The Buyer Signed but the Deal Never Closed — Does the Seller Still Owe Commission? Ontario’s Commission-Trigger Rules
It isn’t a clean yes or no. What decides it is who caused the deal to die — and the exact wording of the one clause you signed.
The buyer signed the agreement but the deal never closed — does the seller still owe the listing brokerage its commission?
There’s no blanket yes or no — it turns on who caused the deal to die and on exactly how your commission clause is written. Ontario’s current standard listing agreement (OREA Form 200, Revised 2025) says commission is payable even if the transaction is not completed “if such non-completion is owing or attributable to the Seller’s default or neglect.” It contains no matching express clause for a buyer’s default. And under the Supreme Court of Canada’s decision in Liebig, commission tied to a completed sale is generally not earned just because a buyer was found who later walked away. Read your own clause word for word, and get a lawyer on your specific facts.
Sources: OREA Form 200 Listing Agreement, cl. 2 (Revised 2025, verified verbatim 2026-07-31); H.W. Liebig Co. v. Leading Investments Ltd., [1986] 1 SCR 70 (SCC). General education, not legal advice.
I’m Arthur Zhao, a Broker with 12 years full-time in the GTA. The sellers who get blindsided by this are almost never the ones whose sale closed smoothly — they’re the ones sitting across a lawyer’s desk weeks after a deal collapsed, being handed an invoice from the listing brokerage and asked to pay it. Their protest is always some version of “but nobody ever actually bought the house.” Whether that invoice holds up turns on two things most sellers never read closely until it’s too late: one sentence in the listing agreement they signed months earlier, and a Supreme Court of Canada decision from 1986. Below I walk through how the commission trigger really works — so you understand it while you still have choices, not after the keys never changed hands.
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⚠️This article is general education, not legal advice. Whether commission is recoverable — and how it’s calculated — depends heavily on the exact wording you signed, any Schedule A edits, and the facts of your case (who defaulted, what conditions applied, whether the parties released each other). Before you sign a listing or when a deal can’t close, get advice from a licensed Ontario real estate lawyer about your situation.
The myth: “I found a buyer, so I’ve earned it”
The idea comes from a real common-law principle. An agent who produces a buyer who is ready, willing and able — genuinely willing and financially able to buy on the seller’s terms — has long been said to have earned the fee, whether or not the seller then goes through with it. In much of U.S. law this procuring-cause reasoning does a lot of work.
The trap is assuming Canada works the same way. It doesn’t. Here, that principle bends to the actual words of your listing agreement — and the leading case cuts against the myth, not for it.
What the Supreme Court of Canada actually held (Liebig)
The anchor case is H.W. Liebig Co. v. Leading Investments Ltd., [1986] 1 SCR 70. The listing agreement promised 5% of the “sale price on any sale or exchange,” with commission “to be paid on the date set for completion of the sale.” The agent found a buyer, an agreement of purchase and sale was signed, and the buyer even paid a $15,000 deposit. Then the buyer defaulted and the transaction never completed.
The Court held the agent was not entitled to the commission: “the event upon which the commission was payable … was a completed sale. That event did not occur, not through any fault of the vendor, but because the purchaser was unwilling to complete the sale.” The takeaway that still governs today: the word “sale” means a completed transaction unless the agreement clearly says otherwise. Finding a willing buyer, on its own, does not guarantee the fee.
What Ontario’s current Form 200 actually says
Most Ontario residential listings run on OREA Form 200 (I checked the Revised 2025 version). Its commission clause opens by tying the fee to “a commission of ___% of the sale price … for any valid offer to purchase the Property from any source whatsoever obtained during the Listing Period, as may be acceptable to the Seller.”
Then it does something Liebig basically forced drafters to do — it addresses non-completion head-on, but only in one direction: “The Seller further agrees to pay such commission … even if the transaction … is not completed, if such non-completion is owing or attributable to the Seller’s default or neglect, said commission to be payable on the date set for completion of the purchase of the Property.”
Read those two passages together and the shape emerges: completion is the normal trigger, and the seller’s own default is the express carve-out that survives a dead deal. A buyer’s default gets no equivalent express clause.
ℹ️Reality check: the table above is the general logic of the standard form, not a verdict on your case. In practice, “who caused the non-completion” is rarely clean — a buyer whose financing falls through, or a mutual release, can blur the line — and “Seller’s default or neglect” can be harder to prove than sellers expect. Courts decide on the specific facts.
