Are you involved in a claim submitted to the Real Estate Indemnity Fund (FICI)?

Please read the following to see what will happen, why your cooperation is required, and possible consequences of the indemnity committee's decision for you.

The role of the FICI

When a person feels that she or he has been wronged by the allegedly dishonest or fraudulent acts of an OACIQ licence holder in a transaction, she or he may file a claim with the Real Estate Indemnity Fund (FICI) to obtain compensation.

The Real Estate Indemnity Fund was created specifically to compensate victims of fraud, fraudulent tactics (dishonest) or misappropriation of funds for which a broker or agency is responsible. This mission has been entrusted to the Fund by the Real Estate Brokerage Act (sect. 108).

The indemnities granted are paid from the Fund, which is funded by contributions of all agencies and brokers in Quebec. Although the OACIQ manages the FICI, the Fund’s assets are completely separate from those of the Organization and are used exclusively to pursue the Fund’s mission. The OACIQ is responsible for compensating victims from the sums contained in the Fund, in accordance with the decision of the indemnity committee.

The indemnity committee decides on claim admissibility and rules on the amount of compensation to be paid. This committee is made up of three to nine members, appointed by the OACIQ Board of Directors. It is comprised of licence holders and public representatives.

The committee decides on file and does not summon the persons involved, including the broker concerned by the claim.

Claim

Any claim sent to the indemnity committee must be in writing. It must state the facts upon which its decision is based and indicate the amount claimed, with supporting evidence. It must also identify the licence holder concerned. The other criteria are described here.

The claim is usually initiated by a request for assistance.

The claim cases accepted by the indemnity committee relate to the following allegations:

• Fraud and fraudulent tactics:  When a broker has voluntarily misled a client in a brokerage transaction, whether by misrepresentation or by voluntary omission.
• Misappropriation of funds:  When a client is unable to recover the sum due to him or her from a broker.

Collection of information

Once the claim is filed, the Syndic's Office is responsible for collecting the relevant facts. The Syndic will particularly request your version of the facts stated in the claim.

You (the licence holder concerned) will have the opportunity, during the investigation, to provide all information and documents relating to the claim and adduce any relevant evidence. Your version of the facts may be communicated to the claimant.

Collaborating to the investigation is not only a professional duty, it's a must. Refusal to collaborate will result in serious consequences.

Section 11 of the Regulation respecting the Real Estate Indemnity Fund and
determination of the professional liability insurance premium provides that the licence holder concerned must provide all information and documents pertaining to the claim and must adduce all relevant evidence.

In general, a broker and agency executive officer must collaborate during an inspection, inquiry conducted by the syndic or assistant syndic, process by the Assistance Department or the Indemnity Committee to obtain information , or
proceeding related to mediation, arbitrage or conciliation conducted by
the Organization. 

You (the broker concerned) must collaborate, particularly by disclosing all the facts you are aware of, producing all relevant documents and replying as soon as possible to every request in the manner determined by the person making the request (pursuant to section 105 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising).

If you fail to provide your version of facts stated in the claim, you could be subject to a disciplinary complaint relating to non-compliance with the provisions of section 105 of the regulation.

Another consequence of failure to collaborate: the investigation file on the claim can be transmitted to the committee as such, without your version of facts or without the information and documents you might have considered relevant. The committee may then definitely decide on the compensation claim. Since the committee renders its decision on file, you will not have the opportunity to make representations during the session devoted to the review of your case.

Decision 

• The indemnity committee decides on the eligibility of claims submitted to it and rules on the amount of compensation to be paid, when deemed appropriate.
• The maximum compensation that can be paid by the indemnity committee is $35,000 per claim for an act committed before May 10, 2018. The maximum compensation per claim is increased to $100,000 for an act committed on May 10, 2018, or after.
• The indemnity committee's decision (on a claim and, if applicable, on the amount of indemnity to be paid) is final.
• The decision must be made by a majority of members and substantiated. It must be recorded in writing, and signed by the concurring committee members.
• There is no right to appeal the decision. The committee may, however, review its decision if new facts warrant that (as set out in section 8 of the Regulation respecting the Real Estate Indemnity Fund and determination of the professional liability insurance premium).

Following an initial decision to reject the claim, the committee may decide to compensate if new facts submitted in the review application warrant a different decision.

Consequences

If the Fund's indemnity committee decides that compensation should be paid to claimant, the written and substantiated decision will be sent to you.

Once the indemnity is paid, you (the broker concerned) will receive a formal demand to pay a bill corresponding roughly to the compensation amount. Failure to pay the bill will result in the following consequences:

1. The OACIQ can take legal action against you before courts in order to recover the amount paid (subrogatory recourse);
2. After a favourable judgement, if you fail to pay the amount due, the OACIQ may revoke your licence;
3. Thereafter, to recover your licence, you should, among other conditions, refund the compensation amount paid plus interests and fees.

Section 112 of the Real Estate Brokerage Act provides that the Organization may subrogate (replace) a victim in all her or his rights, in order to recover the amount it had to pay to her or him for the acts committed by the broker concerned. The Organization may in particular institute legal proceedings or intervene in legal proceedings already initiated by the victim and involving the broker for the same events. Any sum recovered is then paid to the Fund.

If the OACIQ succeeds in the subrogatory recourse, section 19 of the Regulation respecting the issue of broker’s and agency licences provides that a broker's licence will be revoked if she or he fails to repay the amount it was imposed on him or her.

Moreover, regardless of whether or not the subrogatory recourse is exercised, section 1 (6) of the Regulation respecting the issue of broker’s and agency licences provides that reimbursing the Organization for the indemnity amount paid pursuant to a decision of the indemnity committee is one of the requirements for the issue of a real estate broker's licence.

Any questions? Please contact the Registry Office.

The Registry Office provides the secretariat and coordinates the activities of the Organization's committees, including the indemnity committee. It prepares and retains the files transmitted to it and follows-up on them. It also ensures a smooth running of the committees' work.