When is Commission Owed?
The Co-operating Brokerage must be paid within 7 days of closing. If the funds have not been received, update the Co-operating Brokerage as to why…. communicate, communicate!
If there is a dispute about the amount, the listing Brokerage must still pay the Co-operating Brokerage first and then file an arbitration claim.
Important Disbursement Rule
Following completion of the transaction:
No funds may be transferred or paid to the Listing Brokerage or any third party (staging company, lawyers) until the Remuneration Trust Amount has been disbursed to the Co-operating Brokerage.
The Co-operating Brokerage gets paid first.
What if the Listing Brokerage Doesn’t Receive the Full Commission?
Unless there is a written agreement stating otherwise:
The Cooperating Brokerage is still entitled to their full agreed commission, even if:
The Seller breaches the contract, or
The Listing Brokerage does not receive the full amount as expected.
Your agreement between Brokerages stands - regardless of Seller issues.
If there is a Commission Shortfall
If there are not enough funds to pay the Co-operating Brokerage in full:
Step 1 – Act within 60 days from closing
Brokerages are encouraged to find a mutually agreeable solution.
During the 60 days, the Listing Brokerage must:
Start legal action against the Seller to recover:
The full commission, or
Enough to cover what is owed to the Co-operating Brokerage or,
Pay the Co-operating Brokerage in full.
Doing nothing is not an option.
What the Listing Brokerage Must Provide
While working toward a resolution, the Listing Brokerage must provide:
Proof of due diligence to ensure commission funds would be available at closing
A written summary and supporting documentation explaining the shortfall
If commission is paid in stages, each stage is treated as a separate transaction
Transparency and documentation are critical.
If the Listing Brokerage Does Nothing
If the Listing Brokerage:
Does not start legal action within 60 days,
Does not continue to pursue the claim diligently, or
Does not pay the Co-operating Brokerage,
Then the Co-operating Brokerage may:
Take legal action against the Seller
Require the Listing Brokerage to assign its rights under the Listing Agreement
Access necessary documents
In that case:
The Co-operating Brokerage pays their own legal costs
They keep all money recovered, even if it exceeds their commission and costs
The Listing Brokerage gives up any right to those recovered funds
If No One Starts Legal Action
If brokerages cannot agree and neither party commences legal proceedings, the matter may be referred to the Arbitration Roster.
Bottom Line – What Must be Done
Pay within 7 days of closing
If funds are delayed – call the Co-operating Brokerage immediately, communicate
If there is a dispute – pay first, arbitrate second
A shortfall does not reduce the Co-operating Brokerage’s entitlement
The listing Brokerage must act within 60 days (pay or commence legal action)
If the Listing Brokerage fails to act, the Co-operating Brokerage can step in and pursue recovery directly.
