Who Pays REALTOR® Fees When Renting?

Who pays whom — the actual cash flow

The landlord signs a listing agreement with the listing brokerage that sets total commission and the cooperating share offered to a buyer/tenant brokerage. When a lease is signed and the tenant pays the first month’s rent and the last-month’s rent deposit, the landlord pays the agreed commission directly to the listing brokerage out of those funds (or out of pocket, depending on lease structure). The listing brokerage retains its share and remits the cooperating commission to the tenant’s brokerage. HST at 13% applies on top, paid by the landlord.

The tenant doesn’t see a deduction or a fee for representation. The cost flows entirely through the landlord and reduces the landlord’s effective net rent for the first month, which is why landlords in tight markets sometimes try to negotiate the commission down to half-a-month or to skip cooperating commission entirely — a move that almost always backfires on lease-up speed.

Common rental commission structures in Ontario

• One month’s rent total commission for a 12-month lease, split between listing and cooperating brokerages. Most common in the GTA.
• Half a month per side on a one-year term — functionally identical to the above, expressed differently.
• Pro-rated for shorter terms (e.g. half month total for a 6-month lease, three-quarters of a month for a 9-month lease).
• Reduced commission for longer terms — some listing agreements scale down for 24-month or 36-month leases.
• Renewal commission — some listing agreements include a smaller commission if the tenant renews; most do not.

When a tenant might end up paying commission

If a tenant signs a tenant-representation agreement that requires them to top up commission when the landlord’s offered amount is below a contractually specified threshold, the tenant could end up paying the difference. This is unusual in Ontario residential rentals but completely legal — always read the representation agreement before signing, and ask specifically whether the agreement contemplates any tenant-paid commission and under what circumstances.

Tenant-paid commission is more common in three scenarios: FSBO landlords who don’t offer cooperating commission (the tenant’s agent and the tenant negotiate directly), commercial leases (where tenant-rep brokers often charge their tenant directly under a separate engagement), and some luxury or executive rentals where the tenant prefers to retain dedicated representation. In all three cases, the cost should be quantified in writing.

Why this matters for showing access in tight markets

Active rental units in Toronto often see multiple applications within hours. A specialist tenant-agent will have a complete application package ready (credit check, employment letter, references, last two pay stubs) and submit immediately upon a successful showing — sometimes within 90 minutes of the showing ending. A buyer-agent who isn’t a rental specialist may take 24–48 hours to assemble the same package, and the unit will be gone.

If you’re looking for a Toronto rental, the difference between an experienced rental agent and a generalist is measured in successful applications. See our guide on finding a good rental agent for the criteria we use ourselves, and our Toronto rentals page for current listings.

Quick reference: what a typical Toronto rental commission looks like

• $2,800/mo 1-bed condo, 12-month lease: $2,800 total commission, $1,400 + HST per side. Landlord pays $3,164 all-in.
• $3,500/mo 2-bed condo, 12-month lease: $3,500 total commission, $1,750 + HST per side. Landlord pays $3,955 all-in.
• $5,000/mo townhouse, 12-month lease: $5,000 total commission, $2,500 + HST per side. Landlord pays $5,650 all-in.
• $2,500/mo 1-bed, 6-month lease: $1,250 total commission (half month, pro-rated), $625 + HST per side.

Frequently Asked Questions

Is rental commission paid all at once or spread over the lease?

All at once — it’s typically paid by the landlord on the lease commencement date out of the first month’s rent or first-and-last deposit. There is no monthly commission payment in standard Ontario residential rentals.

Do landlords always offer cooperating commission?

Most do because it widens the tenant pool. Some FSBO landlords offer no cooperating commission — the tenant’s agent then negotiates with the tenant for any compensation, which should be in writing in the tenant-representation agreement.

Are there application fees in Ontario?

No — landlords cannot charge fees for considering a rental application. They can charge a refundable key deposit and require first and last month’s rent. Anything beyond that is a Residential Tenancies Act violation.

What about credit-check fees?

Landlords can ask for a credit report and may run their own. They cannot charge the tenant for the credit check as a precondition of the application; some tenants pull and provide their own Equifax/TransUnion report to streamline the process.