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2. Duty to inform

Licensees must act with objectivity whenever informing the party represented by them or the agency for which they act and all other parties to a transaction. That obligation extends to all the material facts relevant to the transaction and to its object, and must be fulfilled without exaggeration, concealment or misrepresentation.1

2.1 Description sheet

2.2 Adverse factors

2.2.1 Declarations by the seller

2.2.2 Specific cases relating to the history of the immovable

2.1 Description sheet

The description sheet is a means for licensees to promote the property, hence the importance of providing accurate and verified information. The description sheet is a constantly evolving document. It must reflect the reality of the property and contain, where appropriate, the mandatory statements set out in section 118 of RBR:

(1) the existence of declarations by the owner of the immovable for sale or lease and the availability of substantiating documents;

(2)  that the immovable is being sold with no legal warranty;

(3)  the name of the broker or agency under the brokerage contract and the licence held, displayed prominently in type of the same colour at least the size of the other information appearing in the document or property description;

(4) that the holder under the brokerage contract has a direct or indirect interest in the immovable and that the notice of disclosure is attached to the description sheet2;

(5)  if the brokerage contract is for the sale of the immovable, that the document or property description is not an offer or a promise that may bind the seller, but is an invitation to submit such offers or promises; and

(6)  unless the owner of the immovable gives written instructions regarding non-disclosure of the owner’s identity, information on the subject of the brokerage contract or the parties to it that is necessary to complete a transaction proposal.

The description sheet may also contain other information that conforms to the Real Estate Brokerage Act and its regulations.

The licensee must place in the agency’s record all documents proving the accuracy of information on the description sheet.

For example, here are some documents that should be placed in the agency’s record when information is included in the description sheet:

  • Renovations or work: invoices, plans and estimates, construction permit;
  • Owner’s identity: Index of immovables of the Quebec Land Register and deed of sale; 
  • Year of construction: certificate of location and assessment roll;
  • Tax amounts: municipal and school tax statements for the current year;
  • Property value: assessment roll (municipal evaluation) for the current year.

Any information that the licensee cannot verify or document must not be entered on the description sheet.

In addition, section 45 of the RBR obliges licensees to give the selling client a copy of the descriptive sheet so that the seller can verify it and ensure that it reflects reality:

45. “A licence holder must without delay give to the party represented a copy of every document containing data used to describe the immovable, enterprise or loan secured by immovable hypothec covered by the brokerage contract, using  any  medium  capable  of  ensuring  its integrity,  accessibility, authenticity and intelligibility.”

It is also important that informative texts must be chosen diligently and prudently, without exaggeration. For example, the expression "in excellent condition" must not be used for a house requiring major repairs.

Ongoing updating

The licensee must make any necessary changes to the description sheet during the term of the brokerage contract based on the new information obtained.  The licensee representing a seller or a buyer must ensure that he always has an up-to-date description sheet.

Thus, he must be vigilant and particularly look out for the new tax rates when they are issued at the beginning of the year, and the three-year assessment when it is filed, in order to make the appropriate changes to the description sheet quickly.

Even before visiting a house, a buyer may very well contact the seller’s broker to get the detailed description sheet for a property. It is therefore common for a buyer to have a description sheet in hand at the time of the visit, but he won’t always make a promise to purchase right away. He may decide to take his time and view other properties; in the end, he may go back to the first property he visited. In the meantime, the detailed description sheet for this immovable may have been modified. To avoid imbroglios or even disputes, the licensee must ensure that the buyer who submits a promise to purchase has the latest version of the descriptive sheet and that the buyer initials it.

Promise to purchase accepted with conditions

When a transaction proposal is accepted conditionally, the licensee may, in  the detailed description sheet, mention the existence of this conditional promise to purchase (CPP).

It is not mandatory to mention the existence of a CPP on the description sheet, but the licensee must discuss with his selling client the consequences of including or not including such a mention, and the options available to the client, always with a view of promoting the client’s interests. The important thing is that this information must be disclosed at least verbally to a buyer interested in making a promise to purchase so that he can make his offer accordingly in accordance with section 96 of RBR.

Taking a property off the market

When a promise to purchase has been duly accepted by the seller of an immovable, a licensee cannot, under any circumstances, accept a buyer’s request to sign and have the seller sign an amendment to a brokerage contract in order to take the property off the market and remove the detailed description sheet and the information contained therein from an information listing service. A property can only be taken off the market at the seller’s request, for instance because the latter no longer wishes to sell.

Such requests often emanate from buyers who hint that they will not follow through on their obligations and the sale will not take place if the immovable is not taken off the market. These buyers are interested in multi-dwelling immovables, mainly duplexes in poor condition whose selling price is below the municipal evaluation or the market value for comparable properties in the same sector. For the signing of the deed of sale, the buyer who signed the promise to purchase is replaced by someone else. Concomitantly, a second transaction for a much higher price is carried out between this buyer and a third party. The transaction carries a mortgage condition which, in accordance with financing rules, must be an insured loan. With the immovable removed from the listing service, the financial institution and the mortgage insurer cannot verify the original asking price and are not otherwise informed of it.

In this context, taking the property off the market goes against the Real Estate Brokerage Act and the regulations thereunder. It involves having a seller make a false declaration on an OACIQ form, making the detailed description sheet disappear or failing to send the notices of sale to the information listing service, all for obscure or dishonest motives on the part of a buyer. Furthermore, a licensee who claims to be unaware that the purpose of this practice is to mask a fraudulent or dishonest operation is wilfully turning a blind eye and could be liable to disciplinary action, even leading to criminal charges.

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Last updated on: December 13, 2022
Numéro d'article: 264835