Barely 16 months after amendments to the Quebec Real Estate Brokerage Act to prohibit the same broker from representing both the buyer and the seller in a transaction, the rules will change again. Brokers had found a way to get around this ban.
To circumvent the law, real estate brokers currently use a team strategy.
During open houses of a property sold by a broker on his team, a broker waits for future buyers with his card to represent them in the transaction.
The sellers’ broker and his colleague representing the buyers each have personal information about their clients that is crucial to the transaction. Whether it’s the difficult situation of a divorcing couple in a hurry to sell, a person going bankrupt or the rock bottom price an owner wants to obtain.
“A broker cannot say that he will be able to ignore the information he knows about a client and change sides whenever he wants,” says Caroline Champagne, vice-president, in an interview with La Presse. supervision at the Self-Regulation of Real Estate Brokerage of Quebec (OACIQ).
“You can no longer be in a situation where you represent the other party, because you can no longer be loyal to them, you are no longer in a situation where you protect your client,” she insists.
The other team strategy is to put on a for sale sign not the telephone number of the broker who is selling it, but that of a colleague who can pick up buyers who call to visit it.
These practices, repeatedly denounced by consumers, but also by brokers, are so widespread that the OACIQ had no choice but to intervene.
Starting November 9, 2023, a new administrative measure will be mandatory for all real estate brokers in Quebec. This change was announced this Thursday during the OACIQ annual event, where more than a thousand real estate brokers gathered.
Whether there are three, five or twenty members on a team, all brokers will wear the same hat during a transaction: all team members must represent the sellers or buyers.
When the team’s remuneration is pooled, brokers have no interest in a buyer coming from another real estate agency or even another team of the same banner. Then comes a series of doubts in a consumer’s mind: Did I get the best exposure for my home and the best price? Have I had access to all the properties for sale that meet my needs?
The OACIQ will require brokers to officially register all members of a team, to have team contracts and to ensure that any team advertising is clear to the consumer.
Real estate brokers who violate the law face fines ranging from $2,000 to $50,000, license suspension or training requirements.
