Solicitation and compliance with the exclusive brokerage contract: Important rules

The OACIQ would like to remind you that the exclusivity of a brokerage contract must be respected by other agencies and brokers throughout the term of a contract, even when its end date approaches.

In practical terms, respecting the exclusive nature of a brokerage contract means that before soliciting the owner of a property, it is important to ensure that he did not sign an exclusive brokerage contract with another agency or broker. Indeed, section 99 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising provides that: “A broker or agency executive officer must not perform any act that is incompatible with an exclusive brokerage contract made with another licence holder."

Sometimes the exclusive brokerage contract is renewed by the seller and his broker only shortly before its end date. It is therefore important not to make any premature solicitation efforts. This could be sanctioned by the Discipline Committee.

Practical examples

1. The Discipline Committee condemned a Laval broker who sent a solicitation letter to a seller a few days before the end date of his exclusive contract. Considering that the aim of the Rules of Professional Conduct is to maintain a climate of healthy competition within the profession, not only in the interest of brokers but also in the public interest, the Committee imposed a fine of $1,500 on the offending broker.
(File 33-96-0129).

2. A broker from Rimouski went to a seller’s home despite the existence of an exclusive brokerage contract and the presence of a sign of another agency. This broker spoke to the lady and pointed out to her that “since she is within three days of signing her brokerage contract, she may withdraw from it.”

He then advised the seller to exercise her right to cancel the contract and he himself mailed the letter. He became the beneficiary of a new exclusive brokerage contract, making the lady waive her right to cancel the new contract, which has not been possible since June 13, 2019. (See the article entitled The client’s right of withdrawal in the brokerage contract: A choice to be respected.)

The Committee ordered the offending broker to pay a fine of $1,500 and to practise under the constant supervision of a chartered broker (real estate broker AEO) for several months, in addition to successfully completing two training courses–one on the Real Estate Brokerage Act and the other on contract drafting.
(File 33-98-0118)

Don’t risk violating your ethical obligations.

Questions?

Please contact Info OACIQ.