Regulatory amendments
in residential and commercial real estate brokerage
IN FORCE SINCE MARCH 23, 2023
Further to the adoption of Bill 1411 in 2018, the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), in collaboration with the Ministère des Finances, began work to update the regulations.
Following the usual regulatory adoption process, which included a consultation held by the government last August, the final regulations were published in the Gazette officielle du Québec on March 8, 2023 and came into force as on March 23, 2023.
The purpose of these regulatory amendments is to adapt to the new realities of real estate brokerage activities, to strengthen the framework in order to maintain its credibility and relevance, and to reduce the risks of non-compliance through regulatory relief when necessary. Other adjustments were also required in order to harmonize the terminology with that which is now used in the Real Estate Brokerage Act (REBA) and, in particular, to remove references to mortgage brokerage oversight.
This text explains the nature of the amendments made to the following regulations:
- Regulation respecting brokerage requirements, professional conduct of brokers and advertising (c. C-73.2, r. 1).
- Regulation respecting contracts and forms (c. C-73.2, r. 2.1) (repealed).
- Regulation respecting broker’s and agency licences2 (c. C-73.2, r. 8).
- Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies (c. C-73.2, r. 4).
- Regulation respecting the Real Estate Indemnity Fund3 (c. C-73.2, r. 5).
- Regulation respecting disciplinary proceedings of the OACIQ (c. C-73.2, r. 6).
To review all regulatory amendments, consult the official government documents in PDF format:
Issue of broker's and agency licences (Amend.)
Records, books and registers, trust accounting and inspection of brokers and agencies (Amend.)
Overview of key specific measures
- Duty to inform clients of the existence and mission of the OACIQ
- Conservation of information on persons whose identity has been verified
- Disclosure of any agreement related to the object of the brokerage contract
- Change concerning the obligation to maintain a trust account
- Start of marketing and listing the property on the information dissemination service
- Qualification as agency executive officer
- Waiving of part of the remuneration
- Strengthening of rules governing representation and advertising
- Strengthening of measures related to OACIQ examinations
- Repeal of the Regulation respecting contracts and forms (c. C-73.2, r. 2.1)
- Definitions of “exchange of an immovable” and “enterprise”
1. Duty to inform clients of the existence and mission of the OACIQ
In 2019, the OACIQ launched an initiative to encourage licence holders to better inform their clients about the regulator’s mission in the area of real estate brokerage and the protection mechanisms available under the law, such as the assistance service, professional liability insurance, the disciplinary process, etc. This article written in clear language contains useful information on the subject for consumers and was made available to licensees, who could be give it to clients.
In addition, since June 2022, a special box has been added to mandatory forms to describe the mission of the OACIQ and ensure that the information is conveyed on to consumers.
WHAT IS NEW
Henceforth, a licence holder acting as intermediary for a party has an obligation to give the party a document describing the mission of the OACIQ. This enables consumers to be better informed of their rights and protections.
A. If one of the OACIQ mandatory forms is used and the box about the OACIQ is placed before the signature block, there is no specific action to be taken. The box states:
ORGANISME D’AUTORÉGLEMENTATION DU COURTAGE IMMOBILIER DU QUÉBEC
The AGENCY or the BROKER declares being duly registered with the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). The mission of the OACIQ is to protect the public. In particular, it ensures that brokerage transactions are carried out in compliance with the Real Estate Brokerage Act. It oversees the activities of real estate brokers and agencies and enforces the rules of professional conduct. The OACIQ issues licences to real estate brokers and agencies. Consumers may contact the OACIQ to submit a request for assistance or investigation regarding a real estate broker or agency, or to get information on real estate transactions and the oversight of licence holders and agencies.
B. If the licensee uses a non-mandatory form, or a mandatory form that does not contain the text of the box referred to in (A), he must either:
a) Incorporate the text of the above-mentioned box about the OACIQ into the form; OR
b) Submit a separate document prepared by the OACIQ. Only this mandatory OACIQ document can be given to the party.
