Amendments to the Real Estate Brokerage Act – Bill 30

Since 2018, the Real Estate Brokerage Act has stated that the publication of mandatory brokerage transaction forms is conditional on their approval by the Minister of Finance. (s. 129.1).

Until now, the Act did not provide any mechanism for publishing changes to those forms ahead of their publication by Ministerial Order. As of May 9, 2024, the amendment to section 129.1 allows the Minister to set in advance the date of coming into force of any changes to the forms, which might be later than their publication date in the Gazette officielle du Québec.

This amendment is the result of discussions between the OACIQ and the Ministry of Finance, in an effort to facilitate the integration of new practices and ensure a healthy approach to change management within the industry. This mechanism will enable the OACIQ to inform licence holders ahead of time of any changes to the forms and, where applicable, to introduce training tools.

The amendment of the definition of a residential immovable in section 23 of the Real Estate Brokerage Act will clarify the categorization of any land intended for residential construction.

This clarification was necessary in order to harmonize it with the rules of the Civil Code of Québec which define land as an immovable asset.

Indeed, the Civil Code of Québec defines land as an immovable asset:

« 900. Land, and any constructions and works of a permanent nature located thereon and anything forming an integral part thereof, are immovables. (…)  »

Section 23 of the Real Estate Brokerage Act is therefore amended: 

« CHAPTER III
CONTRACTS CONCERNING CERTAIN RESIDENTIAL IMMOVABLES

23. This chapter applies to real estate brokerage contracts concerning any of the following immovables:

(1) part or all of a chiefly residential immovable comprising less than five dwellings or of land intended for residential construction; or

(2) a fraction of a chiefly residential immovable that is subject to an agreement or declaration under articles 1009 to 1109 of the Civil Code."

Impact on transactions concerning residential land after the amendments take effect

It is normal for the public to expect any obligations concerning residential transactions to apply as well to transactions concerning land intended for residential construction.

The licence holder must therefore routinely check zoning regulations to verify land use before signing a brokerage contract concerning land intended for residential construction.

a) Contract evidenced in writing on the mandatory form prepared by the OACIQ (s. 24 REBA)

In the case of land intended for residential construction, the licence holder must sign a written contract with the client on one of the following mandatory forms:

Sale:

• Exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (EBCS) or
• Non-exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (NEBCS); and
• Declarations by the seller of the immovable – Chiefly residential immovable containing less than 5 dwellings excluding divided co-ownership (DS)

Purchase:

• Exclusive brokerage contract – Purchase – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership (BCP).

What happens to brokerage contracts that were signed before the coming into force of the amendments?

Since the coming into force of Bill 30, it is no longer appropriate or possible to use the recommended form Exclusive brokerage contract – Sale – Immovable (BCG), as was previously the case.

If you signed a BCG before the coming into force of the amendments, the contract will still be valid, regardless of its expiration date. If, in the course of the BCG, it becomes necessary for you to amend the contract, you will have to use the form Amendments (AM) but you do not have to redo the contract on the EBCS/NEBCS form, even if it is after the coming into force of the amendments.

Adjustments to make to the form Declarations by the seller (DS)

The licence holder must inform the selling client of his obligation to fill out the Declarations by the seller (DS) form in the event of a transaction concerning the sale of land intended for residential construction. The adjustments must be made depending on each individual case. This obligation does not apply, however, to brokerage contracts signed prior to the coming into force of the amendments.

Keep in mind that the term “immovable” used in this form includes land.

Thus, in the case of land that is undeveloped and contains no foundation, answering the questions on the DS form that pertain directly to buildings would be unnecessary.

D2. General Information: questions D2.2 to D2.7
D3. Land (Soil): question D3.2 (if there is no foundation)
D4. Damage Caused by Water
D5. Basement and Foundation
D6. Undesirable Animals (vermin)
D7. Interior Air Quality
D8. Roof
D9. Plumbing and Drainage: questions D9.1 to D9.7; D9.11 to D9.13
D10. Energy: questions D10.2, D10.4 to D10.8
D11. Telecommunications: question D11.2
D12. Heating, Air Conditioning and Ventilation

The licence holder must add a note to that effect in section D15 – Details

IMPORTANT: You must therefore assess every situation, and depending on the context, decide whether or not a question on the DS form must be answered.

