Can an unregistered business broker collect a commission in Ontario?

If someone offers to find a buyer for your business for a fee, first check whether they are registered with the Real Estate Council of Ontario (RECO), which enforces the Trust in Real Estate Services Act, 2002 (TRESA). This page covers Ontario only.

Businesses can be “real estate” under TRESA

TRESA defines “real estate” to include leasehold interests and businesses, with or without premises, and fixtures, stock-in-trade and goods connected with the operation of a business. “Trade” includes a disposition or acquisition of, or transaction in, real estate by sale, purchase, agreement for purchase and sale, exchange, option, lease, rental or otherwise, any offer or attempt to list real estate for such a purpose, and any act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of any of those.

The registration rule and its exemptions

Section 4(1) bars trading in real estate as a brokerage, broker or salesperson unless registered in that capacity, and bars any trade in real estate unless registered under the Act. Under section 4(2), a person not registered as a brokerage, broker or salesperson shall not directly or indirectly hold themselves out as being one, or perform any of the functions of one. Section 5 lists exemptions, subject to prescribed conditions, including a solicitor of the Superior Court of Justice providing legal services, if the trade is itself a legal service or is incidental to and directly arising out of those services.

Actions for remuneration: section 9

Section 9 says no action shall be brought for remuneration for services in connection with a trade in real estate unless, when the services were rendered, the person bringing the action was registered or exempt from registration under the Act, and the court may stay any such action on motion.

Checking registration, and RECO’s role

RECO’s public register lists agents and brokerages registered to trade in real estate in Ontario; check the person’s status there before signing anything. RECO enforces TRESA for conduct on or after December 1, 2023. Under section 40(1)(c), contravening or failing to comply with any section of the Act or its regulations, other than a prescribed code of ethics, is an offence. See also Do business brokers need a licence in Canada? and How is a business broker paid?.