Buying a Real Estate Brokerage in Ontario: What Moves

Last updated 12 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · Commercial & business purchases · 11 min read

The registration is not an asset

TRESA s. 4(1) prohibits trading in real estate as a brokerage unless registered as a brokerage, and prohibits trading at all unless registered. The Real Estate Council of Ontario administers that registration as the designated administrative authority. Then s. 10(3) closes the door on the obvious workaround: registration is not transferable.

That has a consequence people miss. If you buy a book of business — the listings, the agreements, the goodwill, the brand — as assets, you must already hold your own brokerage registration to receive any of it, because you cannot trade in real estate without one. O. Reg. 567/05 s. 6(1) sets the prescribed requirements for brokerage registration and they are short: the applicant must have a broker of record, must have a trust account for the purpose of s. 27 of the Act, and must have paid the fee. Section 7 makes the first two continuing conditions of registration, not one-time hurdles.

Partnerships carry a further trap. Section 4(3) deems “a change in the membership of a partnership” to create a new partnership for the purpose of registration. Buy into a partnership brokerage and the registration question reopens.

What you are actually buying is the corporation

Because registration cannot move, most brokerage purchases are share purchases: the registered corporation continues, and you acquire it. That keeps the registration alive, but it puts the registrar in the middle of your closing.

Section 4(4) requires the registrar’s consent for a change in the officers or directors of a corporation registered as a brokerage. Section 18(1) requires a corporate brokerage to notify the registrar in writing within 30 days after any issue or transfer of equity shares that results in a person, or associated persons together, acquiring or accumulating beneficial ownership or control of 10% or more, or increasing a holding already at 10% or more. Section 11(1) requires the same 10% ownership disclosure on registration and on each renewal. And s. 28(1) requires notice within five days of any change in address for service, any change in officers or directors, and “any change in the information that was included in a registrant’s application for registration.”

The registrar can also look past the share register. On a corporate application, s. 10(1)(b) directs the registrar to consider the financial position and past and present conduct of the corporation’s officers and directors and of all interested persons, and s. 10(4) deems someone an interested person where they may have a beneficial interest in the business, may exercise control, or may have provided financing directly or indirectly. A silent partner or a vendor take-back lender is not invisible to RECO.

RECO names the paperwork. A change in shareholders, officers or directors, a new broker of record, a business name change, or a change to real estate trust account information each require a Notice of Change: Brokerage. A move or contact change requires a Notice of Address Change. Ending operations requires a Notice of Brokerage Termination.

The brokerage does not exist without a broker of record

TRESA s. 12(1) requires every brokerage to designate a broker employed by the brokerage as the broker of record, to notify the registrar of that person’s identity, and to notify the registrar within five days if the broker of record changes. Section 12(2) is the one that keeps me up: “The broker of record shall ensure that the brokerage complies with this Act and the regulations.” Where the brokerage is a sole proprietorship, s. 12(3) requires the sole proprietor to be the broker of record.

O. Reg. 567/05 s. 30(1) fills in what that means day to day: the broker of record must actively participate in the management of the brokerage, ensure an adequate level of supervision of employees who trade, and take reasonable steps to deal with any failure to comply. Sections 30(2) and (3) require a brokerage that is not a sole proprietorship to designate an alternate broker for the trust account functions in ss. 19 and 20, and to inform the registrar promptly in writing of that designation and any change to it.

So the first question on a brokerage purchase is not price. It is who will be the broker of record the day after closing, and whether that person is registered as a broker, employed by the brokerage, and willing to carry personal responsibility for compliance. If the vendor’s broker of record is leaving and you are not one yourself, you are buying a business you cannot operate.

What moves and what does not

The trust account is the part that has to be perfect

TRESA s. 27(1) requires every brokerage to maintain in Ontario an account designated as a trust account at a bank, authorized foreign bank, loan or trust corporation, or credit union; to deposit into it all money that comes into the brokerage’s hands in trust; to keep that money separate and apart from the brokerage’s own money at all times; and to disburse only in accordance with the terms of the trust.

The regulation adds the mechanics. Under O. Reg. 567/05, a brokerage may not have more than one trust account unless the registrar consents in writing (s. 14); each account must be designated a “Real Estate Trust Account” (s. 15); trust money must be deposited within five business days (s. 17(1)); disbursement must happen as soon as practicable when the terms of the trust require it (s. 18); and transactions must be authorized by the brokerage (s. 19). Under O. Reg. 579/05 s. 13, a reconciliation statement must be prepared for each trust account no later than 30 days after the monthly bank statement is received, or 30 days after month end where no monthly statement is received.

On a share purchase you inherit that account, its balance and its history. I would want the monthly reconciliations, reviewed by someone who reads trust reconciliations for a living. A shortfall does not disappear because the shares changed hands.

The money nobody has claimed

There is a provision buyers rarely think about. Under s. 27(4) to (7), where a brokerage has held money in trust for two years and entitlement to it has not been determined or is unclear, or where the person entitled cannot be located after reasonable efforts, the brokerage must pay the money to the administrative authority, together with whatever information it has to determine entitlement. Aged trust balances are not a cushion. They are a statutory obligation waiting to be performed, and after closing they are yours to perform.

Records, client files and what the buyer inherits

O. Reg. 579/05 s. 19 requires a brokerage to retain all documents and records required under the Act and regulations for the time period specified by the registrar or, absent that, for at least six years; at the location specified by the registrar or, absent that, at the brokerage’s main office; and in the manner the registrar specifies. Section 20 deals with the offer that did not become a deal: a brokerage acting for a seller must keep a copy of a written offer that did not result in a purchase for at least one year after receiving it, or instead keep a prescribed nine-item record for the same period.

