To practice real estate brokerage
Notaries and lawyers must act “in the course of their practice”... or be OACIQ licence holders
Note: This article refers to a judgement rendered between 2004 and 2012, at the time when the old Real Estate Brokerage Act (R.S.Q. c. C-73.1) and its regulations were in force. Therefore, the following text refers to the vocabulary applicable at that time. However, the following analysis remains relevant under the Real Estate Brokerage Act (R.S.Q. C-73.2) that came into force on May 1, 2010 and updated on July 13, 2018 after the adoption of Bill 141.
Notaries and lawyers can only engage in a brokerage transaction incidentally and if required under a mandate received from a client in their capacity as notary or lawyer. This is what came out of a decision handed down in 2004 by Court of Québec - Criminal and Penal Division, regarding four cases where the ACAIQ was suing two notaries for illegally practicing the activity of real estate broker.(1).
The penal suit essentially accused these individuals of acting in a way that led others to believe that they were authorized to practice the activity of real estate broker, including by having others sign contracts entrusting them with an exclusive and irrevocable mandate to act as intermediary, for compensation, in the sale of an immovable. One of them was also accused of acting in such a manner as to lead others to believe that he was authorized to practice the activity of real estate broker by demanding compensation that was provided for in the contract for the sale of the immovable, should a rental occur during the term of the contract.
At the hearings, no one denied that the notaries being sued were members in good standing of the Chambre des notaires or that they did not hold a real estate broker or agent certificate issued by the ACAIQ. It was also admitted that the actions of which the notaries were accused were covered under section 1 of the Real Estate Brokerage Act (2) (now sections 1.1 and 3.1 of the REBA).
The notaries argued they were not governed by the Act because they were covered by the exception outlined in section 2 (now section 3 of the REBA) stating that advocates and notaries who, in the course of their practice, engage in a transaction are not subject to the Act. The debate, therefore, was about the interpretation of this section, more specifically about the meaning of the expression “in the course of their practice”.
In his analysis, the judge consulted the legislation and the rules of interpretation of the laws. He also examined the old and the new Notarial Act(3) and the Real Estate Brokerage Act applicable before 1994(4). Before that date the Act included an exception for “practicing” lawyers and notaries. In the judge’s opinion, this notion, referring simply to a professional being a member in good standing of his order, differs from the expression “in the course of his practice” that appears in the Real Estate Brokerage Act.
Other factors, including parliamentary debates on the adoption of the new Real Estate Brokerage Act, led the judge to confirm that the new provision was more restrictive than the old one.
According to the judge, the expression “in the course of their practice” means, simply, “in the course of the normal performance of the functions of notary or lawyer”. The brokerage transaction, therefore, must not be the essential or initial aspect of the mandate entrusted to the notary.
In the four cases examined, there was no evidence of a notarial mandate other than that of selling an immovable, which could have enabled the notaries to act incidentally in the sale of the said immovables. Therefore, the exception provided under section 2 of the Real Estate Brokerage Act (now section 3 of the REBA) does not apply. Thus it was established beyond any doubt that these notaries carried out brokerage activities without holding a certificate issued by the ACAIQ, under circumstances where they were not acting “in the course of their practice as notaries”. The Court found them guilty of the violations of which they were accused. Despite the fact that one of the notaries was appealing the decisions of the judge, invoking an error on the judge’s part in his interpretation of the exception provided under section 2 of the Real Estate Brokerage Act (now section 3 of the REBA) applicable at the time the offences were committed, the guilty verdicts were maintained(4).
For any questions, feel free to contact the information centre Info OACIQ by email at email@example.com or by telephone at 450-462-9800 or 1-800-440-7170.