A real estate agent acts negligently when they fail to use the care, skill, and diligence a reasonable agent would use, and that failure causes you a loss. In Ontario, every agent and brokerage must follow the Trust in Real Estate Services Act, 2002 and a Code of Ethics that the Real Estate Council of Ontario enforces. When an agent breaks those duties and you lose money because of it, you can file a complaint, sue for damages, or do both.
This guide explains what counts as negligence, the consequences an agent can face, how long you have to act, and the exact steps you can take to protect yourself.
What Is Real Estate Agent Negligence?
Real estate agent negligence happens when an agent owes you a duty of care, breaks that duty, and causes you harm. A careful agent checks facts, discloses what they know, meets every deadline, and keeps your interests first. When yours did not, and you paid for it, that gap is negligence.
This is a busy field. RECO regulates more than 110,000 agents and brokerages across Ontario and receives roughly 4,000 complaints a year. Most deals close without a problem. The ones that go wrong, though, can cost you tens of thousands of dollars, so it pays to know where you stand.
Which Laws Protect You When You Hire an Agent?
Three things set the standard your agent must meet.
TRESA. Since December 1, 2023, the Trust in Real Estate Services Act, 2002 has governed every agent and brokerage in Ontario. It replaced the older Real Estate and Business Brokers Act.
The Code of Ethics. This regulation under TRESA spells out the duties your agent owes you, including honesty, competence, fair dealing, and disclosure of facts that matter to your decision.
The courts. On top of any penalty RECO hands down, Ontario courts can hold an agent liable for negligence and order them to pay your losses. RECO enforces the rules. The courts award the money.
What Are the Four Elements of a Negligence Claim?
To win a negligence claim in Ontario, you must prove four things. Miss one and the claim fails.
| Element | What you must show |
| Duty of care | The agent owed you a professional duty to act with reasonable care and skill. |
| Breach | The agent fell below the standard a competent agent would meet. |
| Causation | That breach directly caused your loss, and the loss was a foreseeable result. |
| Damages | You suffered a real, measurable loss that you can prove with evidence. |
This is why your records matter. Save the listing, your emails, the agreement, inspection reports, and any repair quotes. Strong evidence is what turns a complaint into a winnable case.
What Are Common Examples of Agent Negligence?
Negligence shows up in a handful of familiar ways. Here are the ones we see most often.
Failing to Disclose a Defect
If your agent knew about a serious problem, such as water damage, mould, or a pest infestation, and stayed quiet, that silence can be negligence. Material facts have to come out before you commit.
Misrepresenting the Property
Wrong square footage, an inflated lot size, or a feature that simply does not exist can push you into a bad purchase. The information your agent gives you has to be accurate.
Weak Pricing and Market Analysis
An agent who skips the comparable sales and prices your home far above or below the market can cost you weeks of waiting or thousands of dollars at closing.
Conflicts in Multiple Representation
When one brokerage represents both the buyer and the seller in the same deal, that is called multiple representation. TRESA allows it only when the brokerage gives you written disclosure and you agree in writing. An agent who hides the conflict, or quietly favours the other side, breaks the duty they owe you.
Mishandling Your Deposit or Deadlines
Brokerages must hold your deposit in a trust account and track every condition date. A missed financing or inspection deadline can sink the deal or put your deposit at risk.
Skipping Due Diligence
A careful agent flags the inspections you need, checks zoning and permitted use, and for a condo points you to the status certificate before you sign. Skip these steps and you can inherit repairs, restrictions, or a special assessment you never saw coming.
What Can a Negligent Agent Face?
An agent who acts negligently can face action on several fronts at the same time.
RECO Discipline
You can report an agent to RECO. RECO investigates and, if it finds a breach, can fine the agent, attach conditions to their licence, suspend them, or revoke their registration. Under TRESA, RECO can also issue administrative penalties directly for less serious breaches. An agent found guilty stays named on RECO’s public register for at least five years.
Action is not automatic, though. Of the roughly 4,000 complaints RECO receives each year, only about 100 reach the discipline committee. A clear, well documented complaint stands a far better chance.
A Civil Lawsuit
You can sue the agent and the brokerage for the money you lost. Prove all four elements and a court can order damages that cover your direct losses and related costs.
A Breach of Contract Claim
Your representation agreement is a contract. If the agent failed to do what it promised, you may also have a breach of contract claim, and in some cases the agreement can be set aside.
Criminal Charges in Rare Cases
If an agent crosses into fraud or theft, the matter can move beyond RECO and the civil courts into criminal charges. These cases are rare, but they carry the heaviest penalties, including jail.
How Do You Take Action Against a Negligent Agent?
You have three main routes. They do different jobs, so many people use more than one.
| Route | Best for | What it can deliver | Cost and speed |
| RECO complaint | Misconduct and ethics breaches | Discipline, fines, licence action | Free, slower, no money back to you |
| Mediation or arbitration | A dispute both sides want to settle | A negotiated payment or fix | Lower cost, faster than court |
| Civil lawsuit | Recovering money you lost | A damages award against the agent and brokerage | Higher cost, slower, strongest for payback |
Keep one thing in mind. A RECO complaint can punish the agent, but it does not pay you back. To recover your losses you usually need the civil route. Start by gathering your file, writing down the key dates, and getting repair estimates. Then speak with a lawyer before you accept any offer to settle.
How Long Do You Have to Sue in Ontario?
You usually have two years to start a lawsuit. Under the Limitations Act, 2002, the clock starts on the day you knew, or reasonably should have known, that you had a claim. That is not always the closing date. Wait too long and a court can throw the case out no matter how strong it is, so act early.
How Can You Protect Yourself Before You Hire an Agent?
A few simple habits prevent most disputes before they start.
- Search the agent and brokerage on RECO’s public register before you sign anything.
- Read the representation agreement and ask plainly who the brokerage acts for.
- Get every promise, disclosure, and instruction in writing.
- Book your own home inspection rather than relying on what you are told.
- For a condo, read the status certificate and the financial statements.
- Keep a copy of everything, from the first email to the final signature.
Frequently Asked Questions
Can I sue my real estate agent for negligence in Ontario?
Yes. If your agent owed you a duty, broke it, and caused you a real loss, you can sue both the agent and the brokerage for damages. You generally have two years from the day you discovered the problem to file.
What is the difference between a RECO complaint and a lawsuit?
A RECO complaint can discipline the agent and protect the public, but it does not put money back in your pocket. A lawsuit is how you recover what you lost. You can pursue both at once.
Does my agent have to tell me about problems with the property?
Your agent must disclose material facts they know about. If they knew about a serious defect and stayed silent, that can be both negligence and a breach of the Code of Ethics.
Is it legal for one brokerage to represent both the buyer and the seller?
Yes, but only with limits. This is called multiple representation, and TRESA allows it only when the brokerage gives written disclosure and both sides agree in writing. Hiding the conflict is a breach.
How much does it cost to take action against an agent?
Filing a RECO complaint is free. A lawsuit costs more and takes longer, but it is the route that recovers your losses. Many lawyers will review your situation first and tell you whether a claim is worth pursuing.
How long does a negligence case take?
It depends on the route. A RECO complaint can take several months. A civil claim can run a year or more, though many cases settle earlier through negotiation or mediation.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