On a share purchase this is simple — the brokerage keeps its own records and the duty continues. On an asset purchase it is not. TRESA’s regulation-making power at s. 50, paragraph 8 contemplates regulations governing records kept by or on behalf of former brokerages, but I could not find a provision in O. Reg. 567/05 or O. Reg. 579/05 prescribing a custodian for a wound-up brokerage’s records. Do not assume you inherit a clean statutory answer. If the vendor’s brokerage is being terminated, who holds the files and for how long is something your lawyer must address in the agreement.

Insurance, filings and confidentiality

Every registrant must be insured under the group policy arranged by the board of the administrative authority. O. Reg. 579/05 s. 11(2) sets the floor: professional liability insurance of at least $1 million per claim and $3 million per policy year per registrant, deposit insurance of at least $100,000 per claim and $1,000,000 for all claims arising from one occurrence, and commission-claim insurance at the same limits. Confirm the vendor’s registrants are insured and that the transition leaves no gap.

TRESA s. 28(4) allows the registrar to require a brokerage to file a financial statement, signed by the broker of record and certified by a person licensed under the Public Accounting Act, 2004. Section 28(5) makes that information confidential. That confidentiality matters for the next section.

What a brokerage sells for is not published anywhere

I will not give you a multiple, because no credible Canadian source publishes one. RECO publishes bulletins, a registrant search and annual reports, but no transaction values — and the financial statements it does collect are made confidential by TRESA s. 28(5). No Canadian government source publishes brokerage sale prices, book-of-business values or valuation multiples that I was able to verify.

What exists is operating benchmarking. Innovation, Science and Economic Development Canada publishes Financial Performance Data sourced from Statistics Canada — revenue, wages, operating expenses, net profit and ratios by quartile. It is performance data, not transaction data. Every revenue and EBITDA multiple circulating for brokerages comes from private intermediaries and marketplaces, much of it American, and I am not going to repeat those numbers as though they were market fact. Build your number from the brokerage’s own financial statements, its commission structure, the agent roster and its retention history, and the condition of the trust account.

The disclosure rules that apply to the deal itself

Two provisions bear directly on this transaction, and both are worth knowing whichever side you are on.

O. Reg. 567/05 s. 21 applies where a registrant negotiates the purchase of a business for the person disposing of it. Before a binding agreement, the registrant must deliver statements signed by or for the vendor: a profit and loss statement for the preceding twelve months or since the vendor acquired the business, a statement of assets and liabilities, and a list of all fixtures, goods, chattels and rights relating to the business that are not included in the trade. Under s. 21(3), where that third statement is not delivered and the agreement does not expressly deal with an item, the item is deemed included in the trade. Section 21(4) sets an alternative sworn-statement route covering the terms on which the vendor holds possession of the premises, any subletting, all liabilities, and whether the books were made available for inspection.

TRESA s. 32 applies when a registrant acquires or disposes of an interest in real estate — which is exactly what happens when a brokerage buys its own office. The registrant must first deliver to all other parties a written notice, acknowledged in writing, disclosing that it is a registrant and giving full disclosure of all facts within the registrant’s knowledge that affect or will affect the value of the real estate, and on an acquisition, particulars of any negotiation, offer or agreement for onward disposition. My post on what a real estate lawyer does covers where that sits alongside the lawyer’s work.

Tax, staff and the ordinary parts of the transaction

The rest looks like any other Ontario business purchase. Ontario HST is 13%, and on a going-concern asset sale the vendor and buyer may jointly elect under Excise Tax Act s. 167 on Form GST44, where the buyer acquires all or substantially all of the property reasonably necessary to carry on the business — CRA reads that as generally 90% or more of the fair market value of that property, and if the supplier is a registrant, the recipient must be too. Goodwill is excluded from tax under s. 167.1 whether or not the election is filed. My post on HST clauses covers the drafting, and your accountant decides the structure.

On the employee side, Employment Standards Act, 2000 s. 9(1) deems an employee’s service with the seller to be service with the purchaser where the purchaser employs them after a sale of the business, unless the purchaser hires more than 13 weeks later. That reaches the administrative and accounting staff who keep a brokerage running. Whether a particular registrant is an employee for ESA purposes is a legal question about that person’s arrangement, not something to assume from the fact that they trade under the brokerage. Ask employment counsel before you plan the transition.

And if the office is leased, read the lease before you value the business. Commercial Tenancies Act s. 23(1) implies a proviso that consent to assignment is not to be unreasonably withheld, but only “unless the lease contains an express provision to the contrary.” My post on the lease review condition covers how to keep that open until you have read the document.

Sources

• Government of Ontario e-Laws — Trust in Real Estate Services Act, 2002
• Government of Ontario e-Laws — O. Reg. 567/05, General (TRESA)
• Government of Ontario e-Laws — O. Reg. 579/05, Educational Requirements, Insurance, Records and Other Matters
• Government of Ontario e-Laws — O. Reg. 536/20, Personal Real Estate Corporations
• RECO — Changes to a brokerage or branch registration
• RECO — Opening a brokerage or branch office
• Justice Canada — Excise Tax Act, s. 167
• Government of Ontario e-Laws — Employment Standards Act, 2000

This is general professional commentary from a Broker of Record on commercial and business acquisitions in Ontario. It is not legal, tax or accounting advice, and it does not create any professional relationship. Whether a licence transfers, how a purchase should be structured, what tax applies and what a regulator will require on your particular file are questions for your lawyer, your accountant and the regulator itself. Rules, fees and published requirements change — verify anything you intend to rely on against the primary source on the day you rely on it.