This requirement arises from the new section 16.1 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising which states:
“Where the party for whom a licence holder agrees to act as an intermediary does not receive a mandatory form containing an informative text in particular on the mission of the Organisme d’autoréglementation du courtage immobilier du Québec, the licence holder
must, without delay, give that party a document containing such text.”
The obligation to inform clients of the existence and mission of the OACIQ applies to all licence holders, whether they operate in residential or commercial real estate.
2. Conservation of information on persons whose identity has been verified
The identity verification obligation has been strengthened to better harmonize with that set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17), to which licence holders are also subject.
WHAT IS NEW
This amendment requires the licence holder to note in the record the information on any party whose identity he verifies. Thus in situations where one of the parties is not represented, the licence holder will be required to enter this information in the record.
Section 29 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising states:
“29. A licence holder must verify and ascertain the identity of the party represented as well as the identity of the other parties to the transaction if the latter parties are not represented by another licence holder.
The licence holder must note in the record the information concerning the identity of the represented party the party whose identity is verified by the licence holder and, where the licence holder has not been able to meet the party in person, keep in the record the documents used to verify the identity of the party.”
More details on identity verification rules.
Rules regarding the retention of personal information.
Note that the obligation to verify the identity of one’s client and of any unrepresented party and to note the information in the record is the responsibility of the licence holder who is bound to his client by a brokerage contract.
In this context, the collaborating broker without a contract who works, de facto, for the seller's broker, could eventually be called upon to perform this task. Thus, he will verify the identity of the unrepresented buyer when filling out the promise to purchase form. Since the duty to verify the identity of the unrepresented party is ultimately the responsibility of the seller's broker in this situation, the latter must ask the collaborating broker to confirm that this verification was done according to the rules and must keep proof to that effect on file. If in doubt, the seller's broker should ask him to send him the information collected through the Identity verification form. Remember that both the seller's broker and the collaborating broker without a contract work for the seller and are subject to the same obligations regarding the protection of the parties' personal information.
3. Disclosure of any agreement related to the object of the brokerage contract
The new wording of section 36 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising further clarifies the duties of licence holders in relation to conflicts of interest:
“36. A licence holder who has entered into a real estate brokerage contract must, without delay and in writing, disclose to the represented party every remuneration agreement in the holder’s favour related to the object of the contract. Every remuneration agreement in favour of a licence holder that may place the interest of the licence holder in conflict with that of a party to a transaction must be disclosed to the party in writing.
In addition, the licence holder must without delay make a written disclosure to that party stating the identity of the other person or partnership from which the remuneration is owing, the nature of the holder’s relation with that person or partnership, and the nature of the remuneration owing if it is a non-monetary benefit.”
The old wording suggested that there were remuneration agreements that did not place the licence holder in a conflict of interest.
WHAT IS NEW
Licence holders must henceforth disclose to the party they represent any remuneration agreement they may have in relation to the object of the contract to which they are a party.
In concrete terms, the licence holder no longer has to decide whether or not an agreement places him in a conflict and whether he has to disclose it. This obligation is now clarified to require licence holders to disclose every remuneration agreement that is in any way related to the relationship between the licence holder and his client pursuant to the contract that binds them.
This provision is now better harmonized with sections 38, 39 and 40 of the same regulation.
It should be noted that although for now some brokerage contract forms still contain the old wording for section 36,4 it is important, since March 23, 2023, to disclose in writing any remuneration agreement the licence holder may have in relation to the object of the brokerage contract. In order to fulfil his obligation to document his record, the licence holder will also be required to keep a proof of having disclosed this information to his client in writing.
The disclosure obligation applies to all licence holders, whether they operate in residential or commercial real estate brokerage.
More details on conflicts of interest.
