Agreements for real estate commission don’t need to be in writing

A recent Ontario Court of Appeal decision highlights the provisions of the Real Estate and Business Brokers Act (”REBBA”) relating to commissions. The City of Ottawa was assisted by a real estate broker in the sale of one of its properties. At issue was whether approximately $125,000.00 of commission was payable upon the sale. The appeal court found that the City, by its conduct, had left the broker with the impression that the regular commission would be payable upon the sale of the property. REBBA provides that a commission is payable even if the rate of commission is not agreed upon, unless the vendor makes it clear that it didn’t agree to pay any commission at all. In other words, even if the rate of the commission is not agreed upon, so long as there is an oral agreement that a commission is payable, standard commission rates will apply.

J.J. Barnicke Ltd. v. The City of Ottawa (March 11, 2008)