Real estate brokerage forms

When a seller (natural person such as liquidator of a succession) refuses to complete and sign the Declarations by the seller of the immovable form or indicates on this form “I refuse to complete the form” and sign it (which is in fact the same thing), the broker simply cannot conclude or perform the brokerage contract with this person. The  Declarations by the seller of the immovable forms are mandatory forms and the broker must use them in a transaction involving a residential immovable containing less than 5 dwellings, an undivided co-ownership (DS) or a fraction of an immovable held in divided co-ownership (DSD).¹ A broker who violates this rule may be subject to a disciplinary complaint.

¹  S. 129.1 and 129.2 of the Real Estate Brokerage Act (CQLR, c. C-73.2), s. 46.11 of the  Regulation respecting brokerage requirements, professional conduct of brokers and advertising (ch. C-73.2 r.1)

Yes. A buyer cannot be represented by a broker without being bound to him by a written contract. If the broker does not sign a written brokerage contract with the buyer, he cannot represent the buyer. In this case, the broker will be working for the seller's broker and may receive his remuneration share from the agency or the seller’s broker.

If the broker decides to be bound by a written contract to a natural person for the purchase of a chiefly residential immovable containing less than 5 dwellings, the Brokerage Contract – Purchase form developed by the OACIQ must then be used. It enables the broker to be remunerated by the buyer (natural person) for the purchase of such immovable. For more details, please read the following article: Instructions to the notary regarding remuneration: a specific clause on this subject.

In December 2021, the Minister of Finance proposed amendments to the Real Estate Brokerage Act (REBA) to strengthen consumer protection by prohibiting double representation and verbal brokerage contracts in residential real estate brokerage in Quebec.¹ The changes to the REBA have been in force since June 10, 2022. For more information, read this article.

The broker should always recommend to the buyer of an immovable to have it completely inspected by a professional or a building inspector who:

1. has a professional liability insurance covering fault, error or omission;
2. uses a recognized inspection service agreement;
3. performs inspections according to recognized building inspection standards; and
4. submits a written report to the party that requested the inspection services.

However, the buyer can choose to deal with the person of his choice. Thus, should a buyer insist on dealing with an individual other than a professional or a building inspector, who are specifically indicated in clause 8.1 of the PP (for example, his brother working in construction field), the broker must amend this inspection clause by crossing out “building inspector or a professional” phrase, having this amendment initialed by the buyer and then indicating instead the qualification of the individual who will conduct the inspection beside clause 8.1 itself or in clause 12.1 (e.g. construction foreman). However, there should be a written inspection report in order for the clause to be used. The seller will be free to accept or refuse this condition, as worded. If he accepts it, he should also initial this amendment before signing the Promise to purchase form.

No. The Exclusive brokerage contract – Sale form (in section 7) (or the “non-exclusive” version) must at least include the portion offered to the collaborating broker or agency. Thus, a broker cannot indicate 0% in clauses 7.1 and 7.3 of the Brokerage Contract – Sale (exclusive or non-exclusive) and include his remuneration method only in Annex - Costs and Remuneration.

Yes. To do so, the broker must sign with the seller an amendment form and specify in clause M1 the number of the Brokerage contract and the address of the immovable concerned and, in clause M5, refer to the number of the duly completed Annex - Costs and Remuneration.

No. The “seller’s broker” phrase in this clause refers to the broker acting on his own account who represents the seller. In the case of the broker working for an agency, it’s only the agency which can instruct the notary to pay remuneration.

In the case where the seller is willing to accept

If the seller wishes to accept the promise to purchase and the enhancements form, the broker shall indicate “ACCEPT” in the “Seller’s reply” under the “Signatures” section of the promise to purchase form and have the seller sign it. The latter will not only be bound by the terms of the promise to purchase, but also by the terms of the Enhancements prior to acceptance form that he has signed, because of the following statement contained in the “Seller’s reply” section of this form: “Should the promise to purchase be accepted, he will be bound by the terms of this form.”

Note that if several enhancements are submitted consecutively prior to the acceptance of the promise to purchase, the last one does not automatically cancel the previous ones. In this case, the licensee shall indicate on the new Enhancements prior to acceptance form that the previous forms will be replaced, while retaining the benefits offered in clause B2.2 of the previous forms and specifying that the new price offered will replace all previous price enhancements.

In the case where the seller wants to refuse or make a counter-proposal

If the seller wishes to refuse or make a counter-proposal to a promise to purchase with an enhancement, the broker shall simply indicate “REFUSE” or enter the number of the counter-proposal in the “seller’s reply” under the “Signatures” section of the promise to purchase form and have the seller sign it. The broker shall also have the seller and, if applicable, his spouse, sign the Enhancements prior to acceptance form.

In general, the clause AV4.3 of the Notice and follow-up on fulfillment of conditions – Immovable form can be completed by a broker to enable a buyer to give various notices to a seller under clause 8.1 of the promise to purchase (inspection by an individual designated by the buyer).

