What must an Ontario business broker give me before I sign a listing agreement?

This page covers Ontario only; check the rules where you are if your business is elsewhere. Ontario’s Trust in Real Estate Services Act, 2002 (TRESA) defines “real estate” to include businesses, whether with or without premises, so TRESA can apply to a business broker. It does not follow that every business broker is a registrant. Our page on whether business brokers need a licence covers that question. Here are the items RECO, the regulator, and the Code of Ethics speak to.

The RECO Information Guide

RECO Bulletin 2.1 says that before an agent provides services to a client or assistance to a self-represented party, the agent must give the person a copy of the RECO Information Guide and must explain its content. The bulletin says agents are expected to provide it to a prospective client before an agreement is entered into with the brokerage. RECO’s FAQ says the obligations are the same for registrants trading in commercial property, and that RECO has made a commercial version of the guide. According to the bulletin, the legislation does not require an acknowledgement, though a brokerage may require its agents to obtain one.

The written agreement itself

TRESA lets the government make regulations regulating listing agreements, representation agreements and other types of agreements. The sources read for this page did not give a seller-side list of what the agreement must contain, so this page does not offer one. RECO’s FAQ says remuneration terms should be clearly established in the representation agreement with the client. Ask the broker whether the document is a TRESA representation agreement, how the commission is determined, how long the agreement runs, and for a copy to review with your lawyer.

If the broker may act for you and the buyer

RECO Bulletin 3.2 says written multiple representation disclosures, acknowledgements and consents are mandatory if a brokerage proposes to have the brokerage, or a designated representative, represent more than one client in the same trade. The brokerage makes the disclosure, makes best efforts to obtain an acknowledgement, and each client who agrees gives written consent. RECO says no further steps may be taken for any of the clients until the disclosure is made and each gives written consent. See also what changes if one broker acts for both sides.

Checking the registration

TRESA requires the registrar to make the names of registrants, and other prescribed information, available to the public. RECO says its public register shows the agent or brokerage name and registration status, and for a brokerage the broker of record and ownership information. RECO also says it lists enforcement activities within the past five years. Search it yourself before you sign, and ask the broker to confirm in writing that they are registered with RECO.