I'm writing this because of a question I was asked recently, and because it was a good one.
I put a representation agreement in front of someone. Instead of signing it, they read it - and then went through it with me. Not vaguely. Clause by clause. What does the term actually commit us to. What happens if this doesn't work out between us. What is a holdover period and why is it that long?
I had answers for all of it. What stayed with me afterward was that not many had made me say those answers out loud before. A document I hand people routinely is not always once been read back to me by the person signing it.
They were right to ask, and most people don't. I don't think that's their fault. The agreement usually comes out at the end of a meeting, when everyone's keen to go look at houses, so it gets summarized rather than read. I've done that. I won't again.
So here is what that page actually is, said properly.
Start with the part almost nobody knows. Under Ontario's Trust in Real Estate Services Act, a representation agreement can be written, oral, or implied. RECO's guidance is blunt about it: providing services or representation to someone in the absence of a written agreement gives rise to a representation agreement anyway. The signature isn't what creates the relationship. The relationship creates itself the moment an agent starts exercising judgment on your behalf - advising, advocating, telling you what a place is worth and what to do about it.
So the question was never whether you and your agent have an agreement. It's whether yours is written down, or left to two people's memories.
What has to be in it. RECO sets the required content, and it's worth reading as a buyer, because nearly every line on that list is a limit on the agent. One effective date and one expiry date - the expiry displayed prominently on the first page, with your initials beside it. A complete description of the services you're getting. The method used to determine what's payable to the brokerage, agreed in writing before any work begins. Any circumstance in which that amount could change, and exactly how. How it gets paid. And the terms for ending it, including what happens to your obligations if you do.
What you get back is the part that actually matters. As a client, I owe you undivided loyalty, confidentiality, full disclosure, and the duty to keep you advised of every significant step I take on your behalf. Without an agreement, you're a self-represented party. I can hand you a document. I can answer a question of fact. I can't tell you what to offer, and I can't tell you when to walk away - which is probably one the main things you were ever really hoping to get advise on.
The clause to ask about out loud. Holdover. It isn't required by law, and RECO names it as one of the biggest sources of consumer complaints. It says that if you buy a property I introduced you to within a set window after the agreement ends, the fee is still owed. That's not a trap — it's there to stop the obvious end-run. But you should hear it explained before you sign, not discover it after.
And here's the part worth taking from that conversation: the terms of the agreement are a conversation, not a decree. Some of what I was asked for I couldn't do, and I said why. Some of it was fair, and I changed it. That's how it's supposed to go.
The agreement isn't a leash. It's the only page in the whole transaction that sets out, in writing, what I owe you. Sign one with someone who reads it to you first — and who doesn't flinch when you ask.
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And yes — Ontario courts treat these as real contracts. They've enforced a written agreement against a buyer who was told it was "just a formality" (Sun v. Mani, 2024). They've upheld one against a buyer who said he'd verbally cancelled it, all the way to the Court of Appeal (Apex Results Realty Inc. v. Zaman, 2018 ONSC 7387, aff'd 2019 ONCA 766). They've even awarded a commission where nothing was ever signed, because the work had been done and the buyer benefited from cutting the agent out (Homelife Maple Realty Inc. v. Singh, 2021 ONSC 4743). And they've thrown one out entirely where the agent emailed a 19-page package at dinnertime and never explained it to the person who signed it (Sutton Group-Admiral Realty Inc. v. Taborovska, 2021 ONSC 2837). The pattern is consistent. These agreements hold when they're explained, and fail when they're not.
Ved Bhat is a REALTOR® with Royal LePage NRC Realty, Brokerage, serving the Niagara Region. This post is general information, not legal advice.
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