Duties and Obligations of the Broker

Quebec Finance Minister Yves Séguin intends to recommend to his colleagues of the Cabinet “to submit to the National Assembly, during the next parliamentary session, provisions to enable the creation and constitution of a liability insurance fund for real estate agents and brokers”.

In a letter dated December 16, 2003, Minister Séguin indicated to ACAIQ Chairman Serge Brousseau that in light of his analysis and given the support of the Greater Montreal Real Estate Board, he was in favour of the ACAIQ’s application for the creation of a liability insurance fund. Reacting to the news, Brousseau declared himself very relieved with the Finance Minister’s support.

By setting up a professional liability insurance fund for real estate brokers and agents, the Association aims to remedy the shortage of insurance companies prepared to cover brokers’ risks, to counter premium hikes sometimes in excess of 200%, and to eliminate the difficulty for some of getting coverage. The ultimate goal is to continue providing guarantees to consumers carrying out real estate transactions, often the most important of their lives.

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The recent coming into effect of certain provisions of the Act respecting the Agence nationale d’encadrement du secteur financier (also known as Bill 107) is resulting in amendments to the Real estate Brokerage Act. Beginning January 1, 2005, the “loan secured by immovable hypothec” will be removed from the field of application of the Real Estate Brokerage Act. Consequently, the oversight of real estate brokers working in the field of mortgage brokerage will be transferred to the Agence nationale d’encadrement du secteur financier.

The Agence nationale d’encadrement du secteur financier, which also goes by the name of Autorité des marchés financiers, replaces the Bureau des services financiers, the Fonds d’indemnisation des services financiers, the Commission des valeurs mobilières du Québec and the Régie de l’assurance dépôts du Québec. The new agency is also taking over the responsibilities and powers of the Inspector General of Financial Institutions with regards to certain laws. Moreover, the Association des courtiers et agents immobiliers du Québec now reports to another new entity, the Enterprise Registrar, effective February 1, 2004.

Please note that the electronic version of the Real Estate Brokerage Act on the ACAIQ website will soon be updated to reflect these changes. For any question on this topic, please contact the Info ACAIQ information center at (450) 462-9800 or 1 800 440-7170.

Montréal, February 17, 2004 – The Association des courtiers et agents immobiliers du Québec (ACAIQ) is asking Government to implement, as soon as is feasible, a set of regulations for the building inspection practice. For a majority of people, the purchase of a home represents the greatest investment of a life time. An effective inspection aims at identifying any potential problems in order to ascertain the repairs that may be necessary, thus allowing the buyer to conclude his transaction with full knowledge of the facts and the buyer to greatly diminish the risk of a civil action for hidden defects.

Presently, to qualify as a building inspector, a person need not follow any particular training, nor is there any standardize code of deontology. Certain inspectors voluntarily subscribe professional liability insurance. While tens of thousands of inspections are conducted yearly by a few hundred persons in Quebec, the majority of these persons are no longer able to subscribe professional liability insurance. Indeed, the Quebec Association of Building Inspectors, at the present time, is no longer requiring of its members that they subscribe such a coverage for that very reason.

“Even though the building inspection practice is not legally regulated, a real estate agent must recommend to a buyer that he make his offer to purchase conditional on an inspection,” said Mr. Robert Nadeau, President and CEO of the ACAIQ. “ Given this situation, we have undertaken to define a minimum inspection standard to protect one and all, which standard, in fact, is the strictest in North America.”

While waiting on the Government to act, the ACAIQ and the Quebec Association of Building Inspectors (QABI) have provided forms to buyers and sellers of real estate that, once completed, include all of the relevant and required information (work conducted, plans, permit, invoices, warranties) for a just and successful transaction. Designed as a data collection tool, the Declaration by the seller of the immovable form enables the seller to describe, to the best of his knowledge, the major components of the property involved in the transaction. The ACAIQ believes that the Declaration by the seller of the immovable should, in the future, be an obligation imposed upon the seller under the offer to purchase.

The jurisprudence of the Discipline Committee of the Association shows that the involvement of real estate agents in the fabrication and use of false documents can take many forms, including:

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A total of 11,265 certificates were renewed at the end of 2003, where the ACAIQ had 11,264 members at the beginning of the year. In addition, the number of candidates to the entrance examination increased by almost 20% this year. A total of 1,897 candidates took the affiliated agent examination and 205 wrote the chartered broker or agent examination. The success rates were 86.6% and 62% respectively.