I got a promotion but I swear I'm not bragging because it has everything to do with changes to real estate law in Quebec and nothing to do with anything I did to deserve the promotion. But I got it just the same, as did all real estate agents in Quebec.
What happened? On May 1, 2010, the new Real Estate Brokerage Act came into effect in Quebec. As part of this, I got a promotion from real estate AGENT to real estate BROKER, as did all real estate agents in Quebec. Other changes will be implemented over the next 18 months.
Here are some of them:
- It used to be that real estate agents worked for real estate brokers. Now, real estate brokers work for real estate agencies. Agents turned into brokers overnight, and brokers turned into agencies.
- We now must disclose to our clients, in writing, the commission we intend to share with a buyer's broker (called a collaborating broker). The disclosure states that an unreasonable sharing commission or remuneration could reduce a collaborating broker's interest in proposing this property to their buyers.
- The conflict of interest rules are more stringent. A real estate broker can no longer represent a seller if the broker intends to purchase that seller's property. And a real estate broker can no longer represent the buyer in the sale of the broker's own property.
- When a real estate broker decides to change agencies, the client who is already in a contract with that broker now has three choices: 1. to follow the broker to the new agency; 2. to stay with the current agency, without the broker in question; or 3. to terminate the contract. Previously, the client could not request to follow the broker to the new agency without first terminating their contract. (The principle was that the client's contract was with the agency, not the broker. The broker merely represented the agency.)
- We are now required to check the identity and legal capacity of the parties to a real estate transaction. Previously, this was simply good practice. Now it is a requirement.
- We are now required to recommend to someone proposing to buy a property that they have it inspected by a building inspector or other professional. Again, previously this was simply good practice.
- The rules have been relaxed regarding the minimum amount of information that must go on advertising or any other representation by a broker or agency. (Hooray!)
- The exam to obtain a real estate brokerage license or mortgage broker license has changed significantly. Previously the exam was a multiple-choice format with a minimum passing grade for the exam as a whole. Now, it is competency based, with minimum-pass requirements for each subject area, and apparently it is much more difficult.
- The forms we use will continue to be used for the next 18 months, at which point new forms will come into effect.
- Higher fees for real estate brokers!! With all of these changes come increased annual dues, of course, and a requirement that license holders like me pay our professional liability insurance ourselves. (My broker agency used to pay for it.)
Nota bene: I am NOT a lawyer, and the above information is not intended as legal advice. This is my interpretation of the changes that have come, or are coming, into effect based on the information provided to date by our governing organization, the Organisme d'autoréglementation du courtage immobilier du Québec (OACIQ).
I will be formally trained in the new Real Estate Brokerage Act on July 13. If I learn more about the changes then, I'll of course share them here.
How do these changes compare with the law governing real estate in your jurisdiction?