Brokerage브로커리지 (중개 회사)

What is it?

A brokerage is a company that trades in real estate for other people in return for payment. Ontario’s real estate law (TRESA) defines a brokerage as any corporation, partnership, sole proprietor or other organization that does this, and it must be registered with RECO (the Real Estate Council of Ontario).

The people we call "realtors" or "agents", the salespersons (sales representatives) and brokers, all work for one brokerage. They cannot trade on their own, and they cannot work for another brokerage. That is why every business card and ad shows the company name, for example "HomeLife Frontier Realty Inc., Brokerage".

Your contract is with the brokerage, not the agent

The representation agreement you sign when you buy or sell (a buyer representation agreement or a listing agreement) is a contract with the brokerage, not with the individual agent. RECO’s Information Guide says that when you work with an agent, you sign a contract with the brokerage the agent works for.

Since December 1, 2023, Ontario has two kinds of representation agreements. Under "brokerage representation", the brokerage and all of its agents represent you. Under "designated representation", only the agent named in the agreement represents you, and the other agents at the same brokerage must stay neutral. Check which type your agreement is on the first pages.

What happens if your agent moves to another company depends on the agreement. Before signing, ask "What happens if my agent changes or leaves the brokerage?" and find the answer in the agreement itself.

The broker of record

Every brokerage must have one broker of record. The law makes this person responsible for making sure the brokerage follows the Act and the regulations. The brokerage and the broker of record are also responsible for making sure the brokerage’s agents follow the Code of Ethics.

If you have a problem with an agent, the RECO Information Guide (page 11) says to contact the brokerage first, because in many cases the brokerage can mediate or resolve the complaint. You can also file a complaint with RECO. You can find the broker of record’s name and contact information by searching for the brokerage in RECO’s public register. A brokerage cannot ask you to promise not to complain to RECO.

Deposits go into the brokerage’s trust account

• A brokerage must keep a trust account at a bank, trust company or credit union in Ontario. All client money (such as deposits) goes into this account, must be kept apart from the company’s own money, and can only be paid out as the contract says (TRESA, section 27).
• Money received must be deposited within five business days (General regulation, section 17). Unless the contract says otherwise, interest belongs to the owner of the money.
• If a deposit is lost through brokerage theft, fraud or insolvency, RECO’s consumer deposit insurance pays up to $200,000 per claim. The client pays nothing for this coverage.
• The deposit cheque is usually made out to the listing brokerage (the seller’s company). The offer says who the deposit holder is, so check it.

Listing brokerage and co-operating brokerage

Most deals involve two brokerages.

If the same brokerage represents both the seller and the buyer, that is "multiple representation" and needs written disclosure and consent.

How the commission flows

No law sets a commission rate. RECO states that the amount is not fixed or approved by RECO, any government authority, or any real estate association or board. The agreement states a fixed amount, a percentage of the price, or a mix of both. A fee based on the difference between the listing price and the sale price is prohibited by law.

Money always moves between brokerages. The seller pays their own brokerage, and the buyer’s brokerage share is normally paid out by the listing brokerage as written in the listing agreement. A seller may decide not to cover the buyer’s brokerage fee at all; then the buyer may have to pay the amount in their own agreement.

An individual agent may not accept a commission from anyone except their own brokerage (TRESA, section 31). If an agent offers a discount for paying them directly, that breaks the law. Do not agree.

Ads must show the brokerage name

The TRESA General regulation says an agent may not advertise (websites, social media and business cards included) unless the ad clearly and prominently identifies the brokerage under its registered name. The word "brokerage" or "real estate brokerage" must appear with the name. RECO Bulletin 5.1 adds that agents working in teams are not exempt.

This is why every page of this site shows "HomeLife Frontier Realty Inc., Brokerage". If an ad has no brokerage name, or the name does not match the RECO registration, look the agent up in the public register.

What a brokerage must do for you

• Give you the RECO Information Guide and explain it before providing any services
• Put the representation agreement in writing and give you a copy right after you sign
• Make sure all of its agents follow the Code of Ethics
• When it represents a seller and competing offers come in, tell every person making an offer how many offers there are
• Keep client money in a separate trust account
• Keep your confidential information private unless you consent in writing

Example