Representation agreements in Ontario: what you are signing

When you hire a real estate agent in Ontario, you sign a representation agreement with the agent's brokerage. It makes you a client. The agreement sets out the services you will receive, what you will pay, the date it expires, any holdover period after that, and how it can be ended. Sellers usually call it a listing agreement. Buyers sign a buyer representation agreement.

The rules come from the Trust in Real Estate Services Act, 2002 (TRESA) and its regulations, enforced by the Real Estate Council of Ontario (RECO). The current rules apply to conduct from December 1, 2023 onward. They are the same whether you are buying a bungalow in Orillia or selling a cottage in Severn.

This guide is not legal advice. The legislation and your own signed agreement govern, so have a real estate lawyer review anything you are unsure about, or call RECO.

Client or self-represented party: the only two options

Under TRESA, a person in a real estate transaction is one of two things.

A client has a representation agreement with a brokerage. RECO describes what a client is owed: undivided loyalty, disclosure of everything the agent knows that could affect your decisions, confidentiality that continues after the relationship ends, and avoidance of conflicts of interest. As RECO puts it, your interests take priority over those of the brokerage, its agents and any other party.

A self-represented party is not a client of any brokerage and has chosen to handle the transaction alone. RECO notes that very few buyers or sellers make this choice.

"Customer" status ended in 2023

Before December 1, 2023, a brokerage could have a "customer" relationship with you instead of a client one. That category was removed from the legislation. Brokerages could not enter new customer agreements from that date, and RECO's transition rules had any remaining ones expire automatically on March 30, 2024.

RECO is clear that self-represented status is not a replacement for customer status. An agent can provide services only to a client under a representation agreement. Even a limited arrangement, such as only posting a listing, is a representation agreement.

The RECO Information Guide comes first

Before an agent provides services to you as a client, or assistance to you as a self-represented party, they must give you the RECO Information Guide and explain it. RECO states it is the law for Ontario agents and brokerages to provide the guide before offering services or assistance. That means it should come before you sign anything.

The legislation does not require the agent to get your signature acknowledging the guide, though a brokerage may ask for one. If an agent starts giving advice before you have seen the guide, ask for it. It is also on RECO's website.

What a representation agreement contains

RECO expects every agreement to set out its required content clearly and prominently. The agreement is always with the brokerage, never with the agent personally.

Term	What the agreement must or should say	What to check
Effective and expiry dates	Both dates stated clearly; one expiry date only, shown prominently on the first page and initialled by you	That the length suits you; there is no standard term
Scope	Sellers: the specific property. Buyers: whether it covers a specific property, a geographic area or a property type	That a buyer agreement is no wider than you need
Services	A complete description of the services you will receive	That everything you were promised is written down
Fee	The method for calculating what you owe, the method of payment, and any circumstances in which the amount might change	HST, and what happens if the seller pays some of a buyer's fee
Type of representation	Brokerage or designated; if designated, the name of each designated representative	Who is actually representing you
Holdover	Whether there is one, and its terms	Its length and what triggers it
Termination	The circumstances in which the agreement can be ended, and the financial consequences	Any penalties or costs

The term and the expiry date

RECO says there is no set time or standard term for a representation agreement. It can last "a day, a few weeks, or months." The expiry date must be displayed prominently on the first page, and the agent must make sure you initial next to it, whatever the length of the agreement.

You may have read that agreements longer than six months need special treatment. We could not confirm a six-month rule in RECO's current guidance; what it does say is that the first-page expiry date and your initials are required regardless of duration. If an agent proposes a long term, ask why.

Scope of a buyer agreement

A buyer agreement can cover one address, one town, or a property type across a region, and RECO expects the agent to clarify which before you sign. If you are only looking at waterfront in Ramara, the agreement does not need to cover every residential property in the region.

The fee

The fee is negotiable. A seller's agreement states what the seller pays their own brokerage and, separately, any amount toward a buyer's brokerage fees. A buyer's agreement states what the buyer pays and how that changes if a seller covers some of it. The commission guide explains the structures, the HST and what happens when a seller offers less than a buyer's agreement says.

The holdover clause

Most representation agreements include a holdover clause. It can require you to pay the brokerage for a purchase or sale that happens after the agreement expires, during the holdover period. RECO's example is a seller who might owe commission for selling during a 30-day holdover after the listing ends.

There is no minimum or set holdover period. RECO tells agents that holdover clauses are not required, that they often give rise to consumer complaints, and that the agent should explain the clause before the agreement is made.

Brokerage representation or designated representation

There are two forms of representation agreement. Both are contracts with the brokerage.

	Brokerage representation	Designated representation
Who represents you	The brokerage and all of its agents	One or more agents named in the agreement
Rest of the brokerage	Also owes you loyalty	Neutral; must treat you objectively and impartially
Your confidential information	Cannot be shared outside the brokerage without your written consent	Only your designated representative may access it
When multiple representation arises	Whenever the brokerage has a seller client and a buyer client in the same trade, or competing buyer clients, even with different agents	Only when the same designated representative acts for more than one client in the trade

Ask which form your agreement uses. If your designated representative cannot continue, the brokerage can appoint another agent only with your agreement.

