How to prevent conflicts of interest?

No, it is not a conflict of interest. The real estate broker's interests are aligned with those of the represented party. By signing a brokerage contract to sell (BCS), the broker undertakes to advise his sister and defend her interests based on her needs, as he would do with any other client with whom he has signed a BCS.

See the section A licensee who represents one of his relatives of the Guideline on conflicts of interest.

No, this is not a conflict of interest. The real estate broker is representing the same party in both transactions, which involve different properties. He is therefore acting loyally and in the best interests of his client.

Visit the page “Questions to ask oneself to prevent conflicts of interest".

Yes, the real estate broker must complete a notice of disclosure. In this specific case, the real estate broker's interest is considered “indirectˮ since the right of ownership of the immovable is held by a person who is related to the real estate broker within the meaning of tax laws, namely his son. The real estate broker must immediately inform the seller in writing of his status as a real estate broker and the nature of his interest in the transaction. The aim of this notice is to ensure transparency and maintain confidence in the transaction process by informing the seller of this relationship.

The notice must be sent by any means providing proof of the date and time of receipt, even before a promise to purchase is drafted. The real estate broker may use the form Disclosure notice of the real estate agency or broker – Purchase – Sale – Loan.

When a real estate broker, who holds a licence issued by the OACIQ and a mortgage brokerage certificate issued by the Autorité des marchés financiers, enters into a brokerage contract to sell with a seller and wants, at the same time, to represent the buyer to obtain a mortgage loan, he may find himself in a conflict of interest.

The real estate broker's advice to his selling client may be biased in favour of his borrowing client. When receiving a promise to purchase from the borrowing client, the real estate broker could present it in an advantageous manner to his selling client to benefit from the remuneration related to the granting of the mortgage loan to the buyer, in addition to that of the sale.

This situation is different from the one where a real estate broker represents a buyer in a real estate transaction. In this case, if he also holds a mortgage brokerage certificate, he could represent the buyer to obtain a mortgage loan.

For more details, see this page.

In this case, the real estate broker is not acting as an intermediary. He is himself a party to the transaction. The real estate broker must:

• Immediately disclose his status as a real estate broker in writing to the seller or buyer, specifying his real estate brokerage expertise, using the recommended Notice of disclosure form. Read this article to learn more about the use of this form.
• Advise the unrepresented seller or buyer to enlist the services of a real estate broker to ensure balanced negotiations
• Inform the other party that he is not covered by FARCIQ’s insurance policy, as he is acting exclusively for his own personal benefit and is not rendering any professional services for the benefit of a third party.
• Avoid placing himself in a conflict of interest at all times.

Real estate brokers may not receive or claim any remuneration when they buy for themselves. In this regard, the OACIQ advises real estate brokers, whether buyers or sellers, to use the services of another real estate broker.

For more details, see this page.

If the buyer so requests, the seller's real estate broker can refer other real estate brokers to represent him, but he must ensure that this list contains more than one name.

The seller's real estate broker cannot receive compensation for this referral because he remains involved in the transaction, which would create a conflict of interest. This rule also applies to real estate brokers in a double representation situation who must terminate their brokerage contract to purchase. Under section 29.1 of the Real Estate Brokerage Act, they are not entitled to any compensation following the termination of the contract for referring the buyer to another real estate broker.

In a nutshell, real estate brokers must always avoid conflicts of interest and may not receive compensation for referrals when they are involved in the transaction.

For more information, see questions 3.1 and 17 of the FAQ on double representation. 

Buying a property is a major transaction, and it is essential for the buyer to fully understand the real estate broker's role so that he can choose the right person to deal with. Here is what the buyer needs to know before making his choice:

• By signing a brokerage contract to purchase, the buyer will be represented by his own real estate broker, which means he will benefit from personalized advice to defend his interests. His real estate broker will negotiate the conditions of the promise to purchase based on the buyer's criteria.
• If the buyer does not sign a brokerage contract to purchase, he may be treated fairly by the seller's broker or by a collaborating broker without a contract to purchase. In this case, the buyer will receive no advice and will not be represented. The real estate broker will be able to show the property to the buyer, complete the promise to purchase, and must provide him with objective information relevant to the transaction.

For more details, read this article.

A real estate broker can represent a close relative without being in a conflict of interest, provided that his actions are aligned with the interests of that close relative.

In addition, the real estate broker must treat all the parties involved in the transaction fairly and inform them objectively. Thus, in the context of a transaction for which the real estate broker is bound by a brokerage contract to a relative, he must inform the other party to the transaction of the relationship between him and his client. For the sake of transparency, a good practice is to do so in writing (for example, by email), and to keep proof of this communication.

However, if the broker has a financial interest in the immovable (for example, if his close relative is a business partner and is buying the immovable through the corporation of which he and the real estate broker are shareholders), he must disclose this interest immediately and in writing before drafting or accepting a promise to purchase, and obtain an acknowledgement of receipt from the other party. 

To do so, he can use the OACIQ form Disclosure notice of the real estate agency or broker (Purchase – Sale – Loan) or any other “in-house” form that complies with the regulations in force.

For more details, read this article.

When a real estate broker represents two buyers who are interested in the same property, he is in a conflict of interest, whether in a residential or commercial transaction.

To avoid a conflict of interest, the real estate broker may not represent both buyers, as he would not be able to exercise his duty of loyalty or guarantee the confidentiality of each party's strategies.

He must therefore inform the second buyer that he is already representing someone else for this property and that he cannot continue to represent him. The broker must recommend that this second buyer be represented by another real estate broker, who will be able to advise him and defend his interests based on his criteria.

For more details, read this article.

