What must a listing agreement with an Ontario business broker include?

A listing agreement is the written contract between a seller and a brokerage. In Ontario, the regulation under the Trust in Real Estate Services Act, 2002 (TRESA) says what such an agreement must contain. RECO enforces TRESA for conduct from December 1, 2023 onwards. The rules reach a business sale because the Act’s definition of “real estate” includes businesses. This page does not repeat the RECO Information Guide; for that, see what an Ontario broker must give you before you sign. This covers Ontario; check the rules where you are with a lawyer.

What the agreement must set out

Under O. Reg. 567/05 s. 13.4(1), a brokerage may not enter a written agreement with a buyer or seller for the purpose of trading in real estate unless the agreement clearly, comprehensibly and prominently sets out several items. They include the date it takes effect and the date it expires, and the method for determining the remuneration payable to the brokerage and, for a seller agreement, to any other brokerage. They also include any circumstances in which such an amount may change, with an explanation of how and whether other brokerages may receive remuneration, the method of payment, the services the brokerage will provide, and the terms related to termination, if any. A designated representation agreement must also state that the brokerage will not provide representation, name each designated representative, and set out their services, the brokerage’s duties under s. 22.0.4 and the representative’s duty under s. 22.0.5.

The expiry date and signing

The same subsection requires the expiry date to be displayed prominently on the first page, with the buyer or seller having initialled the agreement next to it. Section 13.4(2) requires the agreement to contain only one date on which it expires. If a seller representation agreement, which includes a listing agreement, is not in writing, s. 13.5(1) requires the brokerage, as soon as possible after entering it and before any buyer makes an offer, to put it in writing, sign it for the brokerage and give it to the seller to sign. Section 13.7 requires the brokerage to ensure that, where it and one or more other persons enter into a written agreement in connection with the trade, each of those persons is immediately given a copy.

What the agreement cannot leave out or override

Under s. 13.3.1, a brokerage may not enter an agreement with a buyer or seller for the purposes of trading in real estate if the agreement does not include the provision of representation. Under TRESA s. 33(3), unless the seller agrees in writing, a brokerage cannot claim remuneration from the seller if, to its knowledge, the real estate is covered by an unexpired listing agreement with another brokerage. The regulation lists terms related to termination, if any, among the items to be set out. To see whether and how your agreement can be ended early, read its own termination terms, see how to get out of a broker agreement and ask a lawyer.