In order to establish a bond of trust with your real estate broker at all stages of the transaction, it is important to know what is his role.
Once a broker has completed his basic training and obtained his licence, he is required to maintain his knowledge and skills up to date. The OACIQ also oversees his practice by developing mandatory forms designed to standardize real estate transactions.
Duties and obligations of a real estate broker
Inform and verify
Your broker must make the necessary verifications and be able to demonstrate the accuracy of the information he gives you, and provide all related documentation. Among other things, he will:
Validate the accuracy of the information regarding the area of the property;
Verify municipal and school tax amounts;
Verify the details of any leases provided by the seller (income properties);
Take steps to discover any factor that may affect the immovable; this includes the municipality’s conditions regarding services such as water, septic tanks, etc., or whether a right (such as a right-of-way) is registered against the immovable in the land register.
Act with transparency
Your broker must act with transparency and integrity at all times. He has an obligation to keep all parties to the transaction informed of any factors that could affect the transaction, including by:
Telling you if the property you are considering has ever been used to grow cannabis and informing you about the potential problems related to the purchase of this type of property, even if this particular property has since been rehabilitated;
Collaborating with all other brokers involved in the transaction and, where applicable, informing you of any remuneration sharing agreement he has concluded.
Disclose
Your real estate broker must avoid placing himself in a conflict of interest. If a conflict cannot be avoided, he must disclose it in writing without delay to all the parties involved in the transaction. For instance:
He must notify you if he holds an interest in the property you are interested in (for example if the property is owned by him, his spouse or a relative, such as his parents, if he represents them);
He must inform you if he receives a benefit of any kind for referring you to a third party (e.g. an evaluator or a financial institution).
Be loyal to you
Your real estate broker is bound by a strict obligation of loyalty towards you, his client. He must promote your interests and protect your rights, while acting fairly towards all parties to a real estate transaction, for example by:
While remaining loyal to you, acting fairly and equitably towards each of the other parties to the real estate transaction.
Advise you properly
Your real estate broker has a duty to advise and inform you objectively. For instance, he will:
Explain all the clauses of the forms he is asking you to sign, such as the Exclusive Brokerage Contract – Purchase, the Promise to purchase, the Declarations by the seller of the immovable and the Counter-proposal, if applicable;
Advise you as to the price you wish to offer on your promise to purchase and the conditions you should include for your protection; (e.g. zoning verification, chimney inspection, other expert evaluations to be done due to the location of the property, including pyrrhotite);
Make sure the content of the forms reflects your wishes;
Recommend that you have a pre-purchase inspection done on the property and, where the situation requires, that you use the services of a recognized expert (e.g. if the certificate of location shows anything that is not compliant or doesn’t match, he will recommend that you consult with a notary);
Provide you with a list (containing more than one name) of professionals or building inspectors who meet the requirements of the Real Estate Brokerage Act.
Be available
Your broker must be available to represent you. He must take appropriate action and follow-up on all communications received, by:
Informing you as quickly as possible when a counter-proposal is received;
If he is not available to respond within a reasonable time frame, designate another broker to replace him. The executive officer of his agency can also handle this for him.
Use OACIQ forms
To protect your interests, the OACIQ has designed a number of forms and contracts which brokers are required to use depending on the situation. When a broker presents you with an OACIQ form (bearing the OACIQ logo), you may be assured that this form has been validated at every stage and is constantly being updated.
Protect your interests
A broker’s duties and obligations are all aimed at one thing: protecting your interests in a transaction.
Each broker must be covered by professional liability insurance in case of fault, error or omission in the course of a transaction.
And finally, all brokers are required to pay into the Real Estate Brokerage Indemnity Fund or FICI, which protects you in case of fraud, dishonest tactics or misappropriation of funds by a broker or agency.
When the seller does not seem to be represented by a broker, your broker must, among other things:
Verify whether, despite appearances, the property is actually being offered through a broker;
Confirm the identity of the seller, since the latter is not represented by a broker;
Inform the seller that he has an obligation to protect and promote your interests, but that he will still treat the seller fairly (e.g. your broker may help the seller to complete the transaction documents properly, with all the necessary clauses, and make sure the seller understands the documents he is having him sign);
Tell the seller that he has the right to be represented by a broker of his choice;
If the seller does not wish to be represented by a broker of his choice, your broker must ask him to complete the form Declarations by the seller of the immovable. If the seller refuses to do so, your broker must advise you to the best of his knowledge.
GOOD TO KNOW
When the seller does not seem to be represented by a broker, your broker must, among other things:
Verify whether, despite appearances, the property is actually being offered through a broker;
Confirm the identity of the seller, since the latter is not represented by a broker;
Inform the seller that he has an obligation to protect and promote your interests, but that he will still treat the seller fairly (e.g. your broker may help the seller to complete the transaction documents properly, with all the necessary clauses, and make sure the seller understands the documents he is having him sign);
Tell the seller that he has the right to be represented by a broker of his choice;
If the seller does not wish to be represented by a broker of his choice, your broker must ask him to complete the form Declarations by the seller of the immovable. If the seller refuses to do so, your broker must advise you to the best of his knowledge.
