Terminate a Representation Agreement Ontario: What TERM Clauses Do

Last updated 11 September 2026. Written by Jatin Dua, Broker of Record at RE/MAX Quantum Realty, 799 The Queensway, Etobicoke · For Ontario registrants · 10 min read

Start by reading what these clauses actually do

The heading over this category says termination, which is why most agents assume all six clauses are ways out of a representation agreement. They are not. Four of them are continuity machinery — provisions that keep the agreement alive while changing who inside the brokerage performs it. Two of them end the relationship by moving the client to a different brokerage.

That distinction is the whole post. If your client’s real problem is that they no longer want to work with you, none of these six clauses solves it, and reaching for one because of the heading is how an agent ends up with a signed document that does not do what they told the client it does.

All six are agreements between the client and the brokerage, which is worth holding on to. The representation agreement is not yours. You are named in it, you perform under it, and you do not control it.

The model decides which clauses you can even use

Since TRESA Phase 2 came into force on 1 December 2023, Ontario has had two representation models. In brokerage representation, the brokerage represents the client and every registrant at the brokerage owes duties to that client. In designated representation, the brokerage designates one or more specific registrants to represent the client, and the brokerage itself does not represent them in the same way.

Which model applies is the brokerage’s decision. Not the agent’s, and not the client’s. If your brokerage operates brokerage representation, agreements naming a designated representative are not your paperwork, and clauses built around replacing a designated representative are not available to you. If your brokerage operates designated representation, they are — and confidential client information must not be shared with other registrants in the brokerage without written consent, which changes how you handle a file internally.

This matters for the termination clauses in a direct way. TERM-1 through TERM-4 are designated representation clauses; their entire subject is who the designated representative is. TERM-5 and TERM-6 are drafted around the brokerage itself being on both sides, which is the situation that arises under brokerage representation. Picking a clause from the wrong half of the category tells anyone reading the file that the drafting agent did not understand the model their own brokerage operates.

Ask your broker of record which model your brokerage uses and use the clauses that match. At RE/MAX Quantum we operate under brokerage representation, and my agents know it because I tell them at the start, not when an offer is on the table.

TERM-1 and TERM-2: the client who says no

Here is the situation these two exist for. Under designated representation, your designated representative is representing you as a seller, and the same representative turns up with a buyer for your property. The seller tells the brokerage, in writing, that they object to one person handling both sides.

TERM-1 is the seller-side version and TERM-2 is the buyer-side version. The mechanism is the same: on written notice to the client, the brokerage may designate a different representative from within the brokerage, chosen at the brokerage’s discretion, and on that designation the agreement is treated as amended.

Two things to explain to a client at signing rather than in the moment. First, the replacement is chosen by the brokerage, not by the client. A client who assumes they will get a say in who takes over their file will be unhappy to discover otherwise on the day it happens. Second, the amendment is automatic on the designation — there is no fresh negotiation of the agreement’s terms.

What the clause does not do is relieve anybody of the disclosure and consent duties that made the objection possible in the first place. It is a pre-agreed answer to the client’s refusal, not a substitute for asking.

TERM-3 and TERM-4: the representative who leaves

Agents move. When a designated representative leaves a brokerage, every client who has a designated representation agreement naming that person has a problem, and the problem arrives in the middle of active listings and live buyer searches.

TERM-3 handles it on the buyer side and TERM-4 on the seller side. Once the designated representative has left the brokerage’s employ, the brokerage may appoint a replacement from among its own registrants, again at its own discretion, and the agreement is amended accordingly.

This is sensible drafting and it is also the clause agents like least, because it is the one that makes plain where the agreement lives. The client contracted with the brokerage. A departing agent does not take the agreement with them, and the client does not automatically follow.

If you are considering a move, this is a conversation to have with your broker of record before you have it with anyone else, and the answers are governed by your brokerage’s own policies as well as by what the agreements say. Do not work it out from a clause code.

TERM-5 and TERM-6: the actual terminations

These two are the only clauses in the category that end anything. The trigger is the brokerage representing the other side of a trade, the client objecting in writing, and the brokerage responding by referring the client to another brokerage.

The mechanics are worth reading closely. The referred brokerage is selected by the brokerage at its discretion. The client is to enter into a representation agreement with that brokerage on the same terms as the existing one. And the original agreement is terminated subject to its own terms — which is doing a lot of work in that sentence, because whatever survives termination under the agreement still survives.

For a client, being referred out mid-transaction is a significant event. They are being asked to accept a brokerage they did not choose, on terms they negotiated with somebody else, at the point where a deal is live. If you are putting TERM-5 or TERM-6 into an agreement, explain that at signing. A client who first understands it on the day a competing offer appears will feel managed, and they will be right.

