Duties and Obligations of the Broker

Carrying out the activity of a real estate or mortgage agency or broker illegally is a violation of the Real Estate Brokerage Act. 

Montréal, November 13, 2003 – The Association des courtiers et agents immobiliers du Québec (ACAIQ) is urging the government to approve the creation of a Professional Liability Insurance Fund for Québec real-estate brokers and agents before the end of this year, in order to ensure protection for them, as they practice their profession, as well as for consumers. Unless the government acts swiftly, before December 31, brokers and agents may no longer be able to guarantee their responsibility to the public.

Professional liability insurance is mandatory, and brokers now have to obtain coverage from private insurers. This insurance protects consumers in the event of claims for any mistakes, errors, negligence, or omissions that brokers or agents might make in carrying out their duties.

“The Fund will put an end to the problems of insurers who are reluctant to cover brokerage risks, sharp premium hikes that sometimes amount to more than 200%, and the difficulty that some professionals have in obtaining coverage,” said ACAIQ President and Executive Director Robert Nadeau. “The ultimate goal is to continue to ensure protection for consumers in transactions that are often the most important ones of their lives. That is why it is in the best interests of both consumers and the industry in general to create this type of Fund in order to protect the public by ensuring adequate coverage.” “This makes amending the Real Estate Brokerage Act urgent.”

The Fund, which would be managed by the ACAIQ, would also ensure that consumer claims are processed faster and more efficiently, while providing consumers with better protection.

In the context of a real estate transaction, it frequently happens that a buyer makes a deposit on the sale price. The broker who receives this sum must then, if he is acting for an agency, gives it immediately to the agency to be put in its trust account or in the account of the agency to which your agency delegated its obligations. If the broker is acting on his own account, he must put it in his trust account. The sum received from the buyer must remain in the trust account until it is required by the notary for signing of the deed of sale.

Very often following a visit to an establishment, the Inspection Department will request certain adjustments to be made or corrective action to be taken right away or within a given period, depending on the urgency of what has been observed. These requests can be forwarded directly to the broker working on his own account, the executive officer of the agency, or the representing brokers.

PRACTICES SERIES

Sometimes a seller may have particular requirements regarding the timing for submitting promises to purchase to him regarding an immovable for sale. For example, a seller may want to consider all promises to purchase at the same time, on a predetermined date.

With the coming into force of the new Real Estate Brokerage Act on May 1, 2010, the ACAIQ changed its name to OACIQ, i.e. Organisme d’autoréglementation du courtage immobilier du Québec. But what exactly is the OACIQ?

As provided for in the Real Estate Brokerage Act, the OACIQ Board consists of eleven (11) Directors, eight (8) of whom are elected among licence holders and the other three (3), who are neither broker, manager nor executive officer of an agency, are appointed by the Minister of Finance.

The clause concerning the compensation, if any, that the seller will pay to the broker is, of course, very important. In particular, it is necessary to properly understand under what conditions such compensation will be due and as of when.

Since the coming into force of the new Real Estate Brokerage Act on May 1, 2010, brokers must open and maintain a trust account, regardless of their field of practice. All brokers have access to a trust account without exception.

Source: OACIQ

December 2010 • By opening the door to computer technologies (digitization), the new Real Estate Brokerage Act has introduced new challenges when it comes to the keeping of registers and records, making it necessary last May for the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) to develop and issue a Normative framework for the preservation, archiving and maintenance of records and registers. Since then, several agency executive officers or brokers have raised the following question: can paper registers and records be destroyed once the documents have been digitized?

The answer is yes, as long as agencies or brokers acting on their own account follow the terms and obligations to which they are bound under various legislative instruments.

The Act to establish a legal framework for information technology states that documents required by law to be retained (such as records and registers) may be destroyed as long as they have been transferred in accordance with the requirements of the Act and the destruction is done following certain conditions.