Duties and Obligations of the Broker
The practice of real estate and mortgage brokerage is regulated in order to ensure that members of the public are protected when engaging in a real estate transaction through a broker’s intermediary. The rules and conditions of practice governing the profession are set out in the Real Estate Brokerage Act, the Regulations thereunder and the Rules of Professional Ethics. Read this section to learn more about the duties and obligations of your broker.
Promise to purchase and financing of an immovable – The importance of the section relating to new hypothecary loan
Financing can make or break a real estate transaction. Therefore, in order to properly advise his clients, it is important that a real estate broker fully understand the obligations relating to new hypothecary loan. These obligations can be found under section 6 of various mandatory Promises to purchase forms of the OACIQ, namely:
Section 81 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising provides that a broker or agency executive officer must notably “recommend to the person proposing to acquire an immovable that the person have a full inspection performed by a professional or a building inspector who has professional liability insurance covering fault, error and omission”.
Several of you sent us comments regarding the increase in the chargeable fees appearing on that invoice. It is our role to shed light on issues such as these, and to refer you to the documents containing the information that has already been made public on this topic.
The Inspection Department also verifies the operating accounts of agencies and brokers acting on their own account
Although it is stated in the regulations and in the invitation letter, some agency executive officers and some brokers acting on their own account are sometimes reluctant to allow an inspector to verify their bank accounts (statements, cheques and deposit book) other than their trust account.
Good professional practices dictate, among other things, that an agent should discover and disclose any unfavourable factor related to an immovable in order to inform the buyer. To do so, he must question the seller and inform him of his obligations.
Real estate brokers and agencies are sometimes called upon to act as intermediaries for the sale or purchase of an enterprise. In this type of transaction, various scenarios are taken into account, including the sale of assets or the sale of shares, to determine which path is the most advantageous both for the seller and the buyer. The option chosen can also have important repercussions on the real estate broker's or agency’s right to receive compensation. The court cases commented upon below are a good illustration. That is why licence holders must remain vigilant, because some transactions could fall under the jurisdiction of the Securities Act.
It is the person with whom the broker or the agent expects to conclude a purchase, sale or exchange contract.
As an experienced real estate agent, you know quite well that you must fill out a Notice of disclosure whenever there is a potential conflict of interest situation in any real estate transaction, whether you are acting in your professional capacity or not.
The REBA prescribes that every agent is assigned to an establishment and must report there.
PLEASE NOTE: You have until July 31, 2010 to open a general trust account. Since the coming into force of the Real Estate Brokerage Act on May 1, 2010, all real estate or mortgage agencies and real estate and mortgage brokers acting on their own account must open a general trust account.
The OACIQ noticed that some brokers refuse to grant their colleagues the right to take part in the presentation of promises to purchase, arguing that the seller has given them written instructions to this effect. They base themselves mainly on section 100 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising, which states that::