Seller caused the collapse vs. buyer caused the collapse
💡 My honest take: stop treating “the deal died” as either a shield or a sentence. The two facts that actually decide it are who caused the non-completion and the precise words of the clause you signed. Before you argue either way, open the agreement to the commission section and read the sentence about a transaction that is not completed — slowly.
Don’t forget holdover: a dead deal isn’t always the end of it
One trigger sellers overlook is the Holdover Period. Form 200 provides that for a set number of days after the listing expires, if you strike a deal with a buyer who was introduced to the property or shown it during the listing period, commission can still be owed (reduced by anything you pay another brokerage under a new agreement).
So even if this deal collapses on a buyer default and your listing then expires, the same buyer circling back to close within the holdover window can still satisfy the trigger. “Deal dead + listing expired” does not mean the meter is off — the number of holdover days, and what counts as “introduced or shown,” depend on what’s filled into your specific agreement.
(Whether you can chase a defaulting buyer for the price shortfall, keep the deposit, or seek specific performance is a separate damages question — not the same as the commission trigger, and not this article’s subject.)
- OREA Form 200 — Listing Agreement / Seller Representation Agreement / Authority to Offer for Sale (Revised 2025), cl. 2 Commission and cl. 5 Referral of Enquiries (the standard-form wording quoted in this article)
- H.W. Liebig Co. v. Leading Investments Ltd., [1986] 1 SCR 70 / 1986 CanLII 45 (Supreme Court of Canada)
- Note: these are the standard-form defaults. Your own agreement’s commission rate, Holdover Period length and any Schedule A edits are filled in by the parties — the version you actually signed governs. Get legal advice on your specific facts.
Real Estate Commissions Explained →Ontario Home Buying Guide →The Ontario Selling Blueprint →
Frequently Asked Questions
My buyer defaulted and the sale collapsed — do I still owe the listing agent commission?
Not necessarily — it depends on your clause and the facts. The Supreme Court of Canada in Liebig held that where commission is tied to a completed sale, simply finding a buyer who later defaults does not earn the fee. And Form 200’s express “payable even if not completed” sentence is aimed at seller default, not buyer default. So on a buyer default a seller often has a real argument that nothing is owed — but have a lawyer read your actual agreement (sources: Form 200 cl. 2; Liebig, [1986] 1 SCR 70, 2026-07-31).
I changed my mind and refused to close. Does that change the commission answer?
Yes — this is the scenario most adverse to the seller. Form 200 cl. 2 states in so many words that commission is payable even if the transaction is not completed “if such non-completion is owing or attributable to the Seller’s default or neglect,” payable on the date set for completion. A seller generally cannot escape the fee by walking away. Whether your conduct amounts to “default or neglect” is a fact question — get legal advice if it’s contested (source: Form 200 cl. 2, Revised 2025, 2026-07-31).
Does the OREA listing agreement make commission payable when I accept an offer, or only when it closes?
Both readings surface in practice, which is exactly why wording and facts decide it. Clause 2 ties the fee to a “valid offer to purchase … as may be acceptable to the Seller,” yet computes it on the “sale price” and separately spells out that seller-caused non-completion still pays. The prevailing Ontario understanding lands closer to: completion is the normal trigger, with the seller’s own default as the clear exception. But your specific wording and any Schedule A changes control — read it, don’t borrow someone else’s conclusion (source: Form 200 cl. 2, 2026-07-31).
The deal died and my listing already expired — can the brokerage still claim commission later?
Possibly, because of the Holdover Period. Form 200 provides that for a set number of days after the listing ends, a deal with a buyer who was introduced to or shown the property during the listing period can still trigger commission (reduced by any fee you pay another brokerage under a new agreement). So the same buyer returning to close within that window keeps the risk alive. The number of days is whatever your agreement specifies (source: Form 200 cl. 2 & 5, 2026-07-31).
In Ontario, is producing a “ready, willing and able” buyer enough for the agent to earn commission?
Not on its own. That principle carries real weight in U.S. law, but in Canada it yields to the wording of the listing agreement. Liebig makes clear that where the fee is tied to a completed “sale,” a willing buyer who then defaults generally does not earn it. Whether your agreement shifts the trigger earlier depends on its exact words — which is why you read the clause and, for anything at stake, ask a lawyer (source: Liebig, [1986] 1 SCR 70; Form 200 cl. 2, 2026-07-31).
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