1. Identification of the parties
Any contract by which a broker or agency undertakes to act as intermediary regarding an immovable must include the contact information of the parties to the transaction in section 1. Identification of the parties, so that each party has the information needed to contact the other party if needed.
This information must include, as a minimum:
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the parties’ full names;
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their addresses including postal codes;
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their phone numbers.
The information can also include the email addresses if this method of communication is used by either party to the contract.
Identification of the agency and the broker
For the identification of the agency or the broker, the box indicating whether the party to the contract is an agency or a real estate broker acting on his own account must be checked. If the broker is acting on behalf of an agency, he must enter the name of the agency as it appears on his licence, as well as the agency’s contact information, including complete address, phone number and email address of the establishment. The broker acting for an agency must also enter his name as it appears on his licence along with his licence number. He may also enter his email address.
If the broker is acting on behalf of an agency and is operating within a corporation, he must specify this by checking the appropriate box and entering the name of the corporation underneath. The name of the corporation must include the broker’s name or the common name as it appears on his licence.
All names, addresses and license numbers included in the contract to correctly identify the agency and the broker representing it, or the broker acting on his own account, must match the information on the licence issued by the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ).
Note that the term “BROKER” in capital letters on the mandatory form refers to the broker acting on his own account. A broker acting on behalf of an agency is designated by lower case letters. This nuance is important because it allows, throughout the contract, to clearly identify who is concerned by one clause or another.
Identification and teamwork
More and more brokers are joining forces to offer their services under the “Team” formula. This is not simply a matter of co-listing, but rather a team structure in which each member plays a role. Although this formula has many advantages for both clients and team members, it requires a measure of vigilance to ensure that brokers involved abide by their ethical obligations. Here is an overview of the best practices to adopt in this situation.
A. Signing of the brokerage contract
In the "Team" formula, the agency is represented not by a single broker, but by a team as a whole, which must be expressly indicated in the brokerage contract.
Here are the important things to keep in mind:
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It is the agency name and the establishment address that must be indicated in the first section of the brokerage contract ("Identification of the parties");
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In addition, in the "represented by" section, the team name and the licence number of the agency representative and team leader must be indicated;
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In the section "carrying on activities within the following business corporation", it is necessary to check and indicate the name of the business corporation, if applicable;
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Under the "Signatures" section of the brokerage contract form, the agency representative and team leader must affix his or her electronic signature;
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As an alternative, the team leader could give a power of attorney1 to other team members so that they can represent him or her for the purpose of signing the brokerage contract. However, note that the other obligations and duties of a team leader and team members under the regulations are neither reduced nor changed as a result of such a power of attorney; they remain the same.
POWER OF ATTORNEY – TEAM CONTRACT
I, the undersigned, ___________________________________________ [name of agency representative and TEAM leader], _____________________________________ [address], hereby designate ___________________________ [name of licence holder – team member] ___________ [licence number], ________________________________ [address], as my mandatary.
I hereby give my mandatary the power to sign and/or amend the real estate brokerage contracts identified with the name of the team ___________________________________________.
I understand that, despite the signing of this power of attorney, I remain responsible for my obligations and duties under the Real Estate Brokerage Act and its regulations. The obligations and duties of other team members are in no way changed or reduced as a result of this power of attorney.
This power of attorney expires on ____________________ [MM-DD-YYYY].
Signed in ___________________________________________ [city], on_____________________ [MM-DD-YYYY].
___________________________________________
[Name of agency representative and team leader]
______________
[Licence number]
1 The power of attorney must comply with the general rules relating to the mandate in the Civil Code of Quebec (art. 2130 and following). The mandator may revoke his power of attorney before the end date indicated therein. He must then consider notifying the third parties and stakeholders concerned to prevent them from continuing to deal with the mandatary (art. 2181 C.C.Q.). You may use the document suggested by the OACIQ or your own template as long as all essential information is included.
B. Duty to inform the client: respective responsibilities of team members
The client dealing with a team needs to know what responsibilities each member has. Indeed, it is essential to ensure that the client fully understands the specifics of operation of the team he will be dealing with before signing the brokerage contract.
When communicating with many team members, the client may wonder who he should consult for information or advice. It is therefore crucial to clarify each member’s role at the outset. Providing the client with a brochure or a link to a website that describes the roles and duties of each team member is essential when signing the brokerage contract.
For example, here are some tasks that can be performed by either one of the team members:
- The initial exchange with the client
- The market value analysis
- The signing of the brokerage contract
- The taking of measurements and photos
- The showings and post-showing reports
- The drafting of a promise to purchase with the buyer and negotiations
It is all the more important to properly inform the client when he or she chooses to do business with a team because of the identity of a particular member within the team (e.g. family relationship, friend, reference, etc.). Indeed, the client must be well aware of the consequences that could result from the member’s departure or cessation of activities. Being well informed helps avoid possible imbroglios and misunderstandings and allows for a better understanding of the respective obligations.
