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Guide · Ontario

Referral fees in Ontario: who can pay them and who can receive them

By LeadSynthPublished 7 minute read

In Ontario, a real estate agent can only accept payment for trading in real estate from the brokerage that employs them, so referral fees are paid and received through brokerages, not directly between agents or to outsiders. Agents also have to tell their clients about any financial benefit, such as a referral fee, that they or a related person might receive.

General information, not legal advice. For your situation, ask your broker of record or RECO.

The law: TRESA

Ontario's real estate agents are governed by the Trust in Real Estate Services Act, 2002 (TRESA), which the Real Estate Council of Ontario (RECO) administers. It used to be called the Real Estate and Business Brokers Act, 2002 (REBBA); RECO notes that "on December 1, 2023, the second phase of legislative and regulatory changes to TRESA came into force", and that the Code of Ethics is O. Reg. 365/22 (RECO, Legislation RECO administers).

Two sections matter most for referral fees. Both were updated by Bill 145, the Trust in Real Estate Services Act, 2020 (Legislative Assembly of Ontario, Bill 145):

  • Section 31(2): who agents can be paid by. "Except if the regulations provide otherwise and subject to the regulations, no broker or salesperson is entitled to or shall accept any remuneration for trading in real estate from any person except the brokerage which employs the broker or salesperson." A referral fee for a trade reaches an agent through their own brokerage.
  • Section 30(c): who brokerages can pay. Section 30 restricts certain employment and payment arrangements by brokerages, and clause (c) says a brokerage shall not "pay any remuneration to a person referred to in clause (a) or (b), except if otherwise provided for in the regulations and in accordance with the regulations."

The practical effect, as one Ontario brokerage puts it: "Real estate referral fees can only be paid between registered brokerages," and "paying an unregistered 'bird-dog' for client leads is not permitted" (Filipe & Isabel Ferreira). If you're not sure whether a person or company counts as registered, RECO's public register is the place to check, and your broker of record is the person to ask.

Disclosure: what RECO expects

RECO's bulletin on financial benefits says "a real estate agent must disclose to their client all direct and indirect financial benefits" that they, or a person related to them, might receive. The disclosure has to include "an estimate of the value of the benefit or the dollar amount that might be received", "a description of any conditions under which the financial benefit might be received", and whether it's direct or indirect. The duty is "not tied to receipt of the benefit, but to the possibility it might be received", and agents must make best efforts to get a written acknowledgement (RECO Bulletin 3.3, Financial benefits).

A referral fee your brokerage expects to receive for sending a client to another brokerage is exactly that kind of benefit. So is a payment from a mortgage broker, lawyer or contractor for sending clients their way.

Common situations

Referring a client to an agent in another city

Your brokerage and the receiving brokerage agree the fee, usually as a percentage of the receiving side's commission, and it's paid brokerage to brokerage after closing. Your share comes to you through your brokerage. Disclose it to your client with an estimate of the amount, and get their written acknowledgement if you can.

Receiving a referral from another agent

The fee you owe goes from your brokerage to theirs, not from you to them personally. Section 31(2) also means you can't accept a payment for a trade directly from the other agent.

Thanking a friend or past client for a referral

This is where agents get into trouble. Paying someone who isn't registered for sending you clients is the arrangement Ontario brokerages describe as not permitted, and gifts can raise questions too. Ask your broker of record before you offer anything.

A lead company that wants a share of your commission

Ask how the company is registered and how its fee would flow under sections 30 and 31. The best-known referral platforms, such as HomeLight, Zillow, Redfin and Realtor.com, were built for US markets and their published terms are written for US agents.

Paying a flat fee for marketing or research

A flat fee for advertising or research that you pay whether or not any trade happens is a different kind of arrangement from a referral fee: it isn't tied to any trade or any commission, much like a monthly portal fee. LeadSynth charges this way: $300 a month per market, no referral fee and no share of commission. If you're unsure how any arrangement fits TRESA, ask your broker of record or RECO.

Questions

Can an Ontario realtor pay a referral fee to someone who isn't licensed?

Generally no. Under section 30(c) of TRESA a brokerage shall not pay remuneration to the persons section 30 restricts, except as the regulations allow, and Ontario brokerages describe paying an unregistered person for client leads as not permitted. Check with your broker of record before paying anyone for a referral.

Can I receive a referral fee directly from another agent?

No. Section 31(2) of TRESA says a broker or salesperson shall not accept remuneration for trading in real estate from anyone except the brokerage that employs them, unless the regulations provide otherwise. The fee goes brokerage to brokerage and reaches you through yours.

Do I have to tell my client about a referral fee?

Yes. RECO says agents must disclose to their client all direct and indirect financial benefits they or a related person might receive, with an estimate of the value and the conditions, and make best efforts to get a written acknowledgement.

What's a typical referral fee in Ontario?

The law doesn't set one; it's agreed between brokerages. Zolo puts the standard agent-to-agent range at 20 to 25% of the receiving side's commission, while US referral platforms charge around 30 to 40%, according to their published terms and industry reports.

When did TRESA replace REBBA?

The second phase of TRESA's changes came into force on 1 December 2023. Before that, the act was called the Real Estate and Business Brokers Act, 2002 (REBBA).

Sources

This page is general information, not legal advice, and LeadSynth is not a brokerage. Laws and RECO guidance change; we checked these sources on 7 November 2026. For advice on a specific arrangement, speak to your broker of record, RECO or a lawyer.