Changes in real estate brokerage law are still misunderstood in Quebec

Hiring a real estate broker is one of the first steps for many people in the process of buying or selling a property. But changes in the law, in effect since June 10, 2022, have changed the ways of doing things in this area.

We continue, even today, to answer questions of our brokers that are still not clear to them.Marc Lacasse, realtor and president of the Professional Association of Quebec Realtors (APCIQ), testifies. It was quite a challenge. It is not easy, changes in the law, to implement and make people understandthe person who represents more than 15,000 brokers in Quebec believes.

Same story with the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), which enforces this law. He indicated that compared to 2021, when 42,900 calls were received, Calls for legislative changes mount […] from intermediaries and consumers. The Ministry of Finance is soon to reveal figures for 2022.

No more double acting in 2022

There is no doubt that prospective buyers are the most affected by the changes in the real estate brokerage law.

In the course of individual advocacy, many have had the impression that they are victims of a lack of transparency and that they are underrepresented in light of one of the most important transactions in their lives.

The Canada Mortgage and Housing Corporation (CMHC) said average home prices will not decline in 2023 to return to pre-pandemic levels, but should stabilize after the recent slide. (file photo)

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Photo: Radio-Canada/Olivia Labrier-Roy

Thus, since June, the principle of double representation has been prohibited, with a few exceptions.

The permit holder cannot obtain a brokerage-sale contract and a brokerage-buy contract as part of the same transaction, on the same propertySandra Barrett, director of the Center for Information Intelligence OACIQ and certification serviceOACIQ.

If a broker finds himself in a situation of double representation, he must necessarily terminate his contract with the buyer, Ms. Barrett adds.

The purpose of this change is to ensure full respect for the interests of the buyer.

Exceptions

Two exceptions may allow a broker to do double acting, particularly in remote areas, where broker services are scarce.

If another permit holder is not available to represent the buyer and his office is located within a radius of 50 kilometers from the property that the buyer customer intends to make a promise to purchase, the broker can provide dual representation.

Agencies are also exempt. For example, if two brokers from the same agency bound by separate brokerage contracts are working on the same transaction, they are not considered to be in double representation.

Since June 2022, it is prohibited for a real estate broker to put themselves in a situation of conflict of interest by representing both a buyer and a seller in relation to the same property. This was called double acting.

Photo: Credit: OACIQ

The purchase contract is now mandatory

To ensure they are fully represented, purchasers must be bound by a purchase contract forOACIQ with their broker. This is the second change to the law: no more oral agreements.

To represent a client, you must have signed a mediation contract with them. Representing him means defending his interests and protecting his confidential and strategic information. when [un courtier] He has a mediation contract for buying and selling, the situation becomes unsustainable for the mediator because he cannot respect the interests of both sides at the same timeHence the legislative changes, says Sandra Barrett.

To ensure they are fully represented, buyers must be bound by a purchase contract with their broker.

Image: iStock

For this reason, when signing, the broker must inform the buyers that he may be able to terminate the contract if faced with a case of double representation.

If he has to terminate the contract, the broker must inform the buyer that his role has become limited and that he will not be able to fully represent him, warns Ms. Barrett. He must also recommend that he be represented by another mediator.

Finally, if the customer-buyer decides not to sign the purchase contract, the broker must still grant it fair treatment.

Adaptation

On the ground, these changes led to cases more complicatedsays Anne-Marie Lussier, realtor and managing director at Royal LePage Blanc & Noir, a real estate agency in Quebec. I found that these changes are not understood by everyone and are often seen as adding to the workload.

Anne-Marie Lussier, realtor at Royal LePage Blanc & Noir, in Quebec

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Photo: Radio Canada

At the same time that we have to make our brokers aware of changes in the law, we also have to introduce new approaches to them, and how to explain how this will happen.Marc Lacasse, ofAPCIQ.

These changes often lead to more interaction between brokers and customers. The public is more protected. On the other hand, we should not underestimate the time it can take to communicate and integrate information to all brokers in Quebec and subsequently, to all Quebecers who wish to make a transaction..

I’OACIQ Implemented several online tools to assist brokers and clients. I’APCIQ also contributes to these outreach efforts. We trust a lot. We will communicate key issues between the two institutions to supervise both brokers and clients.Marc Lacasse concludes.