Holdover Provision in Listing Agreements (Ontario)

Holdover Clauses and You – Rioux Baker Real Estate Team Collingwood & Blue  Mountains Real Estate


Just how does the “holdover provision” work?


Let’s have a look at the actual provision:

“The Seller further agrees to pay such commission as calculated above if an agreement to purchase is agreed to or accepted by the Seller or anyone on the Seller’s behalf within ……………………….. days after the expiration of the Listing Period (Holdover Period), so long as such agreement is with anyone who was introduced to the Property from any source whatsoever during the Listing Period or shown the Property during the Listing Period.

If, however, the offer for the purchase of the Property is pursuant to a new agreement in writing to pay commission to another registered real estate brokerage, the Seller’s liability for commission shall be reduced by the amount paid by the Seller under the new agreement.”

This is how the holdover applies to a Seller:

1. During the term of the listing, a Buyer must have been introduced to the property. This includes a showing.

2. During the term of the holdover, that same Buyer must purchase the property (it does not matter when the transaction actually closes)

3. If the property has not been listed with any other brokerage when the Buyer purchases the property (so it’s a private for sale), then the original Listing Brokerage can make a claim for the commission that was owed under the Listing agreement pursuant to the holdover clause.

4. If the property is listed for sale with a another Brokerage when the Buyer purchases the property, then if the commission paid to the second Brokerage is equal or more than the commission that was agreed to on the first listing, then the first Brokerage is not entitled to any commission whatsoever.

If the commission paid to the second Brokerage is less than the commission that was agreed to on the initial listing, then the first brokerage may claim the difference.

Brian Madigan LL.B., Broker


Comments 2

  1. Hi Brian!

    Question: Why is commission owed to the first brokerage if second brokerage lists the property with lower commission? Just curious, can you provide an explanation to that.

    So we don’t owe if its equal or more but we do if its less. If you can explain why.

    Thanks so much for your time again,

    1. Post

      Have a look at the Listing Agreement and read that provision carefully.
      It’s intended to deter someone from arriving suddenly with a discount broker.

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