Does Your Listing Agreement With a Realtor Have to Be in Writing in BC?

Selling a home in British Columbia usually starts with hiring a brokerage to list it. Many sellers sign a listing agreement without reading it closely, then wonder later what it actually committed them to.

This guide explains what the Real Estate Services Rules require about that agreement: whether it must be in writing, what it must say, how it can be changed, and how commission works. It also explains why getting out of a listing early is a question about your contract, not a right the Rules hand you.

This article covers the law of British Columbia.

When the agreement must be in writing

A brokerage that provides trading services must have a written service agreement signed by the client and an authorized signatory of the brokerage. It must be entered into before the brokerage represents you in offering the property for sale.

There is an exception. The written agreement requirement does not apply if the prospective client waives it. Because a waiver means giving up a protection, think carefully before agreeing to one, and ask a lawyer if you are unsure what you would be giving up.

The Rules speak of a client, meaning the principal who has engaged the licensee, and an unrepresented party, meaning a party to a trade who is not a licensee's client for that trade. As the seller who hires a brokerage, you are the client.

What the agreement must state

A trading services agreement must state its expiry date, the remuneration payable, and the circumstances in which that remuneration is payable. In plain terms, you should be able to find three things on the page: when the agreement ends, how much commission you owe, and what has to happen before you owe it.

• The expiry date of the agreement.
• The commission payable.
• The circumstances in which the commission becomes payable.

The commission is a term that the written service agreement must state. Read that part closely and ask the brokerage to explain anything unclear before you sign.

Changes, copies and who gets paid

Any amendment to the agreement must be in writing and signed by the client and an authorized signatory of the brokerage. A verbal promise to change the commission or the end date is not the same as a signed amendment.

A copy of the agreement must be delivered to you immediately on execution. Keep it somewhere you can find it.

Commission is paid to the brokerage, not to the individual agent. A managing broker, associate broker or representative must not accept remuneration for real estate services from anyone other than their own brokerage, and the brokerage then pays its licensees. Remuneration may be withdrawn from trust only once it is earned under the Rules. One such point is the date the transfer documents are submitted to the land title office for registration.

Disclosure of commission and GST

When a licensee presents an offer to a seller, the licensee must disclose the seller's payments to the listing brokerage, any payments to a cooperating brokerage, the amounts retained, and other licensee remuneration. A licensee must also promptly disclose to the client all remuneration paid or payable to the licensee's related brokerage, including its source and amount.

Commission cannot be based on the difference between the listed price and the actual sale price. A licensee must not request or agree to that, and cannot keep remuneration calculated that way.

GST at 5% is charged on the value of the consideration for a taxable supply. In BC, GST rather than HST applies to a brokerage's commission, so a 5% GST amount is added on top of the commission. When you compare commission figures, check whether GST is included.

Can you cancel a listing agreement early?

The Rules require a stated termination clause only for rental property management and strata management agreements. No general right to cancel a trading services (listing) agreement appears there, so the contract's own terms govern early termination.

If you want to end a listing early, the answer depends on what your agreement says and on general contract law. Whether commission is owed after cancellation, or after the agreement expires, also turns on the wording. A lawyer can read the clause with you before you act.

• Find the expiry date and confirm it is what you expected.
• Read the commission clause and the clause on when it is payable.
• Look for any termination, protection or holdover wording.
• Confirm you received your copy and that every amendment is signed.
• Ask a lawyer before signing a waiver or trying to end the agreement early.

What to do next

Before you sign, read the whole agreement, not just the commission line. Ask the brokerage to explain anything unclear, and request changes in writing.

If you already have a listing agreement and are unhappy with it, pull out your signed copy and any amendments. Have a lawyer review them before you tell the brokerage you want out. The Rules leave early termination to the contract's own terms, and how those terms apply to your situation is worth confirming with a lawyer.

Frequently asked questions