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Broker Agent Commission Split Agreement Template for Canada

A legally binding agreement governed by Canadian law that establishes the financial relationship and commission structure between a real estate broker or brokerage firm and their agent. The document outlines the split of commissions earned from real estate transactions, defines the responsibilities of both parties, and includes provisions for payment terms, performance expectations, and termination conditions. It ensures compliance with provincial real estate regulations and federal tax laws while providing a clear framework for the business relationship.

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What is a Broker Agent Commission Split Agreement?

The Broker Agent Commission Split Agreement is a fundamental document in Canadian real estate brokerage operations, essential for establishing clear financial terms between brokers and their agents. This agreement is required whenever a new agent joins a brokerage or when commission terms need to be modified for existing agents. It must comply with provincial real estate regulations, which vary by province, and federal tax laws. The document typically includes detailed commission structures, payment schedules, performance expectations, and terms for both parties' obligations. It's particularly important in Canadian jurisdictions where real estate professionals operate as independent contractors rather than employees, requiring clear delineation of business relationships and financial arrangements.

What sections should be included in a Broker Agent Commission Split Agreement?

1. Parties: Identification of the Broker and Agent, including their licensing details and contact information

2. Background: Context of the agreement, including the broker's business nature and agent's qualifications

3. Definitions: Key terms used throughout the agreement, including types of transactions, commission, and gross commission income

4. Appointment and Scope: Formal appointment of the agent and scope of their authority to represent the broker

5. Term and Termination: Duration of the agreement and conditions for termination by either party

6. Commission Structure: Basic commission split arrangement between broker and agent

7. Payment Terms: Timing and method of commission payments, including any holdbacks or special conditions

8. Agent's Obligations: Key responsibilities and duties of the agent, including compliance with regulations

9. Broker's Obligations: Support services and resources provided by the broker

10. Confidentiality: Protection of confidential information and trade secrets

11. Non-Solicitation: Restrictions on soliciting clients or other agents during and after the agreement

12. Dispute Resolution: Process for resolving disagreements between parties

13. General Provisions: Standard clauses including governing law, amendments, and notices

What sections are optional to include in a Broker Agent Commission Split Agreement?

1. Training and Support: Details of additional training programs and support services offered by the broker, used when the broker provides extensive support systems

2. Marketing Contribution: Terms regarding sharing of marketing costs and responsibilities, included when there's a specific marketing arrangement

3. Team Structure: Rules for operating as part of a team or hiring assistants, used when the agent works with or plans to build a team

4. Performance Incentives: Additional commission tiers or bonuses based on performance, included for progressive commission structures

5. Expense Sharing: Agreement on sharing of business expenses, used when there are shared operational costs

6. Insurance Requirements: Specific insurance coverage requirements, included when additional insurance beyond standard coverage is required

7. Virtual Office Provisions: Terms specific to remote work arrangements, used for virtual or hybrid office setups

What schedules should be included in a Broker Agent Commission Split Agreement?

1. Schedule A - Commission Split Structure: Detailed breakdown of commission split percentages, including any sliding scales or thresholds

2. Schedule B - Fee Schedule: List of all administrative fees, desk fees, or other charges deducted from agent's commission

3. Schedule C - Technology and Tools: List of technology, software, and tools provided by the broker and associated costs if any

4. Schedule D - Office Policies: Detailed office procedures and policies that the agent must follow

5. Appendix 1 - Commission Calculator: Examples and formulas for calculating commission splits in various scenarios

6. Appendix 2 - Required Forms: Templates and forms used in the commission reporting and payment process

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Canada

Document Type

Broker Agreement

Cost

Free to use

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