In Ontario, the terms “salesperson,” “broker,” and “brokerage” are often used interchangeably by the public, but they carry distinct legal meanings. Understanding who you actually hire and who is liable can affect your rights and protections when buying or selling property. This page explains the differences and gives you practical guidance for working with real estate professionals in the province.
Salesperson vs. broker: what the license means
In Ontario, a real estate salesperson is an individual who has completed the required education and obtained a registration from the Real Estate Council of Ontario (RECO) to trade in real estate under the supervision of a brokerage. A broker, on the other hand, has completed additional education and experience requirements and holds a broker registration. Both are licensed to trade, but a broker may also manage a brokerage or supervise salespersons. Despite the difference in title, when you work with a salesperson or a broker in a transaction, you are almost always dealing with an agent of a brokerage.
The key practical distinction is that a broker may take on additional responsibilities, such as handling trust funds or managing the brokerage's operations. For a consumer, the title itself does not change the nature of the relationship: you still contract with the brokerage, and the individual's license level does not alter your legal protections. When choosing a professional, focus on their experience, knowledge of your local market, and communication style, rather than the salesperson versus broker label.
The brokerage is the legal entity you hire
Under Ontario's Real Estate and Business Brokers Act, a brokerage is a business entity (often a corporation, partnership, or sole proprietorship) that is registered with RECO to trade in real estate. All salespersons and brokers must be registered with a brokerage. When you sign a buyer representation agreement or a listing agreement, the named party is the brokerage, not the individual salesperson or broker. This means your contract is with the brokerage, and the brokerage is responsible for fulfilling the terms of that agreement.
This structure has important implications. The brokerage carries errors and omissions insurance that covers claims arising from the actions of its agents. If a salesperson makes a mistake, the brokerage is legally liable, and you can pursue recourse against the brokerage. The brokerage also holds any deposits or trust funds in compliance with RECO rules. When you hire a real estate professional in London, Ontario, you are effectively hiring the brokerage that employs them. Always check the brokerage name on any agreement and verify that it is registered with RECO.
Liability: who is responsible when problems arise
If a salesperson or broker provides incorrect information, fails to disclose a material fact, or breaches their duties, the brokerage is primarily liable. Ontario law holds the brokerage accountable for the actions of its agents performed within the scope of their employment. This means you can file a complaint with RECO or pursue legal action against the brokerage. The brokerage’s insurance may cover damages, and the brokerage itself can face penalties, including fines or license suspension.
However, the individual salesperson or broker is not immune. They can be disciplined by RECO, which may impose fines, require additional education, or revoke their registration. In serious cases, both the individual and the brokerage may be named in a lawsuit. For consumers, the key takeaway is that your contract is with the brokerage, and that is where your primary legal recourse lies. Always ensure you have a clear written agreement that identifies the brokerage, and ask questions about the brokerage’s policies and insurance coverage before signing.
How to identify who you are actually hiring
When you meet a real estate agent, ask for their full name and the name of their brokerage. Check the RECO registry (available online) to confirm that both the individual and the brokerage are registered and in good standing. On all documents you sign, the brokerage should appear as the party you are contracting with. If you see only an individual's name or a team name without a brokerage, ask for clarification.
Some professionals operate under a team name or a brand that is different from the brokerage name. For example, you might see “Jane Smith Realty Team” but the actual brokerage is “ABC Realty Inc.” In such cases, your legal relationship is with ABC Realty Inc., not the team. Always verify the brokerage name on the agreement. If you are unsure, contact RECO directly. This step protects you by ensuring you know exactly who is responsible for the transaction and who to hold accountable if something goes wrong.
For additional context, review London real estate agencies.
Frequently asked questions
If I sign a representation agreement, who is my client?
When you sign a representation agreement (buyer representation agreement or listing agreement), the named brokerage is your client. The individual salesperson or broker you work with is an agent of that brokerage, acting on its behalf. Your legal relationship is with the brokerage, not the individual.
Can a salesperson work independently without a brokerage?
No, a salesperson must be registered with and work under a brokerage. In Ontario, the Real Estate and Business Brokers Act, 2002 (REBBA) requires all salespersons to be employed or authorized by a brokerage. They cannot operate independently or handle trust funds on their own.
What happens if a salesperson makes a mistake – who is liable?
Liability typically falls on the brokerage. Under Ontario law, the brokerage is responsible for the actions of its salespersons and brokers while they are acting within the scope of their duties. If a salesperson makes an error or omission, the brokerage’s errors and omissions insurance may cover it, and the brokerage can be held legally accountable. However, the individual can also face disciplinary action from RECO.