It should be noted that the best practice is to let the buyer benefit from any time frame set forth in the inspection clause in order to have the property inspected, get and read the report and decide whether to make the promise to purchase null and void. Thus, the notice by which the buyer informs the seller that he waives the reading of the inspection report (second box of clause AV4.3) should be used with caution by the broker. Indeed, the broker should not systematically advise a buyer to waive the reading of his inspection report, because this could be source of disputes in some cases (e.g.: challenging case where the written report reveals afterwards an element that had not been disclosed verbally by an inspector during the inspection).

However, this notice could be selected in the case where a second buyer would insist on quickly fulfilling the inspection condition set forth in his promise to purchase because of another promise to purchase already accepted by the seller and made conditional upon the sale of the buyer’s immovable. Thereby, the use of this notice would speed up the seller’s process to cancel the first promise to purchase accepted.

Finally, insofar as the inspection report is in the buyer’s hands, the broker should not at any time advise him to waive its reading. It is not in cases where the buyer is waiting for the inspection report and he wants to speed up things that this notice could be selected.

In the case where a buyer wishes to add to his promise to purchase, before it is presented, one or more elements that do not constitute an enhancement, clause B2.2 of the Enhancements prior to acceptance form should not be used. Rather, the prospective buyer must send a revocation before his promise to purchase reaches the seller, at which point his promise will become null and void. He may then draft a new promise to purchase that includes the additional condition or conditions promoting the buyer's interests, in accordance with the parameters set down in this article: Can a promise to purchase be withdrawn?. However, in the case where the revocation does not reach the seller before the promise to purchase, the buyer is bound by his promise until the deadline indicated. The prospective buyer may neither revoke his promise nor add additional conditions promoting his own interests.

If the buyer wishes to enhance his offer several times,  he will submit multiple Enhancements prior to acceptance forms. However, this practice is not recommended as it may cause confusion when the offer to purchase is eventually accepted. Despite this recommendation, if the buyer still wishes to re-enhance his offer, the licensee must advise the buyer that this latest enhancement does not automatically cancel the previous ones. Therefore, the licensee shall indicate on the new Enhancements prior to acceptance form that the previous forms will be replaced, while retaining the benefits offered in clause B2.2 of the previous forms and specifying that the new price offered will replace all previous price enhancements.

When a brokerage contract to sell must be sent to a real estate board for the distribution of information concerning an immovable, the broker must make a copy of the contract and hide the personal information that appears in clauses 1.1 and 1.2. This information must not be permanently hidden since the broker must keep the original document in his physical file or his EDM (electronic document management) file.

The Regulation respecting brokerage requirements, professional conduct of brokers and advertising provides that the broker must respect the confidential nature of information given to him (section 31). 

In addition, the Act respecting the protection of personal information in the private sector was recently amended. Among other things, as of September 22, 2023, the penalties for failing to respect the confidentiality of personal information will be substantial, including fines for a natural person ranging from $5,000 to $100,000. For a second or subsequent offence, these amounts will be doubled.

Note that those who use EDM systems must print the contract, hide the confidential information in clauses 1.1 and 1.2 and send the document with the information hidden to the real estate board.

For any questions, please contact Info OACIQ.

No, since the Enhancements prior to acceptance form provides that “Should the promise to purchase be accepted, he (the seller) will be bound by the terms of this form.” Note that if several enhancements are submitted consecutively, the last one does not automatically cancel the previous one (see question 11). In the event the seller’s broker receives, prior to acceptance or refusal of the promise to purchase by his client, the Enhancements prior to acceptance form of which section B2.2 does not really constitute an enhancement (see question 11 for the elements that constitute an enhancement), he might present his client with the following choices:

• Accept the promise to purchase and the Enhancements prior to acceptance form;
• Reject the promise to purchase and the Enhancements prior to acceptance form; or
• Make a counter-proposal to the promise to purchase and its enhancement.

Sale of an enterprise whose assets are principally immovable property

If you carry out brokerage transactions relating to the sale of an enterprise, under a single contract, and that the enterprise’s main assets (according to its market value) consist of one or many immovables, these transactions are covered by the Real Estate Brokerage Act.

Brokers can use the OACIQ recommended form Exclusive brokerage contract – Sale of an immovable (or the “non-exclusive” version). The broker will have to complete his contract by annexing clauses about the terms and conditions specific to the enterprise. In this regard, recommended standard clauses have been drafted by the OACIQ. They have been designed to supplement the OACIQ form Exclusive brokerage contract – Sale of an immovable, or the “non-exclusive” version.

For more information, please read the following articles:

• What forms should be used for the sale of an enterprise?
• Commercial immovable or enterprise: mandatory statements in any brokerage contract or transaction proposal
• Standard clauses to be added – Sale of an enterprise

Sale of an enterprise whose assets are not principally immovable property

If you carry out brokerage transactions relating to the sale of an enterprise of which the main assets do not consist of immovables, you may use the recommended forms as indicated above. As of May 1, 2021, where there was no coverage until now, policyholders will benefit from a coverage sub-limit of $1,000,000 when a transaction involves the sale of an enterprise whose assets are not principally immovable property. However, note that some enterprise sales could be subject to laws administered by the Autorité des marchés financiers (AMF), which could result in additional obligations. Check with the AMF.