Multiple representation and the consents required

Multiple representation is when a brokerage, or one designated representative, represents more than one client with competing interests in the same transaction. The usual case is the buyer and the seller. It also covers two buyer clients competing for the same property.

It is not permitted unless each client agrees. Before you decide, you must receive a written disclosure that explains:

• how the duties owed to you will change,
• the differences in the services you will receive, and
• any change to how much you pay.

Until that disclosure has been given and every client has agreed in writing, the brokerage or designated representative cannot take further steps for any of them. RECO tells agents that disclosure and consent at the moment an offer is being submitted is, in almost all circumstances, too late.

What you give up is significant. The agent must treat each client objectively and impartially and cannot maintain undivided loyalty to you. They cannot advise you on the price to offer or accept, or on the terms to include. RECO describes the agent's role at that point as a facilitator of the transaction. Confidential information you shared earlier still cannot be passed on without your written consent.

The agent cannot advise you on whether to consent, either. They must tell you to seek independent professional advice, such as from your real estate lawyer.

You can say no. Then the brokerage or designated representative cannot proceed that way, and you can ask about alternatives: a different designated representative at the same brokerage, or a referral to another brokerage. Your agreement should already say what happens if you decline, including any effect on fees and the holdover period.

Do I have to sign before seeing homes or making an offer?

RECO's guidance to consumers is that your agreement "must be put in writing and presented to you as soon as possible." It adds that if you do not sign, you should not expect the agent to provide you with any services. In practice, that is why an agent may ask you to sign before taking you through homes.

There is a second reason agents ask early. RECO defines a representation agreement as written, oral or implied. An agent who gives you advice, exchanges confidential information with you or negotiates for you can create an implied agreement through conduct alone, with all the duties owed to a client. A written agreement removes the guesswork for both sides and is what establishes the fee.

That does not mean you must accept a long commitment on day one. The term, the area and the property type are all negotiable, and a short agreement, or one limited to a single property, is a reasonable way to start with an agent you have just met.

We could not find RECO guidance stating a specific deadline tied to the offer itself, so we are not stating one. If timing matters to you, ask the agent which rule they are relying on, or call RECO at 1-800-245-6910.

Going straight to the listing agent as a buyer

Under Ontario's rules this leads to one of two positions.

Option 1: you are a self-represented party

The listing agent represents the seller and has a legal obligation to act in the seller's best interests. Before giving you any assistance, they must give you the RECO Information Guide and RECO's Information and Disclosure to Self-represented Party form, explain them, and make best efforts to get your acknowledgement.

From there, the agent cannot provide you with services, opinions or advice. That includes the price, terms or protective clauses to put in your offer. They cannot do anything that encourages you to rely on their knowledge, skill or judgement. Any help they do give is a service to the seller, and anything you tell them, including your top price and why you are buying, will be shared with the seller.

RECO lists what falls to you: researching zoning and other property details, estimating value, deciding your limits, dealing with competing offers, choosing the terms and preparing the documents. On a rural or waterfront purchase the rural checklist shows how long that list gets.

Option 2: you become a client of the listing agent or brokerage

If you sign a buyer agreement with the same designated representative, or with a brokerage that represents the seller under brokerage representation, that is multiple representation. It needs the written disclosure and written consent of both you and the seller, and the agent can no longer advise either of you on price or terms.

If the brokerage uses designated representation, a different agent at that brokerage can represent you fully. That is not multiple representation.

Does it save money?

Whether the seller's cost drops because you have no agent depends on the seller's listing agreement, which you will not have seen. RECO's own caution is that any perceived commission saving comes from giving up the advice and expertise an agent provides.

You can change your mind. RECO notes a self-represented party can become a client of a brokerage at any point in the transaction. For how offers and competing bids work, see offers and bidding rules.

How to end a representation agreement

Start with the contract. RECO says the agreement should describe whether you can cancel it and list all the circumstances in which it can be terminated. Review when the brokerage can end it too, and any penalties or costs.

If the agreement gives you no early exit, ending it is a matter of negotiation with the brokerage. A practical order:

Otherwise the agreement ends on its expiry date, followed by any holdover period. The best time to deal with this is before signing: ask what happens if you are unhappy a month in, and have the answer written into the agreement.

How to complain to RECO

You are not required to raise the issue with the agent or the broker of record first, though RECO says it is often the best place to start.

File through the online form at complaints.reco.on.ca, or call 416-207-4800 or 1-800-245-6910 with questions. Include your representation agreement, the offer or agreement of purchase and sale, any consents or acknowledgements you signed, the listing information and relevant correspondence.

Possible outcomes include a facilitated resolution, required education, a written warning that stays on file, or referral to a discipline hearing. A discipline committee can fine an agent up to $50,000 and a brokerage up to $100,000, and can suspend or, in rare cases, revoke a registration.

RECO cannot do everything. It has no authority to order that money be refunded, to cancel a contract or to award damages. For those you need legal advice, and RECO points to the Law Society of Ontario's referral service.

How Jordan can help

Jordan Rossman is a REALTOR® with Real Broker Ontario Ltd., Brokerage, working in Orillia real estate since November 2014. Before you sign anything, he will go through the RECO Information Guide and the agreement with you line by line: the term, the area, the fee, the holdover and how to end it. If you would like to start with a short agreement while you decide whether it is a fit, say so when you call 705-345-0797.