The OACIQ's expectations regarding the compliance program and public protection
The OACIQ has developed the Agency Executive Officer’s Compliance Program to reinforce the oversight of real estate brokerage and promote a culture of compliance among licence holders.
Real estate brokerage compliance means that all licensees should comply with the legislative and regulatory framework. It is fundamental and mandatory.
The agency executive officer must “take all reasonable measures to ensure that the persons employed by or authorized to act on his or her behalf comply with the Real Estate Brokerage Act (chapter C-73.2) and the regulations made under it.” There must be a clear commitment from the agency executive officer to ensure that licensees act at all times with prudence, diligence and competence and that they show integrity, courtesy and a spirit of cooperation. The agency executive officer is responsible for implementing, applying or ensuring that a culture of compliance is applied as a core part of the agency's values.
It is therefore essential to establish a credible and effective compliance program within the agency. A compliance program contains a set of policies (what), procedures (how) and monitoring measures (verifications) developed and implemented by management to manage the risk of non-compliance with the regulations. The compliance program must be written and available to all agency licensees and employees.
To specify and clarify the regulator's expectations, the OACIQ has explained the Real Estate Brokerage Act and its regulations in ten guidelines divided into four main topics–general compliance obligations, obligations toward the public, obligations toward other licensees, and operational and administrative management obligations. These guidelines contribute to licensee compliance and equip agency executive officers in their supervisory role.
General compliance obligations
1. Licence issuance and maintenance
The Real Estate Brokerage Act (REBA) requires that anyone pursuing brokerage activities in Québec be the holder of a licence issued by the OACIQ. The regulations set out the requirements imposed on these licensees in terms of licence issuance and maintenance (renewal) and voluntary or involuntary cessation of activities. The licensees’ right to practise may be subject to conditions or restrictions and they may practise in different ways.
In the compliance program, the agency executive officer must define the control mechanisms to ensure compliance with these requirements.
The aim of this guideline is to examine each of these points.
2. Selection and oversight of agency licensees and employees
In the area of selection:
- The AEO must actively participate in selecting brokers to ensure that they meet his compliance requirements.
- In the compliance program, the agency executive officer must define the selection criteria and control mechanisms to ensure compliance with his requirements.
In the area of supervision:
- Agency executive officers and their directors and executive officers must ensure that the employees and licensees representing them comply with the REBA and its regulations. By showing a clear, ongoing and unequivocal determination to ensure compliance, they convey that violations of the REBA are in no way acceptable or tolerated.
In the compliance program, the agency executive officer must define the means, frequency and control mechanisms for overseeing the practice of his licensees and employees.
Obligations toward the public
3. Conflicts of interest
Licensees must avoid placing themselves in a conflict of interest. The term avoid means that real estate brokers are prohibited from placing themselves in a conflict of interest. To do this, they must actively take the necessary measures in this regard. In addition, where they are directly or indirectly involved in the transaction, licensees are required to disclose their status and the nature of their interest in the transaction.
In the compliance program, the agency executive officer must define the means, frequency and control mechanisms for overseeing the practice of his licensees and employees regarding conflicts of interest.
The aim of this guideline is to examine these obligations.
4. Representation, solicitation, promotion and advertising
Representations made by licensees, and the advertising and information they disseminate, must comply with the REBA and its regulations. These rules apply not only to licensees, agency executive officers and directors, but also to franchisers and any person or partnership promoting real estate brokerage services.
The agency executive officer must ensure that representations and advertising do not cause confusion or damage the image of the profession. He must also pay particular attention to social media.
In the compliance program, the agency executive officer must define the means, frequency and control mechanisms for overseeing the practice of his licensees and employees in this regard.
The aim of this guideline is to examine these obligations.
5. Verification, information and advice
The duty to verify, inform and advise is at the very heart of the real estate broker's profession. To provide reliable information to the public, the licensee must verify it beforehand. The advice given must be based on the information obtained in connection with the proposed transaction. These duties are therefore inextricably linked. However, the duties to verify, inform and advise are quite distinct.
In the compliance program, the agency executive officer must define the means, frequency and control mechanisms for overseeing the practice of his licensees and employees in this regard.
The aim of this guideline is to examine each of them.
6. Protection of personal information
Brokers collect a lot of personal information about the parties to a real estate transaction. Estate brokers and agencies are required to protect this information.
The Act to modernize legislative provisions as regards the protection of personal information gives individuals more rights regarding the use of their personal information. It imposes new obligations on licensees, especially regarding the principle of consent and the collection, use and retention of their clients' personal information.
In the compliance program, the agency executive officer must define the means, frequency and control mechanisms for overseeing the practice of his licensees and employees regarding the protection of personal information.
Check out the toolkit for privacy protection.
7. Complaint management and collaboration with the OACIQ
The real estate agency must set up a control mechanism to handle the complaints received. A complaint management policy helps licensees meet their obligations and, at the same time, supports the public protection measures.
Consumers must be informed of the regulator's role and the protections offered to them under the Real Estate Brokerage Act. Real estate brokers are required to cooperate with the OACIQ in connection with requests for information, documents and meetings, in the course of a meeting with the syndic or requests from the Inspection Department.
In the compliance program, you must define the means, frequency and control mechanisms for overseeing complaint management.
Obligations toward other licensees
8. Collaboration and remuneration sharing
Collaboration between brokers is at the heart of real estate brokerage. It must occur at every step of the real estate brokerage practice. Broadly speaking, the licensee must use fair competition and client solicitation practices and demonstrate reasonable availability. The licensee must also ensure that remuneration agreements and remuneration sharing are compliant. The aim of this guideline is to examine these obligations.
In the compliance program, you must define the means, frequency and control mechanisms for overseeing collaboration and remuneration sharing.
Obligations related to operational and administrative management
9. Keeping, using and conserving records, books, accounts and registers
The Real Estate Brokerage Act (REBA) and its regulations govern the keeping, use and conservation of records, books, accounts and registers. Rigour is required when it comes to managing sums for third parties in trust accounts. The aim of this guideline is to examine these obligations.
In the compliance program, you must define the means, frequency and control mechanisms for overseeing operational and administrative management of the agency.
10. Preventing money laundering and real estate fraud
Licensees must not participate in any act or practice in real estate matters that may be illegal or harm the public or the profession.
Two legislative and regulatory sources require the licensee to play a primary watchdog role in the fight against money laundering in the real estate industry: a provincial Act, the Real Estate Brokerage Act (REBA) and a federal Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Licensees must be able to recognize money laundering indicators in real estate-related financial transactions and report them to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
In the compliance program, you must define the means, frequency and control mechanisms for overseeing the prevention of money laundering and real estate fraud.
The aim of this guideline is to examine the obligations in this regard.
It is essential that the agency executive officer fully understand the regulator's expectations and ensure that they are met. The compliance program is the tool that will enable him or her to establish a culture of compliance within the agency. The risks to which licensees are exposed will be controlled and mitigated by implementing a credible and effective compliance program. At the same time, public protection will be strengthened.
- Reference number
- 205923
- Last update
- September 17, 2024