Signing a brokerage contract to sell, purchase or lease an immovable
When the owner (natural person) of a residential immovable containing less than five dwellings chooses to sell through a real estate agency or a real estate broker acting on his own account, he must sign a brokerage contract. The same applies to the buyer if the broker wishes to ask him for compensation and to the lessor concerning lease matters. This agreement gives the agency or broker the right to act as the exclusive or non-exclusive intermediary for a specific period.
In residential matters, the form that must be used for a brokerage contract to sell, purchase or lease covering an immovable containing less than five dwellings is the one developed by the OACIQ. Neither the agency nor the selling, buying or leasing client may delete anything from it. This service contract can be amended only if it does not reduce the agency’s or broker’s obligations provided for in the contract or it does not increase those of the seller, buyer or lessor.
The brokerage contract may particularly set out the specific conditions and expectations of the selling, buying or leasing client. It also specifies the amount of the agency’s or broker's remuneration and the conditions of payment of the remuneration by the client. This remuneration is generally established on the basis of a percentage of the property's selling price and must be paid to the agency. In this regard, note that Annex RC – Remuneration and Costs allows indicating remuneration methods other than those provided in the brokerage contract. For more information, read the article How can I compensate my residential real estate broker?
Remittance of a duplicate
The real estate agency or broker must give a duplicate of the contract (i.e. a copy containing the original signatures of the parties or signatures that were authenticated according to an electronic signature protocol) to the client and the latter is bound to perform his obligations only as of the time of receipt of this duplicate.
Unfortunately, it may happen that the agency or broker settles for providing a photocopy or completely forgets to remit the duplicate of the contract to the client. These omissions, though insignificant in appearance, may have impacts, for example the client could refuse to pay the remuneration due to his broker’s agency or to his broker acting on his own account, arguing that he never received a duplicate of his contract. Failure to provide the client with a duplicate of his brokerage contract also has an impact on the right to terminate the contract.
Take time to read your brokerage contract with your real estate agency or broker before signing it and don't hesitate to ask questions if you haven't understood certain clauses. Indeed, the broker or agency executive officer must provide all explanations required for understanding and assessing the services that he or the agency for which he is acting agrees to render.
You can also require that certain special conditions be spelled out in your brokerage contract, as the contract is invalid until it is signed by the parties. Furthermore, you are not bound by the obligations it contains until you have in your possession a duplicate of the contract signed by the agency or broker.
Once the brokerage contract to sell, purchase or lease is concluded, you may get out of it within three (3) days of receiving the duplicate of the contract signed by both parties. After this period, if the contract is marked “non-terminable” (“irrevocable”), you may terminate it only if the agency or broker agrees. To learn more about the cancellation of the contract or the right of withdrawal, check the article Termination of a brokerage contract.
For more information, please contact the information centre Info OACIQ.