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 8

  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.

  2. My listing agreement and cancellation agreement both noted the hold over clause however neither form indicated how long the hold over period lasts. Is there a standard # of days assigned to this clause?. Ie 30/60/90. And what does “if the buyer was introduced to the property ‘by any source” mean? -ie for me they may have seen our listing on Realtor.ca or local newspaper ad at some point in time over the last year but never contacted any agent or came to see the property during the actual listing period. We cancelled our listing after a year of trying to sell. We are now 5 weeks post terminating our listing and have had people who work with our my son and got our contact info from him and asked if we would still be interested in selling. Does this then fall under having to now pay commission to our realtor if we do end up selling to these people?

    1. Post

      The Listing agreement would have to include a specific number of days for the holdover period. If it does not contain anything, or was just left blank, then that means “0” days.

      The referral of persons essentially means people who come to your door during the Listing while it was in force, not afterwards.

      The Cancellation usually maintains the holdover period, but in your case it sounds like there was no holdover period at all.

      Anyone coming along who is “NEW” for the first time does not fall under the holdover period anyways.

  3. Hi Brian! Thanks for another great article! A question: If the seller asks to cancel the listing, and then sells the property privately during holdover period to the buyer who saw the property while it was listed, is the listing brokerage entitled to the commission? If so, would it be full commission or only half (listing side).

    Do we put holdover period for cancellation on form 242?

    1. Post

      Full commission is payable. There would be no cooperating Brokerage commission.

      The usual Cancellation Form does not remove the effective holdover provision in the Listing. That will still continue.

      The purpose is to avoid an “end run” such as this.

  4. I have signed listing agreement with an agent and I cancelled before even hit the market. our listing with the agent and have 60 days holdover .and now I’m going to list with different brokerage do I have to wait to 60days is done ? My listing was never published or put on sale yet

    1. Post

Leave a Reply

Your email address will not be published. Required fields are marked *