4. Change concerning the obligation to maintain a trust account
In the past, licence holders had an obligation to open and maintain a trust account, even if they did not receive sums for others. The OACIQ Inspection Department had noted in the past that a significant number of licensees’ trust accounts were inactive, which increased risks and added an unnecessary administrative burden for brokers and agencies as well as for financial institutions. Therefore, since March 23, 2023, there has been a beneficial easing of risk management within agencies holding inactive accounts.
WHAT IS NEW
Since March 23, 2023, licence holders are exempt from opening and maintaining a trust account if they do not receive any sums for others (deposits, advances on remuneration, expenses paid by the client, security deposits for leases, etc.)
However, as soon as the licensee receives an amount of money for others, he must immediately open and maintain a trust account in accordance with his obligations under the REBA, with the required documents. He must also make the annual declarations required during the OACIQ self-inspection.
Section 24 of the Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies now reads:
“24. A licence holder broker must, in accordance with this Chapter, open and maintain a trust account.
Where a broker acts for an agency, the obligations related to the opening and maintaining of a trust account are delegated to the agency. The broker remains responsible with the agency for the obligations imposed in this Chapter.
An agency may delegate to only one other agency the obligations related to the opening and maintaining of a trust account that were delegated to the agency by the brokers acting for the agency. Those brokers remain responsible for the obligations imposed in this Chapter, with their agency and the agency to which they were delegated. A written notice of the delegation must be sent to the Organization without delay.
This section does not apply to a licence holder broker who files a declaration with the Organization to the effect that the broker:
(1) is employed by the Organization; or
(2) is employed by a person who is not an agency and the broker engages, as such, in no brokerage transaction described in section 1 3.1 of the Real Estate Brokerage Act (chapter C-73.2).
3° receives no deposit, advance on remuneration or costs from clients or any other sum for others.
If a licence holder is no longer in the situation described in subparagraph 3 of the fourth paragraph, he or she must notify the Organization in writing without delay and comply with the obligations related to trust accounts provided for in this Chapter.”
Section 43 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising has also been reworded to take into account situations where a party wishes to remit the deposit to the notary rather than to the licence holder. Thus, it is only when the deposit is remitted to the licence holder that the latter is required to deposit it into a trust account maintained by a licence holder (the licensee’s own account or that of another licensee):
“43. When acting as an intermediary in connection with a brokerage transaction described in section 1 3.1 of the Real Estate Brokerage Act (chapter C-73.2), a licence holder must recommend a reasonable deposit be made.
A licence holder who receives such a deposit may not be placed elsewhere than in the only place it in a licence holder’s trust account.
This regulatory relief applies to all licence holders, whether they operate in residential or commercial real estate.
For more information, check out the FAQ - Exemptions from maintaining a general trust account.
5. Start of marketing and listing of the property on the information listing service
Section 44 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising has been amended:
“44. If a party represented wishes to use an information listing service in connection with an immovable or enterprise, the licence holder must list the immovable or enterprise with that service without delay when the marketing of the immovable or performance of the real estate brokerage contract begins. The listing must be made before the marketing of the immovable or enterprise or performance of the brokerage contract begins, unless written instructions to the contrary are given by the party represented.”
The aim of this amendment is to eliminate any delay between the listing of the immovable on an information dissemination service and the beginning of marketing activities. The goal is to combat “pocket listing” and “coming soon” practices and to limit sales made directly with the seller’s broker without any real marketing.
WHAT IS NEW
- The listing of the property with an information dissemination service between agencies and brokers will now have to be done as soon as the marketing activities set out in the brokerage contract begin.
- It is no longer possible, at the client’s request, to avoid the application of this rule, i.e. to delay the listing of a property while marketing it elsewhere. In other words, if the client wishes to have the property listed on an information listing service for agencies and brokers (clause 6.1 of the brokerage contract - sale), this listing must be done at the same time as the start of the marketing, except under exceptional circumstances.
