The client’s right of withdrawal in the brokerage contract: A choice to be respected

Section 28 of the Real Estate Brokerage Act provides that the client may terminate the contract at the client’s discretion within three days after receiving a duplicate of the contract signed by both parties. The contract is terminated by operation of law as of the sending or delivery of a written notice to the licence holder.

Since June 13, 2019, this right is absolute:  the client can no longer waive this right.

The right of withdrawal provided in this section applies to a contract concluded between a person or a company and a licence holder, under which the licence holder agrees to act as an intermediary for the purchase, sale, lease or exchange of a portion or the whole of a chiefly residential immovable containing less than five dwellings or a fraction of a chiefly residential immovable held in co-ownership.

If a seller, a buyer, a lessor or a lessee (the client) decides to terminate his brokerage contract and avail himself of the right of withdrawal, he shall notify the licence holder in writing within three days of receipt of a duplicate of contract signed by him and the licence holder. Although it is possible for the client to transmit, from hand to hand, the notice stating that he is terminating the brokerage contract, it is recommended to send the notice by registered mail in order to keep a transmission proof in due time. The contract shall be terminated once the notice is sent or submitted to the broker or agency. It is important to note that the client may avail himself of the right of withdrawal even though the brokerage contract is “irrevocable” (non-terminable).

The licence holder cannot claim any remuneration when the client avails himself of his right of withdrawal, except in the case where a real estate transaction takes place within 180 days following the end of the brokerage contract with a person interested in the property during the term of the exclusive brokerage contract, unless a new exclusive brokerage contract was given in good faith to another licence holder.

To determine the maximum time period within which the right of withdrawal must be exercised, the following principles needs to be taken into account:

• The day marking the starting point is not counted, but the last day is;
• The non-juridical days (see the list below) are counted;
• If the last day falls on a non-juridical day, the deadline is extended to the next juridical day.

The non-juridical days are:

• a Saturday (considered as a non-juridical day);
• a Sunday;
• January 1 and 2;
• Good Friday;
• Easter Monday;
• Monday before May 25, Patriots Day (Victoria Day);
• June 24, Quebec’s National Holiday (St-John Baptist);
• July 1, Canada Day (Anniversary of Confederation), or July 2 if the 1^st falls on a Sunday;
• 1^st Monday in September, Labour Day;
• 2^nd Monday in October, Thanksgiving Day;
• December 25, Christmas Day;
• December 26.

Example:

If a brokerage contract is signed on June 3, the client has until June 6 inclusively to send a written notice to the broker or agency stating that he wishes to terminate the contract. If the contract is signed on June 21, the client has until June 25 inclusively to send the termination notice.