Bill 141 to amend the Real Estate Brokerage Act: the OACIQ’s initial observations
Following the introduction by Finance Minister Carlos Leitão of Bill 141, an Act mainly to improve the regulation of the financial sector, the protection of deposits of money and the operation of financial institutions, which amends the Real Estate Brokerage Act, on October 5, the OACIQ would like to highlight the main changes observed.
Definition of a brokerage transaction
- Bill 141 defines a brokerage transaction in relation to the concept of a real estate brokerage contract, by which an individual is appointed to act as an intermediary in the sale, purchase or rental of an immovable in return for remuneration.
- The brokerage transaction is made up of the actions taken in the execution of the contract.
Leasing brokerage and brokerage involving a mobile home
- Under Bill 141, a person who engages in a leasing brokerage transaction (residential or commercial) or who acts in connection with the lease or sale of a mobile home is no longer required to hold a licence. However, a person may seek such a licence from the OACIQ.
- Individuals who engage with a broker or agency in a transaction are entitled to the protections of the Act.
- Bill 141 transfers the supervision and control of mortgage brokerage to the Autorité des marchés financiers. Transitional provisions have been set out.
Contracts and forms
- The power to determine real estate brokerage contracts (as well as the other acts relating to a brokerage transaction evidenced on a form) now rests with the Finance Minister. Still, the government recognizes the expertise of the OACIQ by providing that the organization will develop the brokerage forms, which must be approved by the Minister.
- Under the Bill, it is no longer necessary to consult the Chambre des notaires.
- The consumer retains the right to terminate a residential real estate brokerage contract within three days of receiving it and may not waive this entitlement.
Removal of the obligation to hold an annual general meeting
- Bill 141 clarifies the regulatory role of the OACIQ by removing the organization’s obligation to hold an annual general meeting.
- The OACIQ will determine how and when relevant information will be communicated to licence holders.
- The number of directors on the board of directors changes from 13 to 12. The board of directors must be made up of 6 directors appointed by the Minister of Finance and 6 elected directors, including 3 from the residential sector.
- The directors may hold office for no more than 10 years, consecutively or otherwise.
- The chair of the board of directors must be elected among the individuals appointed by the government.
Increased criminal and disciplinary sanctions
Bill 141 increases the minimum and maximum fines in disciplinary and criminal matters.
- In disciplinary matters, the minimum and maximum fines increase from $1,000 to $2,000 and from $12,500 to $50,000, respectively.
- With regard to the determination of the amount of a fine, the Bill stipulates that the prejudice suffered as a result of the offence and the benefits derived from it must be taken into consideration.
- In criminal matters, the minimum and maximum fines for a natural person increase from $1,500 to $2,500 and from $20,000 to $62,500. For legal persons, the fines increase from $3,000 to $5,000 and from $40,000 to $125,000.
Governance of the Fonds d’assurance responsabilité du courtage immobilier du Québec (FARCIQ)
- The board of directors of the FARCIQ is replaced by the Comité de decision (decision-making committee), which becomes a committee of the board of directors of the OACIQ.
- The latter continues to hold an insurer’s licence and is subject to the rules set out in the Insurers Act.
Other elements of interest
The Bill specifies other elements of interest, including the following:
- The notion of a new broker or beginner broker has been removed. Indeed, the focus is on the obligation of supervision of agency licence holders and agency directors and executives. Under the Bill, failure to meet this obligation may result in an ethical or a criminal offence.
- The mandates of the chair and vice-chair of the discipline committee are extended from three to five years.
It is important to note that the amendments set out in Bill 141, including those outlined here, do not come into effect immediately. The OACIQ will therefore pursue its regular activities, as well as its mission to protect the public.
Seeing as the government has provided for consultations, the OACIQ will communicate its comments and thoughts and keep its stakeholders informed of all further developments.