- This rule does not allow a broker to unduly delay listing AND marketing the property following the signing of the brokerage contract. The licensee must list the property on an information listing service (if desired by the client) and market it diligently(S. 62 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising). The client has the right to expect no undue delay in marketing and listing the property. Exceptional circumstances may warrant delaying the marketing and listing of the property for a few days. In this context, standard clause 1.11 could be used to provide that the entire marketing (including listing) will begin at a specific time following the signing of the contract to allow for the verification of information or the preparation of the property, for example.
- If the seller wishes to postpone the listing (and therefore the marketing) and this is warranted by exceptional circumstances, the broker must not check the refusal box in clause 6.1 of the brokerage contract - sale form. He must instead complete clause 6.1 by indicating the information listing service for agencies and brokers that will be used and he must provide for standard clause 1.11.
It goes without saying that signing a brokerage contract in which the client refuses to list the property (check the box in clause 6.1 of the brokerage contract - sale), starting the marketing without listing and then modifying this contract to list the property on the information listing service (when the marketing has already started under the initially signed contract) is a non-recommended practice that clearly goes against the regulations.
It should be noted that although some mandatory brokerage contracts to sell still contain the old wording of section 44 (clause 6.2), it is important to comply with the new obligations in force since March 23, 2023.
This regulatory obligation applies to all licence holders, whether they operate in residential or commercial real estate.
6. Qualification as agency executive officer
Amendments have been made to the Regulation respecting broker’s and agency licences (c. C-73.2 r. 8) to take into account the elimination of the concept of “beginner broker” since the 2018 reform.5
The concept of beginner broker having been removed from the act in 2018, provision was made for regulations to determine the length of time that a licence holder had to have been in business in order to qualify as agency executive officer.6
As a result, it became necessary to harmonize the Act and the regulations with respect to the qualification requirements for agency executive officers by amending section 34 of the Regulation respecting broker’s and agency licences. The regulation has been amended thus:
“34. A person is qualified as an executive officer of a real estate or mortgage agency if the person
1. holds a real estate or mortgage broker’s licence that is neither suspended nor subject to restrictions or conditions unless it is a restriction referred to in section 2;
2. is able to act for his or her own account meets either of the following conditions, showing that the person has the experience necessary to manage an agency:
(a) if the person is a person referred to in section 146 of the Real Estate Brokerage Act (chapter C-73.2), the person may act for his or her own account and has carried on the activity of real estate broker for at least 3 of the last 5 years;
(b) the person has carried on the activity of real estate broker in an agency for at least 3 of the last 5 years;
3. meets either any of the following conditions, showing that the person is qualified to manage the professional activities of brokers and agencies a licence holder:
(a) has passed one of the training programs recognized in an agreement between the Organization and an educational institution and that deals with the skills a real estate or mortgage broker agency executive officer must have, provided for in the system of reference available on the Organization’s official website and has passed, in accordance with Division VII, the examination for executive officers of real estate or mortgage agencies;
(b) has qualified as an executive officer of a real estate or mortgage agency for three of the last five years; or;
(c) is authorized to represent, direct or qualify a person or partnership that engages in brokerage transactions within the meaning of described in section 1 3.1 of the Real Estate Brokerage Act (chapter C-73.2) through the intermediary of natural persons authorized to engage in such transactions in a province, state or territory for which an agreement on the mutual recognition of professional qualifications has been entered into by the Gouvernement du Québec and another government; and
4. after qualifying as an executive officer of a real estate or mortgage agency, has taken and, where applicable, passed all continuing or additional training required for some or all brokers to qualify as agency executive officers.
To maintain qualification, an executive officer of a real estate or mortgage agency must continue to meet the requirements of subparagraphs 1, 2 and 4.”
WHAT IS NEW
Generally speaking, since March 23, 2023, in order to qualify as an agency executive officer, the candidate must:
- have practiced as a real estate broker within an agency for at least three of the last five years;
- However, the broker is not required to have completed three years in an agency before taking the basic agency executive officer training recognized by the OACIQ or taking the examination. This can be done simultaneously;
- However, in order to qualify as agency executive officer, all the above-mentioned conditions must be met, including the three years of practice.
