Who Pays Realtor Fees When Renting in Ontario?
One of the most common questions from tenants and landlords alike is who pays the realtor's commission in a rental transaction. In Ontario, the answer is straightforward: the landlord almost always pays. This guide explains how rental commissions work, what landlords and tenants should expect, and the benefits of using a real estate agent for your next lease.
How Rental Agent Fees Work in Ontario
When a rental property is listed on the MLS by a landlord's agent, the listing agreement specifies the commission to be paid and how it is shared with a cooperating (tenant's) agent. Here is how the process typically works:
Landlord Lists the Property
The landlord signs a listing agreement with their agent, which includes the agreed-upon commission (typically one month's rent) and how it will be shared with a cooperating agent.
Tenant's Agent Shows Properties
A tenant's agent searches MLS listings, arranges viewings, and helps the tenant find a suitable property. The tenant pays nothing for this service.
Lease Is Signed
Once the tenant and landlord agree on terms and sign the Ontario Standard Lease, the landlord pays the commission, which is split between the two brokerages.
Commission Is Paid
The landlord pays the total commission (usually one month's rent + HST). The listing brokerage typically shares 50% with the tenant's agent's brokerage.
Landlord vs. Tenant: Who Pays What?
What Landlords Pay
- Agent commission (typically one month's rent)
- HST on commission (13%)
- Any marketing costs agreed upon with their agent
What Tenants Pay
- First month's rent (upon signing the lease)
- Last month's rent deposit (refundable, applied to final month)
- No commission or agent fees in standard arrangements
Important Note for Tenants
Under Ontario's Residential Tenancies Act, landlords cannot charge tenants fees beyond the lawful rent and a last month's rent deposit. If a landlord or agent asks you to pay a "finder's fee" or commission, this is generally not enforceable for residential rentals. Report any such requests to RECO.
Benefits of Using an Agent for Rentals
Whether you are a landlord looking to fill a vacancy or a tenant searching for your next home, working with a real estate agent offers significant advantages:
For Landlords
- Professional tenant screening and credit checks
- Broader exposure through MLS listing
- Proper lease documentation using the Ontario Standard Lease
- Market analysis to set competitive rental pricing
- Reduced vacancy time through active marketing
For Tenants
- Access to MLS rental listings not advertised publicly
- Professional lease negotiation on your behalf
- Neighbourhood expertise and fair market rent guidance
- Verification of landlord legitimacy and property condition
- No cost to the tenant in standard arrangements
Frequently Asked Questions
Who typically pays the realtor fees when renting in Ontario?
In Ontario, the landlord almost always pays the realtor fees when a tenant is placed through a real estate agent. The standard commission for a rental transaction is typically one month's rent, paid by the landlord to the listing brokerage, which then splits the commission with the tenant's agent brokerage if one is involved. Tenants generally do not pay any commission to their agent.
How much is the realtor commission for a rental in Ontario?
The standard rental commission in Ontario is typically equivalent to one month's rent plus HST. This is paid by the landlord. For example, if the monthly rent is $2,500, the landlord would pay approximately $2,825 (including 13% HST) as the total commission. This commission is usually split between the listing agent's brokerage and the tenant's agent's brokerage.
Can a landlord ask a tenant to pay the realtor fee?
Under Ontario law, a landlord cannot charge a tenant a fee for the agent's services. The Residential Tenancies Act prohibits landlords from charging fees beyond the lawful rent and a refundable last month's rent deposit. Any attempt to pass realtor fees to a tenant for a residential lease is not enforceable and may violate provincial regulations.
Do I need a realtor to find a rental in Ontario?
You do not need a realtor to find a rental, but working with one offers significant advantages. A tenant's agent can access MLS rental listings, arrange viewings, negotiate lease terms, and provide guidance on fair market rents. Since the landlord typically pays the commission, tenants can benefit from professional representation at no direct cost.
What are the benefits of using a realtor when renting?
Using a realtor when renting provides access to a wider range of listings (including MLS-listed properties), professional lease negotiation, market knowledge to ensure you are paying fair rent, help with application preparation, and an advocate who works in your interest. Your agent can also verify the legitimacy of the landlord and the property.
Are there situations where a tenant might pay a realtor fee?
In rare cases, if a tenant hires an agent specifically to conduct a broad search and the resulting property is not listed on MLS (such as a private rental), the tenant and agent may agree to a fee arrangement. However, this is uncommon in Ontario's residential rental market. For standard MLS-listed rentals, the landlord pays all realtor commissions.