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Update in Quebec’s brokerage law

In an effort to strengthen consumer protection, the Quebec National Assembly has adopted amendments to the Real Estate Brokerage Act (REBA) by prohibiting dual representation and verbal brokerage contracts in residential brokerage in Quebec. This new legislation comes into force on June 10, 2022.

These changes will significantly alter the behaviour of buyers and, as a result, the practices of real estate brokers, on a permanent basis. The National Assembly is asking the real estate industry to put buyers and sellers on an equal footing.

For many years, brokerage contracts[1] have been available in Quebec to regulate the relationship between buyers and brokers, but they were rarely used, unlike brokerage contracts, which have been mandatory in the residential sector for most of the time.

What are the benefits for buyers?

By making the brokerage-purchase contract[2] mandatory, the legislator has put an end to the hesitations of brokers and the industry regarding its use. As of June 10, 2022, a buyer who wants to retain the services of a real estate broker to purchase a property will have to sign a mandatory brokerage purchase contract[3] if he wants the broker to represent his interests, acting fairly, diligently and competently. The purchase contract[4] will have the effect of raising standards. Brokers will have contractual obligations to verify, protect and advise the buyer, who will be better served.

With this new obligation to sign a brokerage contract[5] for the buyer, it was also necessary to foresee in these legislative changes what would happen in cases where the buyer’s broker also represents a seller.

Dual representation is therefore prohibited as of June 10, 2022. This ban on dual representation will significantly reduce the potential conflicts of interest that can arise when a buyer contacts the seller’s broker directly to purchase the property.

A broker must therefore terminate a contract to purchase if the property being purchased is listed with that same broker.

The contract for the purchase[6] of an immovable is terminated by operation of law as of the sending or delivery of a reasoned written notice by the broker to his client, which must indicate the immovable in question. The broker must also recommend that his client enter into a new contract[7] to purchase an immovable* with another broker.

For example, within the REALTA team, the same broker cannot represent both the buyer and the seller.  However, the buyer’s broker and the seller’s broker can be part of the same REALTA team. This way, both sides benefit from the professionalism and quality standards of our agency.

It will always be possible for a buyer to contact the seller’s broker directly for the purchase of the property, but the seller’s broker will not be able to represent the buyer, and must of course treat the buyer fairly. The seller’s broker cannot claim to represent the buyer’s interests, thus reducing the broker’s responsibilities to the buyer. The seller’s broker must also, before writing a promise to purchase[8], recommend that the buyer enter into a contract[9] for the purchase of an immovable with another broker.

In summary, as of June 10, 2022, if you are a buyer without a purchase contract[10], you should contact a REALTA broker to take advantage of these new rules and protections. The agency is delighted with this news, which is in line with our values of offering the best possible service to all our clients. To find out more: Amendment to the Real Estate Brokerage Act regarding dual representation in residential brokerage | OACIQ

[1]Buy, rent or exchange

[2] Buy, rent or exchange

[3] Buy, rent or exchange

[4] Buy, rent or exchange

[5] Buy, rent or exchange

[6] Buy, rent or exchange

[7] Buy, rent or exchange

[8] Buy, rent or exchange

[9] Buy, rent or exchange

[10] Buy, rent or exchange

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