Forms and contracts
Before you buy or sell a property, why not take a little time to review the OACIQ’s mandatory and recommended forms used by your broker? They will give you a good idea of the main steps involved in a real estate transaction.
Please note that these forms are provided for illustration purposes only and cannot be used for an actual transaction.
Section 28 of the Real Estate Brokerage Act provides that: “Despite any stipulation to the contrary, the client may terminate the contract at the client’s discretion within three days after receiving a duplicate of the contract signed by the two parties, unless the client has written in its entirety and signed a waiver.
The contract is terminated by operation of law as of the sending or delivery of a written notice to the broker or to the agency.”
Good professional practices dictate, among other things, that an agent should discover and disclose any unfavourable factor related to an immovable in order to inform the buyer. To do so, he must question the seller and inform him of his obligations.
Promise to purchase and financing of an immovable – The importance of the section relating to new hypothecary loan
Financing can make or break a real estate transaction. Therefore, in order to properly advise his clients, it is important that a real estate broker fully understand the obligations relating to new hypothecary loan. These obligations can be found under section 6 of various mandatory Promises to purchase forms of the OACIQ, namely:
When a transaction concerns a property that is not serviced by a municipal water system or equipped with a wastewater treatment system, financial institutions usually want assurances that the water is drinkable or the system is up to code before authorizing a loan.
The seller’s broker (whether acting on his own account or on behalf of an agency) cannot reduce his compensation in order to favour his own buyer in a transaction, as this situation could constitute an unfair practice against the buyer’s broker or agency.
PRIOR conditions and verifications required for brokers to operate within a business corporation and remuneration to be paid to the corporation by the broker’s agency
With the coming into force on January 1, 2012 of amendments to the Real Estate Brokerage Act and the regulations thereunder, a broker acting on behalf of an agency will be able to carry out his activities within a business corporation (company) which he controls. The remuneration formerly payable to the broker will now be payable to this corporation.
The OACIQ did not publish any mandatory form for contracts concluded in mortgage brokerage field. However, regulations now provide statements which must necessarily be contained in any contract concluded with a borrower, by which a broker agrees to act as intermediary to obtain a loan secured by immovable hypothec.
We are pleased to inform you that the Québec government has initiated the process to act on the OACIQ’s recommendation to defer the effective date of the Regulation respecting contracts and forms – and therefore the use of the new forms themselves – to July 1, 2012.
You are a real estate broker and you are working in a team. You have certainly put in place, within the team, a way for effectively circulating the information regarding visit requests and promise to purchase presentation; and this is a good thing. We have already discussed this matter in a previous column. We have particularly dealt with the case of members belonging to the same team who have not taken the necessary measures to ensure that visit requests are effectively dealt with and who have been penalized by the OACIQ discipline committee.
On February 16, 2012, La Presse published an article entitled Courtage immobilier : bientôt un meilleur encadrement (Real Estate Brokerage: soon a better supervision) in which it is stated that it will be mandatory to sign an exclusive brokerage contract when a buyer wishes to be represented by a broker. This statement has raised many questions and needs to be qualified.