An expired agreement and a holdover claim

The situation

A seller signed a four-month Seller Representation Agreement with an Ontario brokerage, expiring March 31. RECO’s own guidance on signing a brokerage contract is explicit that a representation agreement’s expiry date “must appear prominently on the first page,” and that duration is fully negotiable — “it can be in place for a day, a few weeks, or months,” with no minimum or maximum set by RECO. This one also carried a holdover clause: a negotiated term letting the brokerage collect its commission “even when the transaction happens after your representation agreement expires,” provided the sale closed within 60 days of expiry to a buyer the brokerage had shown the property to, or dealt with directly, during the listing period. RECO does not set a standard holdover period at all — it is negotiated per agreement, and 60 days was this one’s own number.

The problem

On March 20, eleven days before expiry, the listing agent showed the property to a specific buyer during a scheduled showing, logged with a date, the buyer’s name, and the agent’s signature via the brokerage’s lockbox and showing log. The buyer made no offer at the time. The agreement expired March 31 without renewal; the seller, hoping to avoid paying a commission at all, decided to sell directly. On April 25, the seller accepted an offer — from the same buyer the agent had shown the property to on March 20, now negotiating without an agent on either side.

The numbers

The sale closed at $540,000. The expired agreement’s commission term, still governing under the holdover clause, was 2.5%: 2.5% of $540,000 is $13,500. The date math is the whole case — expiry March 31, plus a 60-day holdover window, put the outer deadline at May 30. The sale closed April 25, day 25 of that window, comfortably inside it. Had the same buyer instead closed on, say, June 5 — day 66 — the clause’s own wording would not have reached that sale at all, holdover or not, because the window itself is fixed by the agreement, not by the fact that the brokerage once did the introducing.

The rule that decided it

A holdover clause is a negotiated contract term, not a statutory entitlement, and it fails or succeeds on exactly what it says and what the brokerage can prove. This one had two conditions: a sale within 60 days of expiry, to a buyer the brokerage had shown the property to or dealt with directly during the term. Both were satisfied, and both were documented at the time they happened, not reconstructed afterward from memory.

What it would have cost otherwise

Without a written holdover clause specifying a window and a qualifying-buyer test, the brokerage would have had no post-expiry claim at all, regardless of who actually introduced the buyer — RECO sets no default holdover period, so silence in the agreement means nothing carries over. And without the dated showing log, the brokerage would have had a plausible story but no way to prove the buyer was “theirs” during the term; the seller’s word against the agent’s memory of a showing five weeks earlier is not a claim a lawyer can collect on with confidence.

The tell

The tell was not in how the deal closed — it was in the seller’s stated reason for not renewing: to “save the commission” by going direct. A seller who lets an agreement lapse specifically to avoid paying commission, then sells within weeks to someone who was already in the pipeline, is the exact fact pattern a holdover clause exists for. The brokerage’s protection was not noticing this in the moment; it was having logged the March 20 showing before there was any dispute to log it for.

The outcome

The brokerage invoiced under the holdover clause, attaching the dated showing log as support. The seller’s lawyer reviewed the log — date, buyer name, property address, agent signature — and did not contest that it satisfied both conditions in the clause. The seller paid the full $13,500. This did not double up with any second brokerage’s commission, since the seller had sold directly with no second agent involved; the only question was whether the first brokerage’s expired agreement still reached this specific sale, and the clause, plus the log, answered it.

Takeaways

• • A holdover clause is only as strong as its two conditions: the window, and the test for which buyers count. Neither is set by RECO — both are whatever your agreement says, so read them before you need them.
• • Log every showing with a date, the buyer’s name and an agent signature, whether or not an offer follows. It is worthless evidence reconstructed after a dispute starts and decisive evidence recorded before one exists.
• • A seller who lets an agreement lapse specifically to avoid a commission, then sells quickly, is not evidence of anything by itself — but it is the pattern worth checking your holdover clause against before you write it off as unrecoverable.
• • Holdover windows are date-bound, not intent-bound: a sale one day outside the window is outside the clause, however clearly the brokerage did the original introducing.