Given the applicable rules, based on the candidate’s situation as of March 23, 2023, the following conditions to qualify as agency executive officer will apply:
|
SITUATION OF THE CANDIDATE |
PROCESS TO QUALIFY AS AGENCY EXECUTIVE OFFICER |
|---|---|
|
Real estate broker WITH at least three years of practice in the last five years in an agency AND as of March 23, 2023: |
|
|
Is not registered for the AEO training recognized by the OACIQ |
Register for and complete the AEO training; and |
|
Is already registered for the AEO training recognized by the OACIQ but has not yet started it |
Complete the AEO training; and |
|
Has started the AEO training recognized by the OACIQ |
Successfully complete the AEO training; and |
|
Has successfully completed the AEO training recognized by the OACIQ but has failed the OACIQ AEO examination and is in the process of retaking it |
Pass the OACIQ AEO examination; and |
|
Has successfully completed the AEO training recognized by the OACIQ but has failed the OACIQ AEO examination and is in the process of retaking it |
Successfully retake the OACIQ AEO examination; and |
|
Has successfully completed the AEO training recognized by the OACIQ and passed the OACIQ AEO examination |
Apply to add the AEO qualification to his licence and pay the fees. |
|
SITUATION OF THE CANDIDATE |
PROCESS TO QUALIFY AS AGENCY EXECUTIVE OFFICER |
|---|---|
|
Real estate broker WITHOUT at least three years of practice AND as of March 23, 2023: |
|
|
Is not registered for the AEO training recognized by the OACIQ |
Register for and complete the AEO training; and |
|
Is already registered for the AEO training recognized by the OACIQ but has not yet started it |
Complete the AEO training; and |
|
Has started the AEO training recognized by the OACIQ |
Successfully complete the AEO training; and |
|
Has successfully completed the AEO training recognized by the OACIQ and is or is not registered for the OACIQ AEO examination |
Pass the OACIQ AEO examination; and |
|
Has successfully completed the AEO training recognized by the OACIQ but has failed the OACIQ AEO examination and is in the process of retaking it |
Successfully retake the OACIQ AEO examination; and |
|
Has successfully completed the AEO training recognized by the OACIQ and passed the OACIQ AEO examination |
Apply to add the AEO qualification to his licence and pay the fees. |
*REMINDER: The broker is not required to have completed three years in an agency before taking the basic agency executive officer training recognized by the OACIQ or taking the examination. This can be done simultaneously. However, in order to qualify as agency executive officer, all the above-mentioned conditions must be met.
7. Waiving of part of the remuneration
Section 39 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising has been amended to specify that the licence holder may not waive all of his remuneration:
“39. A licence holder may, as a means of promoting services, offer reductions in remuneration, or benefits or gifts.
A licence holder may waive all or any part of the remuneration to which the holder is entitled so long as doing so does not disadvantage the other parties to the transaction or another licence holder.
A licence holder may not, however, waive all or any part of the remuneration to which the holder is entitled if one or more transaction proposals are presented by other licence holders at the same time as a transaction proposal presented by the holder or received directly by the seller person selling or leasing an immovable.”
WHAT IS NEW
In 20217 the legislator specified in section 1 of the Real Estate Brokerage Act that a contract by which the licence holder “receives no remuneration” is not a real estate brokerage contract. It was therefore necessary to amend section 39 of the Regulation to reflect this.
For example, entering into a brokerage contract to purchase that does not provide for any direct remuneration from the client is formally a non-recommended practice. Indeed by not receiving any remuneration for the services rendered, the broker’s contract would not be considered a brokerage contract within the meaning of the Act. (See also to this effect question 13 of the FAQ Amendments to the Real Estate Brokerage Act.)