For more information about your insurance, please check your insurance policy or contact FARCIQ directly by telephone at 450-656-5959 or 1-866-956-5959 or by fax at 450-656-5746 or by email at [email protected].

In addition, we suggest that you get another insurance to cover your professional liability and notify the parties engaged in the transaction that they might not benefit from all protection mechanisms provided in the Real Estate Brokerage Act.

Sale of an enterprise excluding any immovable

Finally, if you carry out brokerage transactions relating to the sale of an enterprise which does not include an immovable, you may continue to use the ACAIQ forms i.e., “Exclusive brokerage contract – sale of an enterprise excluding any immovable” and “Promise to purchase – Enterprise excluding any immovable”, by making the necessary changes. In this regard, please read the article entitled: What has happened to forms relating to the sale of an enterprise since July 1, 2012?.

The notification is no longer required to ensure that the parties are bound. Acceptance is sufficient.

However, this does not discharge the broker from his obligation to promptly notify the buyer of the refusal or acceptance of his promise to purchase. On one hand, this is in order not to create ambiguity, i.e. in order not to falsely believe that he is released from his obligations whereas his offer would actually be accepted. On the other hand, in the case where an offer is accepted, the obligation to immediately notify the buyer aims at not reducing the time frames for fulfilling the conditions set out in the Promise to purchase (e.g.: time frames for inspection or for obtaining financing). Although the “Acknowledgement of receipt” section of the Promise to purchase and Counter-proposal forms can be completed for this purpose, nothing prevents brokers from using other means (for example, telegram).

In addition, brokers can always decide to use the standard clause 3.18 Acceptance including notification clause, if desired.

To protect the public, when there is a change affecting the agency or broker, it is recommended that all signatures be obtained on the client’s reply, including that of the spouse, inasmuch as he/she was included in the original brokerage contract. Putting off obtaining the spouse’s consent could cause substantial harm to the seller should he be unable to obtain it at the time of the sale of the immovable.

The standard notices that include a client reply form for changes affecting the agency or broker are available on synbad.com and have been amended accordingly.

No, it is not possible to enter this information on the screen since it is up to the parties to enter the real place, date and time of their signing. In addition, this good practice helps prevent fraud cases and decrease erasures or the risk of incorrect information in the form.

Yes, the "Declarations by the seller of the immovable" (DS) form must be included in the description sheet, in the broker sheet. Concerning the client sheet, in accordance with the regulation respecting information on properties, it must indicate the existence and availability of this form, and its number. However, the documents that must be provided by the seller with the DS form (for instance invoices, leases) do not have to be included in the sheet, but will have to be communicated to any broker or buyer who asks for them or can be obtained using clause 9.1 of the Promise to purchase, "Review of documents by the buyer". Any Amendments (AM) form amending a DS form must also be included in the sheet with the DS form.

The best practice for the seller’s broker is to upload all the pages of the DS form to the description sheet intended for other brokers. 

Indeed, the seller’s broker must give buyers’ brokers access to the DS form containing the seller’s signature to help them draft a full promise to purchase.  The DS form must be provided without the buyer’s broker having to make a special request to this effect to the seller’s broker, given the collaboration duty between brokers. 

However, as the seller’s signature on the DS form constitutes personal information, its use by brokers must be limited to the context of the real estate transaction concerned, i.e. only for drafting a promise to purchase. 

Brokers representing the seller or buyer must respect the confidential nature of information given to them (section 31 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising). 

In addition, the Act respecting the protection of personal information in the private sector was recently amended. Among other things, as of September 22, 2023, the penalties for failing to respect the confidentiality of personal information will be substantial, including fines for a natural person ranging from $5,000 to $100,000. For a second or subsequent offence, these amounts will be doubled.

For any questions, please contact Info OACIQ.

Yes, the "Declarations by the seller of the immovable" form will remain available under the same conditions and according to the same deadlines as the description sheet of an expired brokerage contract. This information can be relevant to any broker responsible for selling the immovable afterwards. It is also relevant to any broker representing a buyer for the subsequent purchase of this immovable, especially in the case of a property for sale by owner (FSBO). This will allow them to fulfill their duty to inform. However, a caution should be included in the description sheets that can be consulted on the information dissemination services, stating that the information included therein is possibly not up to date.

Under clause 6.1 of the Brokerage contract – Sale (exclusive or non-exclusive), the seller gave his authorization to send the information about the immovable to subscribers of information dissemination services, particularly to establish comparables and statistics.

Yes. Brokers must act with transparency and disclose to buyers all factors that may adversely affect an immovable, even many years after these declarations. It is up to the parties engaged in the transaction, and not brokers, to decide on the relevance of the information contained in these declarations. This measure of permanence will help brokers in their duty to discover all factors that may affect the immovable.

Yes. A recommended form entitled Identity verification was developed by the OACIQ. It can be used by the broker. The Identity verification form should not however be annexed to a promise to purchase. The personal information collected by the broker as part of this verification shall also not be communicated to the seller or the broker who represents him during the presentation of a promise to purchase. The Identity verification form will be placed on record to show that the buyer's identity verification was conducted.