Exemptions from maintaining a general trust account

No. According to the regulations, only real estate brokers acting on their own account and real estate agencies must open and maintain a trust account. A licensee working in an agency cannot open and maintain a trust account. The obligations relating to the opening and maintaining of a trust account are delegated to the agency.

Yes, they are required to open and maintain a single general trust account. However, the licensee may be exempted if he is in one of these three situations:

1. is employed by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ);
2. is employed by a person who is not an agency and the broker engages, as such, in no brokerage transaction described in section 3.1 of the Real Estate Brokerage Act (chapter C-73.2);
3. receives no deposit, advance on remuneration or costs from clients or any other sum for others.  If a licence holder is no longer in this situation, he or she must immediately notify the OACIQ in writing and comply with the obligations related to trust accounts.

Read this article for more details.

The real estate agency may also delegate its obligations relating to the opening and maintaining of a general trust account to one other estate agency.

It is important to remember that the agency that delegated its obligations, as well as the brokers acting on its behalf, remain responsible for the obligations imposed by the regulations, in collaboration with the agency to which they entrusted this responsibility.

Also check:

• Guideline – Keeping, using and conserving records, books, accounts and registers

• The form Trust account - Notice of delegation and declaration of exemptions

• The form Instructions concerning the obligations to open and maintain a trust account

No, a broker acting on his own account may not delegate his obligations relating to the opening and maintaining of a trust account. Only real estate agencies can do so.

The obligation to open a trust account does not apply to a licence holder who files a declaration with the OACIQ to the effect that he is in one of the following three situations:

1. He is employed by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ);
2. He is employed by a person who is not an agency and the broker engages, as such, in no brokerage transaction described in section 3.1 of the Real Estate Brokerage Act (chapter C-73.2).
3. He receives no deposit, advance on remuneration or costs from clients or any other sum for others. If a licence holder is no longer in this situation, he or she must immediately notify the OACIQ in writing and comply with the obligations related to trust accounts.

See the form Trust account - Notice of delegation and declaration of exemptions.

To become a broker acting on his own account, read this article for the steps to follow.

Following your licence modification, you must immediately fill out and send the form Trust account - Notice of delegation and declaration of exemptions to the OACIQ Inspection Department to avail yourself of this provision.

A licensee who is no longer in an exemption situation provided for in the regulations must immediately notify the OACIQ Inspection Department in writing and comply with his obligations by opening a general trust account.

To open a trust account, you must:

• Make an appointment with a financial institution with which the OACIQ has negotiated an agreement;
• Open the account;
• Complete and send the form Declaration related to the opening and updating of a general trust account to the financial institution and to the OACIQ Inspection Department;
• Keep a copy of this declaration for inspection purposes;
• Send a document from the financial institution confirming the opening of the general trust account to the Inspection Department immediately.

The trust account must be opened in Québec with a financial institution with which the OACIQ has negotiated an agreement:

• Caisses populaires et d’économie Desjardins
• National Bank of Canada
• Royal Bank of Canada
• Bank of Montreal
• CIBC
• Toronto-Dominion Bank
• Laurentian Bank
• HSBC (Hong Kong Bank)
• Scotia Bank

For more details, see the Instructions concerning the obligations to open and maintain a trust account form.

The general trust account must be opened at the latest within ten days of the issuance of the agency licence or, where applicable, when a licensee working within an agency changes his licence to that of a broker acting on his own account.

A licensee who no longer meets the criteria of the three exemption situations and is therefore obliged to open and maintain a trust account must do so immediately.

Yes. Under section 43 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising, the licensee must recommend that a deposit be paid into a trust account.

However, the licensee must inform the client that he or his agency does not have a trust account and that the deposit may:

• Be paid into the trust account of the licensee representing the seller or lessor, if applicable;

or

• Be paid into the account of the acting notary in accordance with certain terms and with the notary's permission.

