An anonymised composite: two brokerages each believed they had earned the $15,200 cooperating commission on the same sale. Neither could touch the money while it was disputed — and RECO’s own two-year clock, not either brokerage’s certainty, was the real deadline.
At a glance
A buyer worked briefly with an agent at Brokerage X, viewing several properties, before that relationship cooled and the buyer eventually purchased a different property through an agent at Brokerage Y. The listing brokerage received a claim from both: Brokerage X argued its earlier representation agreement with the buyer was still technically in force and unexpired at the time of the Brokerage Y purchase; Brokerage Y argued it had done the actual work of finding, showing, and negotiating the specific property that closed.
The disputed amount was the cooperating commission on the sale: $15,200. Neither claim could simply be paid out on request — the listing brokerage held the funds in its trust account and, with two brokerages actively disputing entitlement, had no basis to release them to either side without resolving, or at least clearly documenting, which written agreement actually governed. The dispute dragged for over two years without either brokerage agreeing to drop its claim or reaching a negotiated split.
The commission itself, $15,200, was set entirely by the listing agreement’s own terms — there is no legislated or regulator-fixed commission rate anywhere in Ontario, so this was never a fight about whether the number was fair, only about which brokerage’s paperwork actually earned it. The more consequential number turned out to be time: the funds had been sitting in trust for 27 months by the point the dispute finally moved, past the two-year mark that changes what the listing brokerage is required to do next.
RECO Bulletin 8.1 governs exactly this situation: “All unclaimed money held in trust for more than two years must be paid to RECO,” covering money where “entitlement is unclear even after the two-year window” — precisely this case. Any interest the trust account earned on the funds during that time has to go to RECO along with the principal, not to either brokerage. A narrow exception exists for very small amounts — “if the amount of unclaimed trust money held by a brokerage is less than $25.00, the brokerage is not required to forward the money to RECO” — but at $15,200 that exception was never in play.
Had the listing brokerage simply paid whichever brokerage asked first, or split the funds informally without documenting the basis, it would have been releasing disputed trust money without resolving entitlement — the kind of shortfall a subsequent claim, or a RECO review of the trust account, would have exposed directly. Bulletin 8.1’s two-year forwarding rule exists precisely so a genuinely unresolved dispute has a defined, documented endpoint instead of sitting in a brokerage’s trust account indefinitely on nobody’s authority.
The tell was procedural: neither brokerage moved toward resolution, mediation, or even a documented standoff for over two years, each apparently assuming the other would eventually concede or that the money would simply keep waiting. A trust-held dispute does not resolve itself by aging — it resolves by one of the parties acting, or by RECO’s own clock forcing the question once nobody has.
Facing the two-year forwarding requirement, the listing brokerage’s broker of record brought both brokerages together for a documented settlement conference rather than let the funds default to RECO. Brokerage X produced its representation agreement showing an unexpired term at the relevant date; Brokerage Y produced its showing records and the accepted offer it had negotiated. The brokerages split the $15,200 roughly in proportion to the work each could document, rather than litigate a full-entitlement claim over an amount that size, and the funds were released from trust within the month — just ahead of the point RECO’s two-year clock would have taken the decision out of either brokerage’s hands.
Related case files
A 30-minute call is enough to tell you whether your agreements, disclosures and records would hold up the same way.
