Providing accurate and verified information: An obligation

Any business relationship is primarily based on the trust established between the broker and his client. To earn someone's trust, you must give him the right information. This supposes that the broker has taken the time to verify his information and that he knows what he's talking about. Whenever the client can detect a flaw or, even worse, an error in the information supplied by the broker, trust erodes to the vanishing point and, along with it, the chances of concluding a transaction.

In real estate brokerage, it happens all too often that factors affecting the property in a major way are only discovered when a promise to purchase has been accepted or when the deed of sale is signed at the notary's. Whenever this occurs, we have a seller client and a buyer client who retain a bad impression, not only of the broker responsible for their misfortune, but also of all members of the profession.

Nasty surprises never build confidence in your clients, who never fail to discover the truth sooner or later. On the other hand, reliable information enables them to make an informed decision. Serious verification of information when the brokerage contract is signed goes a long way towards avoiding such situations.

The information verification is all the more important as the broker and the agency executive officer have the duty to provide sound advice to all parties to a real estate transaction. Sections 83 and 85 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising are clear on this point:

83. A broker or agency executive officer must act with objectivity whenever advising or informing the party represented by them or the agency for which they act and all other parties to a transaction. That obligation extends to all the material facts relevant to the transaction and to its object, and must be fulfilled without exaggeration, concealment or misrepresentation. If applicable, the broker or officer must inform the parties of products and services that concern heritage protection and relate to the transaction.

85. A broker or agency executive officer must inform the party represented and all other parties to a transaction of any known factor that may adversely affect the parties or the object of the transaction.

Needless to say that, to do this, a broker must first have properly verified the information he is giving. Providing sound advice means being well informed.

Consumers are entitled to accurate information enabling them to make an informed decision. This is true in all situations involving purchases, and especially in the case of a real estate transaction which, for most clients, is the biggest transaction of their lives.

To ensure that the information supplied to the public is such as to guide consumers in their purchasing decisions, the lawmaker has sought to ensure that brokers seriously verify all material factors that may affect a real estate transaction. Several interventions on this subject can be found in the Real Estate Brokerage Act and its regulations.

Section 5 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising stipulates that:

5. A licence holder must verify, in accordance with generally accepted practice, all information provided to the public or to another holder, and be able at all times to prove the accuracy of the information.

Section 84 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising reinforces this obligation:

84. A broker or agency executive officer must take steps, in accordance with accepted practice, to learn of any factors that may adversely affect the party represented by them or the agency for which they act, the parties to the transaction or the very object of the transaction.

Section 45 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising obliges the broker to give the seller client a copy of the descriptive sheet for his own verification:

45. A licence holder must without delay give to the party represented a copy of every document containing data used to describe the immovable, enterprise or loan secured by immovable hypothec covered by the brokerage contract, using any medium capable of ensuring its integrity, accessibility, authenticity and intelligibility.

Moreover, under paragraph 2 of section 11 of the Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies, the document serving to prove the accuracy of information provided must be included in the records kept by the agency or broker acting on his own account at his establishment.

It is therefore clear that the legislator wanted:

1. that information conveyed to the public and other licence holders be accurate;
2. that the broker always be able to prove it;
3. that the documents attesting this accuracy must be kept in the record of the agency or broker acting on his own account.

For more information, please read the following article: Accuracy and verification of information.

For any questions, feel free to contact Info OACIQ.