Mistakes, Disputes and Official Sources
Listing agreement traps in Canada: holdover clauses, term length and fees
The clauses in a Canadian listing agreement that most often cost sellers money, including holdover periods, exclusivity, cancellation, deposits on failed deals and admin fees.
A listing agreement is a contract between you and the brokerage, not the individual agent, and the clauses around the commission rate often matter as much as the rate. The traps that cost Canadian sellers most are a holdover clause that makes commission payable on a sale after the agreement ends, a long exclusive term with no easy exit, commission owed on a failed deal out of the buyer's forfeited deposit, separate admin fees, and figures quoted without GST/HST. Read each one before you sign, and negotiate the ones that do not suit you.
This guide is part of Mistakes, Disputes and Official Sources. For the commission rate itself, see how to negotiate commission.
The holdover clause
Most listing agreements say that if, within a set period after the agreement expires, you sell to someone who was introduced to the property or shown it during the listing, you still owe the commission. This protects the brokerage from sellers who wait out the listing to avoid paying.
What to check:
| Point | What to look for |
|---|---|
| Length | The period after expiry; shorter is better for you |
| Who it covers | Only buyers introduced during the listing, ideally listed by name on request |
| Relisting | Whether commission is cancelled or reduced if you sign with another brokerage, so you do not pay two |
| Notice | Whether the brokerage must give you a list of introduced buyers at expiry |
Example of the double-commission risk (illustrative). Your listing expires; you relist with a second brokerage, which sells to a buyer who first saw the home with the first brokerage. If the first agreement's holdover clause does not cancel itself on relisting, both brokerages could claim commission. On a $700,000 Ontario sale at 4% plus HST, that is $31,640 potentially owed twice. Standard forms in many provinces reduce this risk, but check the exact wording.
The term and exclusivity
An exclusive listing gives the brokerage the right to commission no matter who finds the buyer, including you. Long terms (six months or more) suit the brokerage more than you.
- Ask for 60 or 90 days, with an extension by mutual agreement.
- Ask what happens if you want to cancel early: is there a fee, and does the holdover still apply?
- If you already have a potential buyer (a neighbour or relative), name them in writing as excluded from the commission, or agree a lower rate for that buyer.
Commission on a failed deal
If a buyer signs a firm agreement and then fails to close, you may keep the deposit as compensation. Many listing agreements entitle the brokerage to a share of that forfeited deposit, sometimes up to the full commission. Check:
- what share of a forfeited deposit goes to the brokerage;
- whether the brokerage can claim more than the deposit;
- whether commission is due if you refuse to close.
Fees outside the commission
| Fee | Where it appears | What to do |
|---|---|---|
| Brokerage administration or transaction fee | Separate clause or schedule | Include it in your comparison or negotiate it out |
| Marketing charges | Staging, premium listings, video | Agree in writing who pays, and whether it is refundable |
| GST/HST | Often "plus HST" in small print | Always compare tax-included figures |
| Cancellation fee | Early termination clause | Negotiate before signing |
Representation and disclosure rules by province
- Ontario. Under TRESA, in force since 1 December 2023, brokerages must give clients the RECO information guide and explain representation options, including how the brokerage handles multiple representation. Sellers may choose whether to disclose the contents of competing offers.
- British Columbia. BCFSA rules have generally prohibited a licensee from representing both buyer and seller in the same trade since 15 June 2018 (a rule first made by the Real Estate Council of BC, now administered by BCFSA), with narrow exceptions such as remote areas.
- Quebec. The brokerage contract to sell uses an OACIQ mandatory form. Since June 2022, a broker acting for the seller cannot also represent the buyer. The contract states the remuneration and its tax treatment.
- Alberta. RECA requires written agreements and disclosure of how the brokerage is paid.
A pre-signing checklist
- Is the commission stated with GST/HST, or clearly "plus tax"?
- Is the buyer-side offer stated, and can it change during the listing?
- How long is the term, and can you cancel early?
- How long is the holdover, and does it end if you relist?
- Are any buyers you already know excluded?
- What happens to commission if the buyer fails to close?
- Are there admin, marketing or cancellation fees?
- Has the agent given you the regulator's required disclosure or guide?
- Is the brokerage licensed with your provincial regulator?
Turn every option into dollars with the commission calculator.
Frequently asked questions
Can I cancel a listing agreement if I am unhappy?
The agreement governs cancellation. Many brokerages will agree to release you, sometimes with conditions such as keeping the holdover. If the brokerage refuses and you think it has breached its duties, contact the regulator.
Does the holdover apply if I take the house off the market?
If you later sell to a buyer introduced during the listing within the holdover period, it usually does. Read the clause.
Is the agent or the brokerage my contract partner?
The brokerage. Your agent acts on its behalf, and commission is paid to the brokerage, which pays the agent.
Can I negotiate standard-form clauses?
Yes. Standard forms can be amended by schedule, and both parties should initial changes.
Sources
- Real Estate Council of Ontario — TRESA, information guide, multiple representation
- BC Financial Services Authority — dual agency rules and disclosure forms
- OACIQ — mandatory brokerage contract forms
- Real Estate Council of Alberta — consumer guides to agreements
