How should you manage your brokers’ absences?

Obligation of the broker who must be absent towards his clients

It is perfectly normal for a broker to take time off for vacation or for personal reasons. In such cases, however, he must designate another broker to replace him.

Under section 77 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising, a broker must demonstrate a reasonable degree of availability or otherwise designate another licence holder as a replacement, and must take the necessary measures to ensure that all communications are dealt with in his or her absence and that all files are properly followed up. In his or her absence, customer service must be assured in a reasonably continuous manner, regardless of the length of the broker’s absence. He must therefore designate a replacement. In case of dispute, the broker’s availability will be examined on a case-by-case basis by the Discipline Committee.

The replacing broker must have the necessary skills and authorizations to carry out the brokerage activities (residential, commercial, mortgage) that are required of him.

For example, a full-service real estate broker who has active residential and commercial listings cannot name a broker restricted to commercial brokerage as his replacement, as the latter’s licence will not allow him to serve the residential clients.

Broker representing an agency

For a broker representing an agency, the best practice is to have a broker from his own agency replace him.

Failing this, he should get his agency executive officer’s authorization to be replaced by a broker acting on his own account or from another agency.

It is important to remember that a broker working for an agency cannot legally employ another broker to carry out brokerage transactions. Only an agency may employ or authorize to act on its behalf a natural person who holds a brokerage licence. Allowing a broker to hire another broker would be the equivalent of assigning him the role of a real estate agency.

Broker acting on his own account or agency executive officer acting alone

A broker acting on his own account or an agency executive officer who has no broker working for him must be replaced by a broker acting on his own account or by another agency.

PREPARING ONE’S ABSENCE

Notice to broker’s clients

• First, the broker must contact the sellers to notify them verbally of the length of his absence, and the name and contact information of the broker (and his agency, if applicable) who will be replacing him.
• Second, the broker must confirm everything in writing to his clients (if the length of absence so warrants).
• The broker should also notify his agency and his colleagues of his absence.
• The broker must give his replacement the information needed to replace him adequately.

When the replacing broker acts on behalf of another agency

The replacing broker remains employed by his own agency. He cannot carry out brokerage transactions on behalf of the agency of the broker he is replacing or on behalf of the broker if the latter acts on his own account.

In addition, the replacing broker cannot receive remuneration directly from the broker he replaces.

The replaced broker’s agency must pay any remuneration due directly to the replacing broker if acting on his own account, or to his agency, which will in turn pay the replacing broker.

The same goes for a sub-franchisee. A broker who works for a sub-franchisee and acts as replacement for a broker working for the franchisee must not lead others to believe that he is authorized to act on behalf of the franchisee. It is important to note that a sub-franchisee agency is a legal entity that is distinct from the franchisee, so these are two separate agencies.

A few examples illustrating that the replacing broker remains employed by his own agency:

• The replacing broker who provides information on one of the replaced broker’s listings does so on behalf of his own agency;
• If a visitor is interested in presenting a promise to purchase, the replacing broker can draft and present it, but he will be acting as representative of his own real estate agency and the promise to purchase will clearly identify the name of the replacing broker and that of his agency;
• Regarding negotiations that are already underway, the replacing broker may advise the replaced broker’s selling client, but always on behalf of his own real estate agency.

EXAMPLES OF CONCRETE APPLICATIONS

Signing of a brokerage contract in the absence of the replaced broker:

In this case, the safest route for all parties involved is to draft the brokerage contract in the name of the replacing broker’s agency only, and mention under clause 11 that the name of the replaced broker’s agency (or of the broker acting on his own account) will be added as a co-lister upon his return, conditional upon his acceptance to be a party to the contract. Upon the broker’s return, his name and the name of his agency, if applicable, will be added using an Amendments form.

There could also be a situation where the replaced broker would want, in accordance with the replacement and remuneration agreement signed prior to his departure, authorize the replacing broker to sign the brokerage contract in his absence, but for himself to become the sole listing broker again upon his return (the remuneration terms for the replacing broker for this arrangement could be indicated in the agreement between brokers). In this case, transparency is important and the seller must be informed. A statement should be added under clause 11 indicating that the replaced broker will be the sole lister upon his return. An indication in the Amendments form should then be made to this effect when the replaced broker returns.

It really depends on the replacement and remuneration agreement that is negotiated prior to the broker’s departure. This agreement must be clear to avoid any misunderstandings, both for the brokers and for the consumer.

Signing of an Amendments form in the replaced broker’s absence

• There placing broker may be required to make changes to an existing brokerage contract on behalf of the absent broker, e.g., changes to an immovable’s selling price or the amount of remuneration. The client’s consent will then always be required.
• However, these changes should be made in accordance with the agreement made with the replaced broker prior to his departure. It is not up to the client to verify what was agreed to between the brokers. The client must be able to assume that the broker chose a trustworthy person to replace him.
• If a broker is replaced by a broker from another agency, the replacing broker must be authorized to amend the contract in the replacement agreement approved by the agency executive officer.