Published 29 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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A mortgage brokerage in Ontario is licensed by FSRA under the Mortgage Brokerages, Lenders and Administrators Act, 2006, and I found no provision in the Act or its regulations for transferring a brokerage licence to another entity. Buy the assets and your own company needs its own brokerage licence: a Canadian corporation, an Ontario mailing address that is not a post office box, errors and omissions insurance of at least $500,000 per occurrence and $1 million per 365 days with fraud coverage, and a principal broker who is a licensed mortgage broker and a director or officer. Buy the shares and the licence stays with the corporation, but new directors, officers or a new principal broker must be reported to FSRA within five days. Agents and brokers are licensed to one brokerage at a time and can move for free, so the people are the business.
What you are really buying
A mortgage brokerage has very little hard property. The value sits in four places, and only one of them is fully in the seller’s control:
- The brokerage licence. Issued by the Financial Services Regulatory Authority of Ontario (FSRA) to a corporation, partnership or sole proprietorship under section 7 of the Act. It is continuous, with no renewal, but an annual regulatory fee is due every year.
- The licensed people. Every mortgage broker and agent holds an individual licence that authorizes them to deal or trade in mortgages “on behalf of one specified” brokerage (sections 8 and 9). An agent may only work under the supervision of a mortgage broker.
- The relationships. Borrower files, referral sources and lender relationships, much of it held by the agents.
- The records and systems. Files that must be kept for years, trust account records if the brokerage handles trust money, and the compliance history.
The uncomfortable point is the second one. FSRA lets a licensed agent move to another brokerage with no fee, started by the new brokerage’s principal broker. If the top producers leave in the first three months, you paid for a licence and a lease.
Share purchase or asset purchase: the licence decides a lot
| Question | Buy the shares | Buy the assets |
|---|---|---|
| Brokerage licence | Stays with the corporation you bought | Your company applies for its own; the seller applies to surrender theirs |
| FSRA filings | Five-day notices for new directors, officers and principal broker (O. Reg. 193/08) | New licence application through FSRA’s Online Services Portal, then agent and broker licence transfers |
| Past liabilities | Come with the company, including complaints and any compliance history | Stay with the seller unless you agree otherwise |
| Timing risk | Lower on day one | A gap between the old licence ending and yours starting |
In a share purchase, the corporation keeps its licence, and O. Reg. 193/08 requires notice to FSRA no later than five days after a change of directors or officers (section 10) or principal broker (section 11). I found no provision requiring FSRA to approve a change of share ownership in advance, but FSRA’s suitability test under O. Reg. 408/07 looks at the past conduct of directors and officers. Have your lawyer raise the deal with FSRA before closing.
In an asset purchase, your company applies for a new licence through FSRA’s Online Services Portal, with the E&O certificate and policy and incorporation documents, and the seller applies under section 20 to surrender theirs. Mind the timing: section 12 bars an action to be paid for mortgage work done while unlicensed. The asset-versus-share logic is the same one I set out for restaurants in asset sale versus share sale.
The principal broker rule
Every brokerage must designate a principal broker (section 7(6)). FSRA says a brokerage “must have a Principal Broker at all times” and may only have one at a time. To be eligible, the person must be a licensed mortgage broker authorized by that brokerage and, for a corporation, a director or officer; for a partnership, a partner; for a sole proprietorship, the owner.
The seller is often the principal broker. If they leave at closing, you need a licensed broker already appointed as a director or officer, named before closing. The job is not ceremonial: where there is a trust account, the principal broker signs and dates the monthly reconciliation (O. Reg. 188/08, section 53).
Records, trust money and borrower privacy
O. Reg. 188/08 sets the record-keeping rules you inherit in a share deal and should demand evidence of in any deal:
- Six years. Mortgage records are kept at least six years after the term expires or the trade completes (section 48), at the principal place of business in Ontario or other notified premises.
- Trust funds. Deposited within two business days (section 51) and reconciled monthly (section 53).
- Complaints. Every written complaint gets a written response (section 9).
- Annual return. Filed with FSRA by March 31 (O. Reg. 193/08, section 2).
Borrower files are full of personal information. Federal privacy law (PIPEDA section 7.2) allows personal information to be shared during a prospective business transaction without consent only if the buyer agrees to use it solely for the deal, protect it, and return or destroy it if the deal does not proceed; after closing, borrowers must be told within a reasonable time. Your confidentiality agreement should say exactly that.
Staff, agents and the Employment Standards Act
Assistants, underwriters and office staff are usually employees. Section 9 of the Employment Standards Act, 2000 says that if you buy the business and keep an employee, their service with the seller counts as service with you for notice, severance and vacation, unless you hire them more than 13 weeks after the earlier of their last day with the seller and the sale date. Get a list of every employee with their start date and pay before you price the deal.
Agents on commission splits may or may not be employees in law; ask your employment lawyer. Commercially, what matters is whether they stay. Ask for signed commitments from key agents as a closing condition, and look at three years of production by agent.
The same people problem runs through most service businesses. I cover it for stylists in buying a hair salon or barbershop and for licensed professionals in buying a real estate brokerage.