As stated in the Regulation respecting brokerage requirements, professional conduct of brokers and advertising (c. C-73.2, r.1), should a change be affecting the agency or the signatory of the contract (team leader), the client must be formally notified in writing2. This would not apply if a team member, who has not signed the brokerage contract, changes agency or status.
Remember that the notice must expressly state:
- the client's right to continue doing business with the agency or team leader who is now acting on his own account or for a new agency; or
- the client's right to terminate the brokerage contract.
2 In accordance with sections 24 and following of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising (c. C-73.2, r. 1)
C. Team - seller's broker
In the "Team" formula, the entire team represents the seller. Since the licence holder represents the party to which he is bound by brokerage contract, if the name of a team member appears on the brokerage contract to sell, in a brochure or on the team's promotional website as a contact person for the seller, this member cannot act as the buyer’s broker for the immovable concerned.
But can a team member draft a Promise to purchase for the buyer? Yes, just like a broker working alone. He has the same status as a seller’s broker working with an unrepresented buyer. In this situation, the Act stipulates that the broker has an obligation to inform the buyer that he does not represent him, that he represents the seller but will provide fair treatment to the buyer. The buyer who is not bound by a brokerage contract remains free to deal with a broker of his choice at all times.
D. Duties of team members
CONFIDENTIALITY — Whether they are representing the seller or the buyer, all team members will have access to confidential and strategic information about the client. This confidentiality must be respected by everyone.
PUTTING A PROPERTY ON THE MARKET — Remember that the broker must, when his client wishes to use an information listing service for an immovable, list the immovable with this service without delay.” It is forbidden to start putting the property on the market before listing it on the information listing service, unless written instructions to the contrary are given by the client3.
In the case of the Brokerage contract – Sale, this means that team members will have to wait for this dissemination before taking any steps with their buying clients.
REAL-TIME INFORMATION SHARING — A team’s structure must allow for the same information to be disseminated without delay to each team member where required, to ensure uniform sharing of information between the team members and the parties to the transaction.
This information must be entered on the appropriate documents and kept, as required, in the agency’s records, books and registers. This practice helps avoid errors. Let us take the example of a property for sale for which, following building inspection, a defect is discovered and added to the previously completed Declarations by the seller of the immovable form. If, in the meantime, another team member drafts a Promise to purchase using the previous version of the Declarations by the seller of the immovable form, the file will not be compliant.
The use of a “collaborative space” accessible to all team members can be an effective solution since it provides real-time access to new information about a property. In addition, to avoid any problems, the information must be easily accessible and promptly relayed to other team members and to the other party's broker.
3 Section 44 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising.
E. Obligations towards collaborators – appoint a contact person
There is some confusion when it comes time to presenting a Promise to purchase on a team listing. Brokers often wonder which team member they should contact. The team leader? The broker whose name appears on the listing? The broker who confirmed the visit or the one who opened the door?
It is good practice to include the name of a contact person for the team in the publication on the information listing service. This way, the buyer's broker will know exactly to whom he should send his request, whether it is a request for a visit or for the presentation of a Promise to purchase, for example.
The role of the agency executive officer
Working as a team can be done in the context of an agency. In this case, the agency executive officer is responsible for overseeing this practice, including by:
- informing brokers about the impacts of teamwork
- making the team members aware of potential conflicts of interest
- authorizing or limiting teamwork as necessary
To remember: although teamwork is an attractive business model for many brokers, it is crucial that the parties be clear at all times as to who represents whom, and that a party who is not represented be informed of that fact. All brokers involved remain bound by their ethical obligations, and the jurisprudence confirmed that the team model cannot be invoked as an excuse for shirking one’s responsibilities. In other words, brokers must choose their partners with great care, as the latter’s errors could have an impact on their own careers.
Identity verification
The licence holder must verify and ascertain the identity of the party he is representing as well as the identity of any other parties to the transaction if they are not represented by a licence holder. This is an obligation under section 29 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
The broker must note in the record the information concerning the identity of the party he represents and, if he has not been able to meet this party in person, keep the documents that were used to verify their identity.
Verification of legal capacity
The broker must perform the usual verifications in the Québec Land Register to ascertain the identity of the owners and make sure that the ownership titles are in their name.
For more information: Guideline – Preventing money laundering and real estate fraud – 6. Verifying the identity and legal capacity of the represented party and their representative and Training – Identification and identity verification: knowing who you’re dealing with
