention over $1 million in donations to charitable organizations in this province ... is unsurmountable," Squires said.
"I can assure all clients that have deposits on houses that they are 100 per cent secured. And I can assure all agents industry-wide their commission is not at risk."
Here's the full text of statement by Anne Squires of exit realty on the rock. <a href="https://twitter.com/hashtag/cbcnl?src=hash">#cbcnl</a> <a href="https://t.co/WZQJAAukD6">pic.twitter.com/WZQJAAukD6</a>—@McCabeMeg