HST on the purchase
Section 167 of the Excise Tax Act lets seller and buyer jointly elect so no GST/HST is charged on the sale of a business, if the buyer acquires all or substantially all of the property needed to carry it on. It is not available where the seller is registered and the buyer is not, and tax still applies to the seller’s post-closing services and to property supplied by lease or licence. The election is made on CRA Form GST44.
Whether the brokerage itself is registered for GST/HST decides whether the election is relevant; ask your accountant before the letter of intent.
Documents to demand before you sign
No Canadian regulator, statistics agency or industry body publishes sale prices or price multiples for these businesses, so I will not quote one, and you should be wary of anyone who does. What you can do is test the asking price against documents.
- FSRA licence details for the brokerage and every broker and agent, with licence status and expiry dates.
- Who the principal broker is, and who will be on closing day.
- The E&O policy and certificate, the insurer, limits (at least $500,000 per occurrence and $1 million per 365 days with fraud coverage) and any claims.
- Twelve to 24 months of signed monthly trust reconciliations, if there is a trust account.
- The last three annual information returns filed with FSRA.
- The complaint log and written responses, and any correspondence from FSRA about compliance.
- Three years of production by agent and lender, reconciled to tax returns.
- Agent agreements, commission split schedules and any non-solicitation terms.
- The office lease, its assignment and change-of-control clauses and the remaining term.
The premises side of the deal is covered in mortgage brokerage office space in Ontario.
Where I fit
I am not a mortgage broker and I do not advise on FSRA licensing; your lawyer and FSRA do. Where I help is the real estate: the office lease you are inheriting or the unit you might buy. The AI office space value estimator below gives a range for an office unit in about a minute, which helps when the seller wants to fold the premises into the price. When you have it, book a call or phone 833-330-1925.
Free tool — AI office space value estimator
Frequently asked questions
Can I transfer a mortgage brokerage licence to a new owner in Ontario?
I found no provision in the Mortgage Brokerages, Lenders and Administrators Act or its regulations for transferring a brokerage licence to another entity. In an asset purchase, your company applies for its own licence and the seller applies to surrender theirs. In a share purchase, the corporation keeps its licence and reports new directors, officers and principal broker within five days.
Do I need to be a mortgage broker to own a mortgage brokerage in Ontario?
The Act lets a corporation, partnership or sole proprietorship hold a brokerage licence, but every brokerage must have one principal broker at all times. That person must be a licensed mortgage broker authorized by the brokerage and, for a corporation, a director or officer. If you are not licensed, you need someone who is.
What E&O insurance does a mortgage brokerage need in Ontario?
O. Reg. 408/07 requires errors and omissions insurance approved by FSRA, with extended coverage for fraudulent acts, of at least $500,000 for any one occurrence and $1 million for all occurrences in a 365-day period. If the policy is cancelled or not renewed, FSRA must be told immediately.
How long must a mortgage brokerage keep its records?
At least six years after the mortgage term expires or the trade completes, under section 48 of O. Reg. 188/08. Records are kept at the principal place of business in Ontario, or other premises FSRA has been told about; electronic records are fine if they can be produced promptly.
Can mortgage agents leave after I buy the brokerage?
Yes. Each agent is licensed to one brokerage at a time, and FSRA lets an agent transfer to another brokerage with no fee, started by the new brokerage’s principal broker. Retention commitments from key agents belong in the purchase agreement.
How much is a mortgage brokerage worth in Ontario?
No Canadian primary source publishes sale prices or multiples for mortgage brokerages. Value comes from verified production by agent, whether agents stay, and clean compliance records. Ask for three years of production by agent, reconciled to tax returns, before you discuss price.
Sources
- Mortgage Brokerages, Lenders and Administrators Act, 2006 — e-Laws — ss. 7, 8, 9, 12 and 20
- O. Reg. 408/07, Mortgage Brokerages: Licensing — e-Laws — eligibility, E&O minimums, suitability
- O. Reg. 193/08, Reporting Requirements for Licensees — e-Laws — five-day notices
- O. Reg. 188/08, Mortgage Brokerages: Standards of Practice — e-Laws — records, trust funds, reconciliations
- FSRA — About mortgage brokerage and mortgage administrator licences — continuous licence, annual fee, E&O
- FSRA — Become a Principal Broker — eligibility; one principal broker at all times
- FSRA — Apply for a new mortgage brokerage licence — application steps and documents
- FSRA — Transfer your mortgage agent licence to another brokerage — no fee; initiated by the new principal broker
- Employment Standards Act, 2000 — e-Laws — s. 9 sale of a business, 13-week rule
- Excise Tax Act, section 167 — Justice Laws Website — joint GST/HST election on the sale of a business
- Canada Revenue Agency — Form GST44 — election concerning the acquisition of a business
- PIPEDA, section 7.2 — Justice Laws Website — personal information in a business transaction
Related reading
- Mortgage brokerage office space in Ontario
- Buying a real estate brokerage in Ontario
- Buying an accounting practice in Ontario
- Buying a hair salon or barbershop in Ontario
- Asset sale vs share sale
- AI office space value estimator
- Cap rate calculator
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Toronto. I work with buyers and sellers across Toronto and the GTA and have helped more than 100 families sell. Four-plus years of active GTA transactions and over $100 million in sales volume. Every figure here comes from a published table, regulator or statute linked in the sources, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.