Terminating a Listing or EBRA

🛑 Terminating a Listing: Protecting Yourself with Conditional Terminations and Expense Recovery

📄 Document: Understanding Listing Terminations & Section 10 of the ESRA

🚨 Why Terminations Need to Be Handled Carefully

Agents often jump to terminate listings to “keep the peace,” especially when a seller decides they no longer want to sell.
But terminating a listing without protecting your time, marketing costs, or brokerage rights can result in unpaid expenses and lost commission — even after substantial work has been done.

You have professional tools within the Exclusive Seller Representation Agreement (ESRA) to protect yourself. Use them properly.

🔑 The Two Types of Termination

1. Full Termination (Unconditional)

The listing ends entirely, with no surviving obligations.

• Post-listing protections under Section 10.3(b) are lost unless separately preserved.

• The right to recover marketing costs under Section 10.7 is usually forfeited unless already collected.

⚠️ Use only when the seller has paid your agreed costs or you’re prepared to walk away without reimbursement.

2. Conditional Termination

The listing is ended early on the MLS®, but Section 10 of the ESRA survives for a defined protection period.

• The Effective Termination Date is the date the listing officially ends.

• The Protection Window is calculated as:
  → Effective Termination Date + the number of days specified in Section 10.3(b).

• This defines how long the brokerage’s commission protection remains enforceable.

• The seller must still pay commission if they sell to a buyer who was introduced during the listing period.

• You can also pursue unpaid expenses under Section 10.7.

✅ This is the correct and protective method when a seller refuses to pay agreed expenses or might try to sell privately/off-market.

⚖️ Important Note on Section 10.6

Commission rights under Section 10.3(b) do not apply if:

• The seller signs a new representation agreement with another brokerage that begins after your agreement ends (10.6(b)), or

• The buyer was excluded in writing (10.6(a)).

➡️ Always review 10.6 before asserting commission rights.

📋 Protected Buyer Notice Requirement

To rely on 10.3(b), the brokerage must identify buyers introduced during the term of the agreement.
Before termination, provide the seller with a Protected Buyer Notice listing all such buyers (showings, inquiries, or written offers).
Keep proof of delivery — this is essential for enforcing post-termination commission rights.

💰 Your Right to Be Paid for Work Already Done (Section 10.7)

If the seller changes their mind about selling, Section 10.7 allows reimbursement for reasonable expenses incurred up to that point.

Define these expenses clearly in advance in the ESRA.
Example wording:

“Photography, RMS measurement, admin, listing setup, and social media campaign: $2,500.”

If the seller cancels and refuses to pay, proceed with a Conditional Termination, which keeps your expense recovery and commission protection intact under Sections 10.7 and 10.3.

📊 How Conditional Termination Creates Leverage

Conditional termination gives the brokerage leverage to recover costs or preserve rights:

Example:
If a seller requests to cancel April 15 and Section 10.3(b) provides a 90-day protection period,
→ the ESRA ends on April 15 but Section 10 survives until July 14.

“We’ve already invested in your listing. Either cover the $2,500 marketing cost as agreed and we’ll issue a full termination today, or we’ll proceed with a conditional termination, which keeps our commission rights in effect until mid-July.”

This framework is fair and often motivates sellers to pay costs rather than remain bound by a protection window.

🔐 Using Section 10.3 to Protect Your Commission

Even after termination, Section 10.3(b) entitles the brokerage to its fee if:

• A buyer introduced during your listing purchases the property within the protection period, or

• A sale occurs before the agreement ended (even without your direct involvement).
  
  

The protection window is calculated from the Effective Termination Date plus the days listed in Section 10.3(b).

⚠️ The AREA Conditional Termination form does not calculate this automatically —
the brokerage must determine and communicate the Protection End Date in writing to the seller.

✅ Best Practices for Agents

• Always complete Section 10.7 with a clear, itemized cost summary.

• Keep records of marketing spend, buyer inquiries, and showings.

• Never issue an Unconditional Termination until expenses are paid.

• Use Conditional Termination when sellers refuse to reimburse expenses or may re-sell to your buyers.

• Manually calculate and diarize the Protection End Date (Effective Termination Date + days from 10.3(b)).

• Deliver a Protected Buyer Notice and retain proof.
  
  

🗣️ Sample Seller Script

“If you decide not to sell, that’s okay, but we’ve already covered your photography, RMS, and advertising costs. Under your listing agreement, that’s $2,500. You can either reimburse that and we’ll cancel today, or we can proceed with a Conditional Termination.
That means Section 10 of your agreement remains in effect for 90 days from today, so if any buyer we introduced ends up purchasing within that time, we’re still entitled to our commission (subject to the exceptions in section 10.6).”

💼 Policy: Deposit Refunds After Termination

If a transaction collapses, the deposit refund will be issued by cheque to the buyer(s) named on the purchase contract, as per the Terms of Trust.
Funds are not released until the original cheque has cleared the brokerage trust account in full.

🛠️ Procedure: Termination Steps

1. Determine Termination Type

• Conditional: Listing ends but Section 10 obligations continue for the protection window.

• Unconditional: Listing and all rights end entirely.
  
  

2. For Conditional Terminations

• Provide the broker with:

  • The Effective Termination Date, and

  • The Protection End Date = Effective Termination Date + number of days in 10.3(b).
    
    

• Attach the Protected Buyer Notice.
  
  

3. Prepare the Termination Form

• Seller(s) sign first.

• Send to the broker as the final signer to confirm accuracy before execution.
  
  

4. MLS® Termination

• Once signed by the broker, the listing will be terminated on the MLS®.

• Provide the seller with a fully signed copy for their records.
  
  

5. Internal Brokerage Steps

• Upload the signed termination to the listing file.

• Notify conveyancing to mark the file as collapsed/terminated.

• Diarize the protection end date for commission protection tracking.