8. Strengthening of rules governing representation and advertising
WHAT IS NEW
To increase public protection, clarify some of the applicable rules and avoid confusion in the area of advertising, including with respect to agency names, a clarification has been made to section 113 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising:
“113. No licence holder or person promoting real estate or mortgage brokerage services may make, engage in or allow any representation or advertising that
(1) suggests the licence holder or person is authorized to engage in a brokerage transaction described in section 1 3.1 of the Real Estate Brokerage Act (chapter C-73.2) when in fact he or she is not legally qualified to do so at the time of the representation or advertising;
(2) falsely suggests that he or she holds a specialist’s title;
(3) contains information or uses a formulation, name, trademark, slogan or logo likely to be confusing with another name, trademark, slogan or logo likely to be confusing, in particular the activities engaged in, the type of goods and services offered or the geographical situation, or to falsely suggest that he or she practises a profession reserved to the members of a professional order;
(4) contains a statistic for which no source is given; or
(5) contains a photograph of the licence holder taken more than 5 years earlier.”
9. Strengthening of measures related to OACIQ examinations
Amendments have been made to clarify the penalties for the very rare cases of fraud and plagiarism on the OACIQ examinations, in order to harmonize them with those existing in university regulations.
WHAT IS NEW
Henceforth, a person may be admitted to the examination only after the expiration of a 12-month period following the date of cancellation of his previous examination for reasons such as fraud, plagiarism, registration under misrepresentation, participation in fraud or plagiarism or attempted fraud or plagiarism.
If a person’s examination was cancelled for failure to comply with the instructions given at the examination session, that person will not be allowed to retake the examination until three months have elapsed from the date the examination was cancelled (s. 39 of the Regulation respecting broker’s and agency licences).
10. Repeal of the Regulation respecting contracts and forms (c. C-73.2, r. 2.1)
Since 2018, the publishing of mandatory brokerage forms has been conditional to approval by the Minister of Finance. As a result, the authority to regulate the format, terms or conditions of use, mandatory or prohibited statements in brokerage forms was repealed.8
However, the OACIQ does regulate the manner in which the forms must be completed, so sections 1 to 12 of the Regulation respecting contracts and forms on how to use the forms were integrated into the Regulation respecting brokerage requirements, professional conduct of brokers and advertising (ss. 46.1 to 46.12), and the rest of the Regulation respecting contracts and forms was repealed.
11. Definitions of “exchange of an immovable” and “enterprise”
References to the exchange of an immovable and the sale of an enterprise have been eliminated from the regulations. Since 2018, the exchange of an immovable is considered to be a sale. An enterprise, if the enterprise’s property, according to its market value, consists mainly of immovable property, is considered to be an immovable under section 1.1 of the Real Estate Brokerage Act.
1 An Act mainly to improve the regulation of the financial sector, the protection of deposits of money and the operation of financial institutions, SQ 2018, c. 23.
2 This name officially came into effect on March 23, 2023, and will replaces the name of the following regulation: Regulation respecting the issue of broker’s and agency licences.
3 This name officially came into effect on March 23, 2023, and will replaces the name of the following regulation: Regulation respecting the Real Estate Indemnity Fund and determination of the professional liability insurance premium.
4 Section 9 of the brokerage contract to sell (section 8 of the brokerage contract to purchase) “Obligations of the agency or the broker.”
5 Section 7 of the Real Estate Brokerage Act, which dealt with the concept of “broker new to the profession” was repealed in 2018 as part of Bill 141: “7. A broker, when new to the occupation, must carry on brokerage activities for an agency for the period set out in the Organization’s regulations before the broker may work for the broker’s own account or become an executive officer of an agency.”
6 S. 20.1 of the Real Estate Brokerage Act.
7 An Act to amend various legislative provisions mainly with respect to the financial sector, SQ 2021, c 34.
8 Bill 141 repealed sub-section 46 (13) of the Real Estate Brokerage Act: « 46. In addition to its regulatory powers under this Act, the Organization may determine, by regulation: […] (13) the form of contracts or forms, other than a contract referred to in section 26, how and when they may be used, the particulars and stipulations which must or must not appear in certain contracts or forms and those that supplement intention; […]”
