On June 14, 2013, the Quebec National Assembly adopted Bill 31, An Act to amend various legislative provisions mainly concerning the financial sector, introducing certain amendments to the Quebec Real Estate Brokerage Act (the Act). The amendments to the Act, for the most part, came into force on June 14, 2013. The Government of Quebec also published draft amendments to four regulations adopted under the Act: Regulation to amend the Regulation respecting the issue of broker’s and agency licences; Regulation to amend the Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies; Regulation to amend the Regulation respecting brokerage requirements, professional conduct of brokers and advertising; andRegulation to amend the Regulation respecting disciplinary proceedings of the Organisme d’autoréglementation du courtage immobilier du Québec (collectively, the Draft Regulations). The 45-day comment period ended on July 13, 2013.
The amendments to the Act specify the circumstances in which a real estate or mortgage agency (“agency”) or broker is prohibited from claiming remuneration from a brokerage transaction and grant new powers to the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), Quebec’s real estate licensing regulator. The amendments to the Draft Regulations introduce clarifications with respect to residential brokerage licences, eliminate certain notice requirements in respect of hypothec (mortgage) brokerage contracts and introduce record-keeping obligations for agencies and brokers. The amendments to the Act and the Draft Regulations are discussed in more detail below.
The amendments to the Act set out the circumstances in which an agency or broker is prohibited from claiming or receiving remuneration in respect of a brokerage transaction. This must be considered in particular when dealing with unlicensed persons and individuals.
Currently, the Regulation respecting brokerage requirements, professional conduct of brokers and advertising provides that:
A licence holder cannot claim remuneration if the holder acquires an interest in an immovable or enterprise or does so for the holder, a partnership or legal person controlled by the holder, or if the married or civil union spouse of the holder, the person with whom the holder is in a de facto union or a legal person or a partnership controlled by that spouse or person acquires the immovable or enterprise.
The Draft Regulations extend this prohibition to transactions in which these parties become a lessee or obtain a loan secured by an immovable hypothec.
The Regulation respecting the issue of broker’s and agencylicences authorizes a broker holding a licence restricted to residential brokerage to act as an intermediary for the leasing of part or all of a residential immovable comprising fewer than five dwellings. The Draft Regulations eliminate this restriction and provide that such a broker may act as an intermediary for the leasing of a dwelling in an immovable for residential purposes regardless of the number of dwellings in that immovable.
Hypothec Brokerage Contracts
The Regulation respecting brokerage requirements, professional conduct of brokers and advertising requires that when a broker:
- Ceases to act for his or her own account, the broker must provide a notice to the parties stating the right of the parties either to continue to deal with the broker if the broker is subsequently acting for an agency or to terminate the brokerage contract
- Ceases to act for a real estate agency, the broker and the agency must provide a notice to the parties stating the right of the parties either to continue to deal with the agency, continue to deal with the broker acting for a new agency, or to terminate the brokerage contract
Under the Draft Regulations, these notice requirements do not apply to hypothec brokerage contracts.
The Draft Regulations introduce a requirement for agencies and brokers to record the information concerning the identity of a represented party and, where such identification is not made face-to-face, to keep the documents used to verify the identity of the represented party.
The Draft Regulations introduce certain changes to the qualifications for persons acting as executive officers of agencies. In particular, the amendments provide that a person could now qualify as an executive officer of an agency even if the person holds a licence that is restricted to either residential or commercial brokerage. The Draft Regulations also provide that, in addition to the requirements currently specified in the regulations, an applicant for the position of executive officer will be required to have passed, as of September 1, 2013, one of the training programs recognized in an agreement between the OACIQ and an educational institution that deals with the skills that an agency executive officer must have.
New Powers for the OACIQ
The amendments to the Act also grant new powers to the OACIQ. In particular, the OACIQ now has the authority to act as an arbitrator in disputes between a broker or an agency and a client, or between brokers, between agencies or between brokers and agencies if reconciliation or mediation has failed between the parties and if the parties apply to the OACIQ. The OACIQ may establish and delegate its powers respecting arbitration to an arbitration committee.
The amendments to the Act also contemplate several internal organizational changes to the OACIQ and empower the OACIQ to request information or documents from an applicant or a licence holder in order to determine eligibility for or to impose conditions on the issuance of a licence.