Published on: March 25, 2013
Article number: 122386

The buyer’s broker's right to take part in the presentation of a promise to purchase

The OACIQ noticed that some brokers refuse to grant their colleagues the right to take part in the presentation of promises to purchase, arguing that the seller has given them written instructions to this effect. They base themselves mainly on section 100 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising, which states that:

"100. A broker or agency executive officer must not prevent another licence holder who has obtained a written transaction proposal from participating in the presentation of the proposal, unless written instructions to that effect have been received from the party represented."

However, the EXCEPTION should not become the RULE!

The rule

The presentation of a promise to purchase or a counter-proposal is a key step in any real estate transaction. Consequently, in the context where the obligation to collaborate exists between licence holders, the buyer’s broker has the right to participate in the presentation of the promise to purchase obtained from the buyer and cannot be prevented from doing so by the seller’s broker.

The exception

The only case where the seller’s broker can prevent the buyer’s broker from participating in the presentation of a promise to purchase is where the seller’s broker has received written instructions to this effect from his selling client. However, the seller’s broker cannot systematically ask his selling clients to provide such instructions without justification. The request to exclude the participation of the buyer’s broker from the presentation of a promise to purchase must emanate from the seller himself and not from the seller’s broker. There may be situations where it is appropriate for a seller not to allow the buyer’s broker to take part in the presentation of a promise to purchase or counter-proposal. In such a case, the seller’s broker should make an exception and inform his selling client of that possibility.

The implication

Whether it is done at the request of the selling client or following his broker’s advice, the broker should mention to his selling client that preventing the buyer’s broker from participating in the presentation of a promise to purchase or counter-proposal could be put into question. Although permitted as an exception, it constitutes a breach of the buyer’s right to use the services of his own broker to present his promise to purchase.

The seller’s broker must be conscious of the fact that he is placing himself in a control situation over other licence holders. In so doing, he must make sure that the information provided by the buyer’s broker regarding the promise to purchase is completely and faithfully delivered to the seller. This task is more difficult than it seems and the seller’s broker’s responsibility increases accordingly. Finally, the seller’s broker must inform the buyer’s brokers as soon as possible, i.e. as soon as they enter the "collaboration mode", that they cannot take part in the presentation of promises to purchase or counter-proposals. A sound professional practice would be to mention it on the detailed description sheet so that other licence holders are not taken by surprise.