I received an email forwarded from a member of this group from the APOG steering committee, the APSC. The message is that they have located another broker, the Michelle Yu Group, willing to do a land assembly at a lower commission rate than the Klein Group. I do not have a copy of the listing agreement from the Yu Group, but I have requested one.
Until I have seen the actual agreement, I cannot be certain of its contents. However, in the email from the APSC, it says that the listing agreement with the Yu Group follows the APSC proposal sent to Klein by Ed Wilson, the APSC attorney. The discussion below is based on the APSC proposal. If the substance of that proposal is not what is sent out by the Yu Group, then these comments will be updated as appropriate.
In short, be wary.
The email states that the basic provisions are a land assembly at a lower commission rate and a shorter term. The listing amount is higher but that is fundamentally irrelevant – it is simply an estimate of what one might get.
Why be wary?
The Yu Group, according to their website, has not done any large scale strata assemblies. They are, essentially, a residential realtor group that has done some small assemblies of blocks of single family houses in Vancouver. Assemblies involving a few residences at a time on a block are transactions on a completely different scale and type than an assembly of the size and complexity of Anchor Point.
The Klein Group listing agreement provides for no expenses to owners except closing costs on sale. No financial risk on legal or other fees. The APSC proposal I have seen includes ongoing legal fees to Ed Wilson/Lawson Lundell and the risk of other expenses. The legal fee estimate alone, per Clark Wilson at an AP3 special meeting last year, was 2-3% of the gross sales price – assuming no court dispute; an unlikely circumstance.
If that is the case with Lawson Lundell, then the actual total cost to owners (commission plus legal and other expenses) is likely identical to the Klein Group agreement except that with Klein Group there is zero risk on expenses and no money needs to be paid until the closing costs. With the APSC proposal, there will be fees incurred on an ongoing pay-as-you go basis - whether or not the transaction completes.
It is important to remind owners that the money going into their pockets is based on the sales price less the total sales costs, not simply the commission.
There are other provisions in the APSC agreement that, contrary to their email, are definitely more favourable to the APSC members interests. These provisions are not necessarily in the interests of other AP owners. As always, I recommend that before signing any agreement, one has one's own independent attorney, without any conflict of interest, review the proposals on your behalf.
If you are a contributor to the APOG, I strongly suggest that you contact Ed Wilson directly to ensure that you are receiving his legal advice directly from him as a client, and that he acknowledges that you are his client – with the professional obligations that go along with that relationship.
Legal advice coming indirectly, through the APSC emails, is not the same as receiving direct legal advice from an attorney genuinely representing your interests. An attorney representing you individually is required to disclose any conflict of interest he or she may have involving you, any broker, any developer, and any other members of the APOG – including the APSC members.
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