Signing a brokerage contract to sell, purchase or lease

When the owner (natural person) of a residential immovable containing less than five dwellings chooses to sell through a real estate agency or a real estate broker acting on his own account, he must sign a brokerage contract. The same applies to the buyer who wants a broker to represent his interests in the purchase of a property. This agreement gives the agency or broker the right to act as the exclusive or non-exclusive intermediary for a specific period.

Mandatory form

In residential matters, the form that must be used for a brokerage contract to sell, purchase or lease covering an immovable containing less than five dwellings is the one developed by the OACIQ.   Neither the agency nor the selling, buying or leasing client may delete anything from it.

The brokerage contract form may particularly set out the specific conditions and expectations of the selling, buying or leasing client. It also specifies the amount of the agency’s or broker's remuneration and the conditions of payment of the remuneration by the client. This remuneration is generally established on the basis of a percentage of the property's selling price and must be paid to the agency. In this regard, note that Annex RC – Remuneration and Costs allows indicating remuneration methods other than those provided in the brokerage contract. For more information, read the article How can I compensate my residential real estate broker?

Remittance of a duplicate

Under section 25 of the Real Estate Brokerage Act, the real estate agency or broker must give a duplicate of the contract (i.e. a copy containing the original signatures of the parties or signatures that were authenticated according to an electronic signature protocol) to the client and the latter is bound to perform his obligations only as of the time of receipt of this duplicate.

Unfortunately, it may happen that the agency or broker settles for providing a photocopy or completely forgets to remit the duplicate of the contract to the client. These omissions may have considerable impacts. For example the client could refuse to pay the remuneration due to his broker’s agency or to his broker acting on his own account, arguing that he never received a duplicate of his contract. Failure to provide the client with a duplicate of his brokerage contract also has an impact on the right to cancel the contract.