Personal information and real estate brokerage

By Julie Charbonneau, Attorney Legal Affairs Department, ACAIQ

The confidentiality obligation of real estate brokers and agents resulted from the former Article 3.3 of the Code of Ethics of the Association de l'immeuble du Québec. This article stipulated that "the member shall observe discretion concerning any information of a confidential nature he may obtain in the exercise of his profession". Since January of 1994, real estate brokers have had to deal with much more restrictive measures than this simple provision, now that the Act respecting the protection of personal information in the private sector has come into force.

Act respecting personal information in the private sector

The Act respecting the protection of personal information in the private sector is intended to ensure the protection of personal information included in the files of a private sector business. The Act defines personal information as "any information which relates to a natural person and allows that person to be identified", such as the address, telephone number, age, marital status, parent's name, social insurance number, savings account number, employer, etc. Real estate brokerage firms are directly affected by this Act since they index this type of information. Brokerage firms are private sector businesses which collect a lot of private information when they enter in a brokerage contract with an owner-vendor or when a real estate agent "qualifies" a potential buyer by establishing his financial capacity.

Collection of information

Now that this Act is in force, brokerage firms have been forced to change their practices in the management of the personal information they hold on natural persons. Indeed, this law requires any private company to clearly state the purpose of the file that they established on third parties. Another requirement is that only information relevant to the purpose of the file can be collected. Thus, it is not relevant, during the signing of a brokerage contract, for the real estate agent to ask the owner-vendor to state his income.

Conservation, use and communication of information

Not only is the collection of information limited, but rules are also stipulated regarding the conservation and use of this information. The Act respecting the protection of personal information in the private sector provides that businesses (brokerage firms) must provide for and implement security measures ensuring the confidentiality of the information collected. In practice, brokers must implement any measure required by the Act (such as locked filing cabinets or limited access), as well as informing their employees and making them aware of the fact that they must respect the confidentiality of the information held by the business. Managers and officers of brokerage firms are liable to penal prosecution for non-compliance with certain provisions of the Act. Damage suits may also be filed against individuals who have disclosed information illegally or made a decision based on incomplete or false information. The guiding principle of the Act respecting the protection of personal information in the private sector is that no personal information may be communicated to a third party without the consent of the person concerned. One of the few exceptions to this principle is a nominative list (name, address and telephone number) for the purposes of "commercial prospection" (direct marketing) or philanthropy. For example, it is not uncommon for a real estate agent to transmit information to a potential buyer relating to the precariousness of the vendor's financial position. With the advent of this new law, a vendor considering himself to be injured by the transmission of such information could have recourse against the agent at fault. From now on, before disclosing personal information, it would be prudent to obtain the written consent of the person concerned.

Powers of the "Commission d'accès à l'information"

The "Commission d'accès à l'information" is the agency designated as the "watchdog" over any matter relating to the protection of personal information or the practices of a person who carries on a business and collects, holds, uses or communicates such information to third parties. This commission also has been given broader powers to conduct inquiries and issue orders for the purpose of accomplishing its mission.

Real Estate Brokerage Act and its regulations

Section 113 of the Act respecting personal information, upon coming into force, abrogated Section 21 of the new Real Estate Brokerage Act. This section established the ground rules for disclosure of personal information obtained by a broker or agent in the performance of his or her activities. By this abrogation, the government authorities have indicated their firm intention to clearly subject real estate professionals and all businesses, which collect personal information to the prescriptions of the Act respecting the protection of personal information. There is no longer any question of special rules. However, by its regulations, the new Real Estate Brokerage Act also imposes new responsibilities for files established by brokerage firms. These new obligations are in addition to those imposed by the Act respecting the protection of personal information and also affect the nature, form, content, conservation, use and destruction of files. It is important to take cognizance of all of these provisions and apply them immediately.