For example, you may not ignore the questions connected with the constructed building, even if it is for the sale of a “building for demolition”, where the interest is in the land.

In the case of a burned building, you must assess whether the foundations still exist and, if yes, the questions regarding the foundations must be answered.

b) 180-day clause applicable in exclusive contracts (EBCS)

As in the case of constructed residential immovables, the broker representing the seller may avail itself of the clause that allows it to claim remuneration. The sale of residential land must be completed within 180 days, with a person who became interested during the term of the exclusive brokerage contract, unless the seller, during this period, entered in good faith into an exclusive brokerage contract with another licence holder.

c) Right of cancellation (EBCS or NEBCS)

Pursuant to section 28 of the Real Estate Brokerage Act and as provided in the mandatory forms of the OACIQ, the client may cancel the brokerage contract concerning residential land at his discretion, within 3 days after receiving a duplicate of the contract signed by the two parties.

d) Double representation prohibition (EBCS or NEBCS)

The rules prohibiting double representation in residential transactions (s. 29.1 REBA) apply to transactions concerning residential land. For more information on the double representation ban, visit the FAQ page.

e) Promise to purchase on the OACIQ mandatory form

Since residential land is considered as a residential immovable, licensees must use the OACIQ mandatory form Promise to purchase – Chiefly residential immovable containing less than five dwellings excluding co-ownership (PP) for this type of transactions.

It is no longer appropriate to use the recommended form Promise to purchase – Immovable (PPG).

An offer to purchase submitted via the PPG form prior to the coming into force of the amendments remains valid, as well as any amendments that can be made to it using the Amendments (AM) form.

f) Mandatory annexes

In a transaction involving residential land, licensees must also use the mandatory annexes for immovables containing 5 dwellings and less, for example: Enhancements prior to acceptance (EA), Remuneration and costs (RC), Financing (AF), Annex R - Residential immovable (AR), etc.

Pursuant to discussions between the OACIQ and the Ministry of Finance, the Real Estate Brokerage Act provides that the regulator has the option of choosing a monetary administrative penalty rather than initiating a disciplinary process. This allows it additional flexibility in the fulfillment of its mandate to protect the public.

While the contravention of any rule governing the practice of real estate brokerage remains unacceptable and in an effort to increase compliance and ensure the protection of the public more effectively, certain categories of offence may be the object of a monetary administrative penalty (MAP) in order to achieve the desired deterrent effect.

A MAP is a monetary penalty that the licence holder will be required to pay in the event of a failure to comply. The failures must be determined in advance by law or by regulation. Thus, the Real Estate Brokerage Act provides for three (3) types of offence:

• Failure to send anyone, within the time required by the OACIQ, the information prescribed by the REBA or its regulations;
• Failure to evidence in writing the contract concerning a residential immovable; or
• Failure to give his or her client the duplicate of the brokerage contract concerning a residential immovable.

Process for the imposition of monetary administrative penalties provided by the REBA

• In the event of a failure to comply in the above referenced cases, the OACIQ shall send the licence holder a notice of non-compliance to allow him to remedy said failure within the prescribed time period. However, if the licence holder does not remedy said failure by the set deadline, a monetary administrative sanction will be imposed.
• The REBA provides for a monetary administrative penalty of $250 per day in the case of a broker licence holder and $1,000 per day in other cases (e.g. the case of an agency licence holder). The law provides that a failure to comply for which a monetary administrative penalty may be imposed shall constitute a new failure for every day it continues.

The Act provides that the licence holder has the option of requesting a review of the monetary administrative penalty imposed by the OACIQ; the licence holder may also challenge the decision regarding the review application before the Administrative Tribunal of Québec.

The Act also provides that failure to pay a MAP may lead to the suspension of your licence, either as an independent broker, an agency representative, or even the agency’s own licence.

A clarification has been made to section 63 of the Real Estate Brokerage Act in order to confirm the public nature of the information contained in the Register of licence holders.

Please take a moment to acquaint yourself with Bill 30.