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Changes to brokerage forms – Highlights

On June 8, 2022, new mandatory brokerage forms came into effect. Below are the highlights of the changes made, along with the forms and their explanatory leaflets.

Background

In November 2020, the OACIQ launched a consultation on the revision of three mandatory forms (Brokerage contract – Sale, Promise to Purchase and Declarations by the seller of the immovable), notably with a view to harmonizing them with the changes made in 2018 to the Real Estate Brokerage Act (REBA). In the course of this exercise, we collected the comments of licence holders and those of the various stakeholders. The OACIQ collaborated with the Ministry of Finance to improve the forms. As we know, since 2018, the content of the mandatory brokerage forms must be approved by the Minister of Finance. The purpose of many of the modifications made is to clarify the forms and make them easier to understand for the consumer.

In December 2021, amendments to the REBA were announced and came into force on June 10, 2022. These changes also had impacts on the forms. For more information on these amendments, see the FAQ on the amendments to the REBA

Since June 1, 2022, the online training Prohibition of double representation and changes to residential brokerage forms (2 CEUs) allows full-service brokers and brokers restricted to residential brokerage to acquaint themselves with the changes.

Forms concerned

The changes affect the forms concerning chiefly residential immovables containing less than five dwellings excluding co-ownership. Click on each form to read highlights of the modifications.

IMPORTANT
Henceforth, all forms are only available in electronic format, via InstanetFormsTM.

Exclusive brokerage contract – Purchase (BCP)

Further to the changes announced to the Real Estate Brokerage Act, the form Exclusive brokerage contract – Purchase (BCP) has undergone some changes, particularly in relation to transactions where there may be a double representation situation. Visit the FAQ on the amendments made to the REBA to learn more about the prohibition of double representation and verbal brokerage contracts  in residential brokerage in Québec.

Highlights of the changes made to the BCP form:

  • A statement was added to the effect that the contract can be terminated in a double representation situation, in accordance with section 29.1 of the REBA.
  • The waiver of the right of withdrawal has been removed.
  • The information about the buyer’s available cash has been removed.
  • A warning has been added to inform the client that the remuneration sharing may vary between from one licensee and from one property to another, and that it may exceed the remuneration agreed upon in the BCP. The licensee must inform the client of the remuneration share expected before the client makes a purchase proposal.
  • Clauses 7.4 and 7.5 concerning the buyer’s obligation to inform the broker about his financial capacity and about any change in his financial situation or his marital status have been removed.
  • The verification requirement concerning information that does not come from another broker or agency has been clarified.
  • The procedure to terminate the contract in case of double representation has been added (clause 8.1.5).
  • A reminder of the obligations regarding the privacy of personal information, a box on the role of the OACIQ and signature blocks have been added.

See the modified form and its explanatory leaflet for more details on the changes.

Also, when signing the brokerage contract to purchase, the broker must inform the buyer in writing that the contract could be terminated if he wanted to present a promise to purchase for an immovable for which he is also acting as the seller's broker, i.e. in the case of double representation. In this case, the broker can insert standard clause 1.16 in section 10.1 of the form ("Other declarations and conditions") or in the "Annex G - General" form, which must be attached to any brokerage contract to purchase.

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Exclusive brokerage contract – Sale (EBCS) and Non-exclusive brokerage contract – Sale (NEBCS)

Since June 8, 2022, a new mandatory brokerage form has come into effect: the Non-exclusive brokerage contract – Sale (NEBCS). Consumers will now have to present both types of brokerage contracts to the seller, i.e. exclusive and non-exclusive, and have the seller initial his choice of contract. The form Non-exclusive brokerage contract – Sale (NEBCS) includes differences from the exclusive contract, for instance the obligation for the seller to notify the broker if he enters into another brokerage contract. Also, the remuneration is due only if the sale takes place during the term of the contract and the broker is the efficient cause of the sale.

Highlights of the changes made to the EBCS and NEBCS forms:

  • Some clauses only apply to the Exclusive brokerage contract– Sale, e.g. the 180-day clause, broker exclusivity, etc.
  • Some clauses only apply to the Non-exclusive brokerage contract – Sale, e.g. the obligation for the seller to notify the broker if he enters into another brokerage contract, the accessibility of the DS to other brokers with whom the seller has signed a brokerage contract, etc.
  • In the NEBCS, the remuneration is due only if the sale takes place during the term of the contract and the broker is the efficient cause of the sale.
  • In both types of contracts, the seller has the right to sell the immovable by himself.
  • The waiver of the right of withdrawal has been removed.
  • The requirement of a certificate of location reflecting the current physical state of the premises has been added.
  • The obligation of the licence holder to disclose to the seller any sharing he intends to make of his remuneration, other than with the collaborating broker has been added.
  • A reminder of the obligations regarding the privacy of personal information, a box on the role of the OACIQ and signature blocks have been added.

See the explanatory leaflets of the highlights and the new forms Non-exclusive brokerage contract – Sale and Exclusive brokerage contract – Sale in order to fully understand the differences between the two and to advise your clients properly.

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Declarations by the seller of the immovable (DS)

To make things easier to understand for the consumer and to take into account current real estate market trends, the form Declarations by the seller of the immovable (DS) has undergone several structural changes. To see what changes have been made to the sections and the questions themselves, see the concordance table.

Highlights of the changes made to the DS form:

  • Items have been clarified and reworded to make them easier to understand for the consumer.
  • A preamble has been added to explain the purpose of the form in order to reduce the risk of litigation and promote transparency.
  • Questions have been added to take current trends into account, including short-term leasing, energy efficiency certification, charging stations for electric cars, the question on cannabis growing has been reworded, etc.
  • Questions have been added on changes to or relocating or replacing of parking spaces, rights-of-way, fences separating neighbour properties, and on the addition of pools, windows, sheds, fences, etc.
  • A box on the role of the OACIQ and signature blocks have been added.

See the modified form and its explanatory leaflet for more details on the changes.

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Promise to purchase (PP)

A few changes have been made to the form Promise to purchase (PP).

Highlights of the changes made to the PP form:

  • The deposit clause has been reworded to provide for two times to pay the deposit (with the promise to purchase or within 72 hours following fulfillment of conditions) and to simplify electronic transfers. 
  • A statement has been added to document the broker’s obligation to inform his client on the importance of having a pre-purchase inspection done (already in force since June 22, 2021).
  • Addition of an exact time after the expiry of the period specified in the inspection clause (before 8:00 pm).
  • A statement to the effect that the immovable is being sold with legal warranty has been added. 
  • The requirement of a certificate of location reflecting the current physical state of the premises has been added.
  • A reminder of the obligations regarding the privacy of personal information, a box on the role of the OACIQ and signature blocks have been added.

See the modified form and its explanatory leaflet for more details on the changes.

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Reference number
224715
Last update
May 29, 2023