Signing a brokerage contract to sell, purchase or lease

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 who wants a real estate broker to represent his interests in the purchase of a property. This agreement gives the agency or broker the right to act as the exclusive or non-exclusive intermediary for a specific period.

Mandatory form

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.

The brokerage contract form 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, Annex RC – Remuneration and Costs allows indicating remuneration methods other than those provided in the brokerage contract.

Remittance of a duplicate

Under section 25 of the Real Estate Brokerage Act, 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.

This contract is not valid unless it is signed by both parties. Accordingly, the client is not bound by any of its obligations until he or she receives a signed duplicate from the agency or broker.

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 cancel the contract. Once the contract has been signed, the client has three (3) days after receiving the duplicate signed by both parties to withdraw from the brokerage contract (to sell, purchase or lease).

Obligations of real estate brokers

Brokers must ensure that their clients take the time to carefully read the brokerage contract before signing it. They must also encourage them to ask any questions they may have regarding clauses they do not understand. Real estate brokers are responsible for providing all necessary explanations so that clients can fully understand and evaluate the services that the broker, or the agency for which he or she acts, undertakes to provide.