3. Broker’s method of practice
A broker acting on behalf of an agency does so under the supervision and oversight of an agency executive officer. He undertakes to abide by the Compliance Program put in place within the agency. His obligations regarding the keeping, use and conservation of records, books and registers are delegated to the agency, but the broker must send all the information required for this purpose to the agency without delay.1
A broker acting on behalf of an agency may choose to practice within a business corporation under certain conditions set by the OACIQ. This option is not available to brokers acting on their own account. To operate within a corporation, the broker acting on behalf of an agency must fill out an Application for authorization to practice within a business corporation (PDF), which must be signed by the broker’s agency executive officer and forwarded along with all the documentation required and the payment of applicable fees.
To get authorization to practice within a business corporation, a broker acting on behalf of an agency must meet the following criteria:
- His corporation must be registered with the Registraire des entreprises du Québec or incorporated under the Québec Companies Act;
- He must directly hold (not by the intermediary of another natural or legal person) at least 90% of the voting rights attached to the corporation’s shares;
- He must be the president of his corporation;
- He must act exclusively for the agency through his corporation;
- The name of the corporation must include the broker’s full common name as it appears on his licence, and not only his initials. This name must not include the name of a third party, contain the word “agency,” or create confusion.
Where a broker carrying on activities within a business corporation becomes aware that one of the requirements prescribed in the Real Estate Brokerage Act and its regulations is no longer met, he must, within 15 days of becoming aware, take the necessary measures to rectify the situation, failing which he will cease to be authorized to carry on activities within the business corporation.
In addition, where the OACIQ becomes aware that the broker was authorized to carry on activities within a business corporation under false pretences, the broker will immediately cease to be authorized to carry on activities within that corporation.1
A broker acting on behalf of an agency may wish to change agencies or start acting on his own account. It is strongly recommended to avoid these changes during the course of a transaction due to their impacts on brokerage contracts in progress. In addition, clients must be advised.
To change his method of practice in order to act on his own account, the broker must fill out the form Application for licence modification – Real estate broker (PDF) and have completed all mandatory training required for this change. For more details, see section 3.2 – Real estate broker acting on his own account.
For a change of agencies, the broker must complete the form Notice of change of real estate or mortgage agency (PDF). In both of the above situations, the broker must enter the address of his establishment and include the payment of applicable fees.
A broker who obtained his licence AFTER May 1, 2010 may act on his own account as soon as his licence is issued. A broker who obtained his licence BEFORE May 1, 2010 (former affiliated agent) may act on his own account provided he:
- is the holder of a valid broker’s licence;
- has completed, over a maximum period of 18 months, the Mandatory Continuing Education Program to act on one’s own account (8 sessions) or passed, at the time, the certification examination for “Former affiliated agent wishing to act on one’s own account”. Click here for more details.
- has successfully completed a basic training program for agency executive officers recognized by the OACIQ and passed the OACIQ skills-based examination for agency executive officers.
When a real estate broker chooses to act on his own account, he does not benefit from the oversight of an agency executive officer. In making this choice therefore, the broker must be aware that he has an obligation to carry out his activities while taking into account his aptitudes, knowledge limits and means available. Among other things, he has an obligation to manage an establishment according to regulatory requirements. He is also responsible for discharging the obligations related to the keeping, use and conservation of records, books and registers. This includes the obligation to maintain a trust account.
Thus a broker acting on his own account must:
- open a trust account within 10 days following the issuance of his licence (in this regard, see the document Instructions concerning the obligations to open and maintain a trust account form [PDF]) All licensees must take Managing trust accounts training course as soon as they are required to open a trust account. Note that a licensee is exempt from this obligation if he receives no deposit, advance on remuneration or costs from clients, or any other sum for others. When he is no longer in this situation, he must immediately notify the OACIQ in writing and comply with the trust account requirements.1 See this article for more details.
- attend a startup session facilitated by the OACIQ Inspection Department;
- complete the self-inspection questionnaire before March 31 of each year;
- develop and implement a Compliance Program that meets OACIQ requirements, including a component related to compliance with the regulatory requirements arising from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) outlined in the guideline Preventing money laundering and real estate fraud.
A broker acting on his own account may not hire other brokers, nor may he act under a pseudonym or through a corporation for tax purposes.
To change his method of practice in order to carry on activities on behalf of an agency, a broker acting on his own account must fill out the form Application for licence modification – Real estate broker (PDF), making sure to enter the address of his establishment (his new agency) and to include the payment of applicable fees.