It is important for real estate brokers to disclose their financial interest in a transaction, as this allows the other party to understand that they are dealing with a professional with real estate brokerage expertise.

When a real estate broker is acting on his own account and the other party is not represented by a real estate broker, he can no longer treat this party fairly because he no longer has the objectivity required in this particular situation. Transparency is essential for maintaining trust in the profession and upholding its integrity.  

In addition, if the Notice of disclosure form is not provided and signed within the required period or if key information is missing, the other party involved in the transaction may withdraw without penalty provided this has not been done¹.

For more details, read this article.

¹ Section 18 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising

Yes, a real estate broker can sell his property by himself. However, the OACIQ strongly recommends that the broker be represented by a real estate broker to avoid any situation where he might end up in a conflict of interest. If an unrepresented buyer wishes to make a promise to purchase on the real estate broker's property, the broker will not be able to treat the buyer fairly, as he lacks the necessary objectivity in this situation.

Furthermore, in such a case, the real estate broker must immediately disclose in writing his licensee status and the nature of his interest in the property to any potential buyer. The OACIQ Notice of disclosure form has been designed for this purpose.

For more details, read this article.

When a buyer is represented by a real estate broker and the broker finds himself in a dual representation situation because he also represents the seller in the same transaction, the broker must terminate the brokerage contract to purchase.

If the buyer asks the seller's broker to refer him or her to another real estate broker, the seller's broker may do so. However, if seller's broker does so, he or she must recommend more than one real estate broker.

Furthermore, the seller's broker cannot receive any compensation for this referral, as he is himself involved in the transaction and would therefore be in a real or apparent conflict of interest. He must avoid such circumstances at all times.

For more details, read this article.

As a real estate broker, it is crucial to recognize and avoid real or apparent conflicts of interest to maintain public trust and meet your ethical obligations.

To prevent these situations, the real estate broker could ask the following questions: 

• Am I personally involved in the transaction as a buyer, seller, lessee, lessor, lender, or do I have a financial interest in the transaction?
• Are my interests conflicting with those of my client due to a personal or family relationship with another party involved in the transaction?
• Can I take advantage of the situation to the detriment of my client's interests?

For more details, read this article.

In real estate brokerage, a conflict of interest arises when the professional or personal interests of the real estate broker are in competition with those of his client. As a real estate broker, he must protect and promote the interests of the client above all else.

The real estate broker is in a conflict of interest if he is likely to favour his own interests (for example, by gaining a personal advantage in the transaction) or those of another person, to the detriment of his clientʼs interests.

The client must be sure that the real estate brokerʼs interests are not opposed to his own, and that he need not fear that the brokerʼs judgment or actions will be influenced by outside interests.

For more details, read this article. 

A real estate broker who holds an OACIQ licence and a mortgage brokerage certificate from the AMF can represent a buyer in both the purchase of a property and the process of obtaining of a mortgage. This is permitted because the broker serves the interests of a single client. However, the broker must always ensure that their parallel activities do not compromise their integrity, independence, or competence. 

Therefore, the broker cannot represent both the seller and the borrower (buyer) seeking a mortgage in the same transaction, as their interests are conflicting. 

Adhering to these principles is vital for maintaining public trust and ensuring the quality of the services provided.

For more details, read this article.

Yes, real estate brokers have an ethical obligation to avoid any conflict of interest, whether in the context of leasing, selling, or purchasing residential or commercial properties. 

In practical terms, the real estate broker must:

• Actively take steps to prevent finding himself in a conflict of interest.
• Ensure that his own interests and those of his relatives (colleague, friend, family member, business partner, creditor, company of which he or a relative is a shareholder or director, etc.) are separated from those of his client to ensure that there is no conflict between them.
• Go as far as to cease representing a client to fulfil his obligations.

For more details, read this article and see the questions to ask oneself to prevent conflicts of interest.

A real estate broker who also acts as a developer or builder for a property may not act as an intermediary in the sale, purchase, or lease of such property. Such a situation could create a conflict of interest because the broker may be inclined to favour his own interests or those of his company over those of the party involved. For instance, he may be tempted to recommend a lower selling price or a higher purchase price to gain a personal advantage. To avoid conflicts of interest, a real estate broker cannot wear two hats by acting as both broker and developer or builder for the property concerned.

For more details, read this article 

When a real estate broker has a personal or financial interest in a real estate transaction, he must complete the Notice of disclosure form to inform the other party of:

• His professional status as a real estate broker, even if he is not practising or his licence is suspended

• The nature of his interest in the transaction

What does the nature of his personal or financial interest in the transaction mean?

• Sale: specify whether he, his spouse, his dependent child or a company in which he holds shares, own all or part of the property.
• Purchase: specify whether the real estate broker intends to buy the property for himself, his spouse, his dependent child, or through a company in which he holds shares, and whether he intends to resell, transfer or donate the property after purchase.
• Mortgage loan: specify whether the real estate broker, or a company in which he holds shares, is lending the funds for the purchase of the property.

For more details, read this explanatory leaflet .

When a real estate broker acts on his own behalf in a transaction, specific rules apply to avoid conflicts of interest. Here are the key points to remember.

The general rule is that a real estate broker acting on his own behalf cannot sign a contract with himself because he is not acting as an intermediary and therefore cannot receive remuneration.

To avoid any situation where the real estate broker could find himself in a conflict of interest, the OACIQ strongly recommends that he seek representation by another real estate broker in this context.

Sale

Exceptionally, if the real estate broker is not the sole owner of the property for sale, he may receive remuneration.

Purchase of leasing

The real estate broker may not receive remuneration if he, his spouse, or a company he controls becomes a lessee or acquires an interest in a building.

For more details, read this article.