What happens if my broker leaves their firm mid-sale?

A broker’s departure does not answer itself, because the answer sits in your agreement. Éducaloi explains that the parties to a contract can be individuals, a group of people or a company. So the first job is to find out who exactly you contracted with: the broker personally, or the brokerage firm. See what a listing agreement contains for the clauses that matter.

Read who the parties are and what is promised

Check the signature block and the opening paragraph. Look for any clause that names a particular broker, lets the firm assign your file to someone else, or gives you a right to end the agreement if the named person leaves. Éducaloi also notes that it is often a good idea to have a written contract, even where one is not required. If any of these points is missing from your agreement, ask a lawyer what that means before you agree to anything new.

The Québec rule on substitutes

Under the Civil Code of Québec, a mandatary must fulfil the mandate personally unless the mandator has authorized the mandatary to appoint another person to do all or part of it. The Code adds that, if the mandator’s interests require it, the mandatary must appoint a replacement where unforeseen circumstances prevent them from fulfilling the mandate and they cannot inform the mandator in due time. Whether a brokerage agreement is a mandate is a legal question for a Québec lawyer. This page does not cover how other provinces treat the point.

Protect the file during the changeover

BDC says that, depending on a listing site’s confidentiality procedures, word could get out to employees, customers or suppliers that you are selling. A change of broker is a moment when information can move. Ask the firm in writing who now holds your financial information, the list of buyers contacted and the signed confidentiality agreements, and whether the departing broker keeps any copies. Ask too whether the departing broker may approach your buyers from a new firm, and have your lawyer read the agreement’s confidentiality and non-solicitation wording.

• Ask the firm to confirm in writing who is now responsible for your sale.
• Ask for the list of buyers contacted and the status of each.
• Ask where signed confidentiality agreements and your financial information are held.
• Ask whether you may end the agreement if you do not accept the replacement.