Having a trust account governed by the Real Estate Brokerage Act is an added value for the licensee and, where applicable, for licensees working in a real estate agency that holds one. This notably allows an agency or broker:

• to receive deposits in the course of a real estate transaction (sale or lease) and thus meet the needs of clients –seller/lessor and buyer/ lessee. Remember that a deposit helps, among other things, demonstrate the seriousness, real interest and good faith of the client, more specifically during a cash purchase or when paying the first month's rent in a residential lease; 
  
• to have the possibility of requesting advances on remuneration or costs in the course of real estate brokerage contracts;
  
• to constitute a competitive advantage in the market by facilitating, for example, the recruitment of brokers;
  
• to promote a proactive and creative approach in the development of business models;
  
• to foster a professional real estate brokerage image, considering that the system that supports the opening, maintenance and management of a trust account is based on trust.

The main obligations are:

• The obligation to manage sums for others in accordance with the regulations (e.g. compliance with fiduciary clauses, receipt issuance, etc.).
  
• The obligation to keep and maintain an up-to-date trust transaction register.
  
• The obligation to maintain separate accounting and prepare a monthly reconciliation according to generally accepted accounting principles.
  
• The obligation to send the Organization an annual trust transaction report before March 31 of each year, even though there was no activity in the trust accounts during the year and the account balance was $0 throughout the year.

No. A licence holder who receives such deposit may only place it in a licence holder’s trust account.

Remember that it is strictly prohibited to use another account (e.g. current account, transaction account, etc.) than the trust account to deposit sums belonging to others.

You will need to inform the buyer of the options available to him:

• Pay the deposit into the trust account of the other licensee engaged in the transaction, if applicable.
  
• Pay the deposit into the trust account of the acting notary in accordance with certain terms and with the notary's permission.
  
• Amend the fiduciary clause to provide for timelines so that you or your agency can open a trust account. In which case, you can receive the deposit once your trust account (or that of your agency) has been opened. A licensee working within an agency will need the permission of his/her executive officer before offering this option.

At all times, make sure you respect the buyer's wishes by providing him with all the necessary information so he can make an informed decision.

No, a licence holder who receives such deposit may only place it in a licence holder’s trust account.

Remember that it is strictly prohibited to use another account (e.g. current account, transaction account, etc.) than the trust account to deposit sums belonging to others.

You will need to inform the tenant of the options available to him:

• Pay the deposit into the trust account of the licensee representing the lessor, if applicable.
• Amend the fiduciary clause to provide for timelines so that you or your agency can open a trust account. As the timelines are usually very short in residential leasing, this is not the best option and the licensee working within an agency will need to obtain the permission of his/her executive officer before offering this option.
• Pay the first month's rent directly to the lessor.

At all times, make sure you respect the tenant’s wishes by providing him with all the necessary information so  he can make an informed decision.

No. Any sum received by a licence holder as advance on remuneration or costs (amount agreed upon by means of the form Annex RC – Remuneration and Costs) must be paid without delay into the general trust account opened under the name of the licence holder receiving the sum.

To receive an advance on remuneration or costs, the broker acting on his own account or the agency for which the broker acts must therefore have a trust account governed by the Real Estate Brokerage Act.

Remember that it is strictly prohibited to use another account (e.g. current account, transaction account, etc.) than the trust account to deposit sums belonging to others.

Yes, since you are in a situation that corresponds to one of the exemption criteria provided for in the regulations.

You must email the following documents to the OACIQ Inspection Department at inspection@oaciq.com:

• The form Trust account - Notice of delegation and declaration of exemptions.
  
• The Trust Transaction Report for the current year, even though there has been no activity in the trust account or the account balance has been $0 since the beginning of the year.
  
• The Register of general trust account transactions.
  
• Bank statements for the current year or, if not, a bank document confirming the inactivity of the account.
  
• Document from the financial institution confirming the closing of the trust account.
  
• The duly completed form Notice of closing of a general trust account.

For more details, see the document Instructions - Trust Transaction Report.

No, because you are holding sums for others as a trustee. You must therefore keep these sums in trust in accordance with the fiduciary clauses in transaction proposals or other agreements. When you no longer hold any sums belonging to others, you may close the trust account by following the procedures to this effect.