The duty these clauses sit on top of

None of these clauses replaces the multiple representation requirements. They exist to handle what happens when a client, having been properly asked, says no.

The requirements themselves are specific. Multiple representation requires written disclosure to the affected clients, best efforts to confirm that each has received it, and each client’s written consent given after receiving it. The disclosure has to advise clients to seek independent professional advice before consenting. And once you are in multiple representation, your role changes: you become a facilitator, and you do not advise either side on offer price or negotiating strategy.

The triggers for multiple representation differ between the two models, which is another reason the model question is not academic. What creates multiple representation under brokerage representation is not identical to what creates it under designated representation.

One related correction, because it comes up constantly. The RECO Information Guide must be given and explained before you provide services to a client or assistance to a self-represented party. There is no statutory requirement to obtain a signed acknowledgement for the Guide. That is different from the Information and Disclosure to Self-Represented Party form, where written acknowledgement is required and you must make reasonable efforts to obtain it. Agents mix the two up in both directions — chasing signatures they do not need and skipping ones they do.

What these clauses do not cover, and where that leaves you

The termination agents actually ask me about is not in this category at all. A seller who has changed their mind. A buyer who has gone quiet and started working with someone else. An agent who wants off a file because the relationship is not workable.

None of the TERM clauses address any of that. Ending a representation agreement for those reasons is a matter between the client and the brokerage, handled through the brokerage’s own cancellation documentation and its policies, and it is a conversation to have with your broker of record on day one of the problem rather than day thirty. The agreement is with the brokerage; you do not have the authority to release a client from it and you should not tell a client that you do.

Your exposure in this whole area is concentrated in three places, and disclosure is the one that recurs as a theme in discipline outcomes. First, multiple representation handled by assumption rather than by written disclosure and written consent. Second, explaining a clause to a client in a way that overstates what it gives them — telling a client they will choose their replacement representative, for example, when the clause gives that choice to the brokerage. Third, advising after the role has changed: once you are a facilitator you do not advise on price or on negotiating strategy, and that restriction is hardest to respect precisely when both clients are asking you what to do.

And where one side is unrepresented rather than a client, the separate regime applies: confirm they intend to proceed without representation, deliver and explain the Guide and the self-represented party form, say plainly that you act for your client and not for them, seek written acknowledgement of the form, and give them no advice on price, terms or clauses.

The six clauses at a glance

How I handle this at the brokerage

1. Know your model and say it out loud at the first client meeting. Which model the brokerage operates is not something to discover when a second offer appears.
2. Use the clauses that match the model. Designated representative replacement clauses in a brokerage representation agreement are a red flag on a file.
3. Explain the discretion at signing. The brokerage chooses the replacement representative or the referred brokerage — a client who learns that later feels it as a surprise.
4. Handle multiple representation properly and in writing: disclosure, best efforts to confirm receipt, written consent from each client after receipt, and advice to seek independent professional advice first.
5. When the role changes to facilitator, change your behaviour, not just your paperwork. No advice on price and no negotiating strategy, to either side.
6. Under designated representation, settle the confidential information question with your broker of record before any handover to a replacement representative.
7. Give and explain the RECO Information Guide before providing services. Do not chase a signature the rules do not require, and do not skip the acknowledgement on the self-represented party form, which they do.
8. When a client relationship is genuinely ending, take it to your broker of record the same week. That is a brokerage decision and a documentation exercise, not a clause.

Questions agents actually ask

Related reading

• Assignment Clauses in Ontario: What the Right to Assign Actually Gives Your Buyer
• Status Certificate Conditions in Ontario: Why Ten Days Is Not Enough
• Franchise Conditions in Ontario Commercial Deals: Approving the Documents and Being Approved
• Cleaning, Floors and Damage on Removal: The Maintenance Clauses Worth Adding
• Designated vs Brokerage Representation: The Services Clauses That Define Your Agreement
• Every clause and condition guide in one place

This is professional commentary from a Broker of Record on representation agreements and brokerage practice under TRESA. It is not legal advice. How a particular agreement may be amended or ended, and what survives its termination, are questions for the brokerage’s own policies and, where a dispute arises, for a lawyer. This is general professional commentary from a Broker of Record on drafting practice. It is not legal advice, it is not a substitute for your own brokerage’s policies, and it does not create any professional relationship. Clause codes refer to OREA’s Guidelines for Residential and Commercial Clauses, an OREA member resource — the clause wording itself is OREA’s and is not reproduced here. Always work from your brokerage’s approved forms, and send your client to a lawyer for anything turning on interpretation, enforceability or remedy. Legislation, regulator guidance and case law all change; verify anything you are relying on.