Public articles

Commercial immovable or enterprise: What a brokerage contract or transaction proposal must contain

The OACIQ did not develop any mandatory forms for brokerage contracts and transaction proposals involving an immovable containing five dwellings or more, a commercial or industrial immovable, an enterprise or a vacant land.

What to do in the event the seller passes away

The brokerage contact is not automatically terminated due to the client’s death. However, certain actions should be taken.

Are you preoccupied by the occupancy date?

Clause 11.2 of the Promise to purchase specified the date at which the selling owner agrees to make the premises available to the new buyer. Sometimes the buyer wishes to occupy the premises before the date of signing of the act of sale. The OACIQ strongly advises against this practice since there are major risks involved for the seller in granting such a right to the buyer.

Shedding light on hidden defects

In real estate field, a defect is considered hidden if it has all the following features: […]

Disclosure of a suicide: the Superior Court confirms the usefulness of the declarations by the seller

On November 21, 2013, the Superior Court determined, in Fortin c. Mercier⁽¹⁾ judgment, that the seller of an immovable had the obligation to inform buyers that a violent death had occurred therein.

The importance for the parties of clearly understanding the promise to purchase

When drafting the promise to purchase, the real estate broker must discuss each phase of the buying process with the buyer in order to avoid surprises along the way. This step must include an analysis of the buyer’s needs and objectives and an evaluation of his financial capacity. It is up to the broker to ensure that the buyer clearly determines what he is looking for based on his means.

Exercising servitude rights when using the distribution grid

During a real estate transaction, real estate brokers often have to deal with cases of non-compliance with the obligations or rights contained in Acts of Servitude. Infringement of a servitude may delay the finalization of a transaction, and often causes problems between the seller, buyer and creditor. Hydro-Québec regrets having to do so, however, as the owner of a distribution network, it must assume its obligations and responsibilities.

Payment of rent: the first payment and terms of payment

Concerning the payment of rent, section 1904 of the Civil Code of Quebec provides that:

“The lessor may not exact any instalment in excess of one month's rent; he may not exact payment of rent in advance for more than the first payment period or, if that period exceeds one month, payment of more than one month's rent.

Nor may he exact any amount of money other than the rent, in the form of a deposit or otherwise, or demand that payment be made by postdated cheque or any other postdated instrument.”

Heavy fines for carrying out the activity of an agency and broker illegally

Carrying out the activity of a real estate or mortgage agency or broker illegally is a violation of the Real Estate Brokerage Act.

Can a promise to purchase be withdrawn?

The promise to purchase signed by the buyer shall be binding on him until the expiry of the acceptance period indicated in clause 14.1. The broker must always inform the buyer that his promise to purchase binds him to the seller as soon as it is signed.

Clause 10.5 of the promise to purchase, to ward off unpleasant surprises

Should the buyer or the seller be notified, following the fulfilment of conditions, but before the signing of the deed of sale, of any defect or irregularity whatsoever affecting the titles of the immovable or the declarations and obligations of the seller, the buyer has a recourse provided under clause 10.5 of the Promise to purchase form (for the Promise to purchase – Divided co-ownership (PPD) form, it’s under clause 10.7). If the buyer learns that the immovable has a defect or irregularity (e.g. an inground pool encroaching on a Hydro-Québec servitude), he is not bound to purchase the immovable with this irregularity.

Aging oil tanks - How to lessen the difficulties they can cause

Insuring an immovable with an oil tank that is aging⁽¹⁾ or has been improperly or inadequately maintained can prove difficult. This in turn could jeopardize a transaction. When selling such an immovable, real estate brokers must be mindful of their duty to inform and advise, which will help reduce the problems that the presence of such a tank can cause.

Property Transfer Duties

As indicated in section 2.1 of the Act respecting Duties on Transfers of Immovables, the tax brackets are increased each year according to the Consumer Price Index for Quebec.

Notice to the Land Register in case of land contamination

The Environment Quality Act (''the Act'') establishes rules regarding land protection and rehabilitation in case of contamination. It is supplemented by the Land Protection and Rehabilitation Regulation, whose purpose includes setting out the types of industrial or commercial activities that require a particular treatment and establishing contamination limit values beyond which rehabilitation measures must be undertaken.

Understanding first refusal clause R2.2 of the mandatory form Annex R - Immovable

Clause R2.2 of the mandatory form Annex R – Immovable, the so-called “first refusal", generates a lot of questions from brokers and consumers. In fact, the OACIQ Info Center receives many calls to this effect. Followings are a few clarifications to help understand how it works.

Share purchase for exclusive use of a dwelling

There is a method of acquiring real estate that all real estate brokers must acquaint themselves with. It is a process, sometimes called ''securitization'', by which a buyer acquires, on the one hand, a number of shares in a corporation (formerly called company) whose main asset is an immovable and, on the other hand, under a leasing agreement inseparable from the share acquisition agreement, the exclusive use of a given apartment in the immovable. The buyer then holds all rights of use to this apartment and may, in principle, occupy it or lease it. In this type of transaction, the acquisition of shares is therefore indivisible from the right to occupy an apartment specifically tied to the shares acquired.

The statement of registration: sometimes a condition for issuing a licence

Filing a statement of registration can sometimes be one of the conditions for issuance of a licence. The OACIQ must also comply with the Act respecting the legal publicity of enterprises, which is why it requires a copy of this statement to issue a licence.

Notaries and lawyers must act “in the course of their practice”... or be OACIQ licence holders

Note: This article refers to a judgement rendered between 2004 and 2012, at the time when the old Real Estate Brokerage Act (R.S.Q. c. C-73.1) and its regulations were in force. Therefore, the following text refers to the vocabulary applicable at that time. However, the following analysis remains relevant under the Real Estate Brokerage Act (R.S.Q. C-73.2) that came into force on May 1, 2010 and updated on July 13, 2018 after the adoption of Bill 141.

Abiding by the Act respecting Tourist Accommodation Establishments

In the course of their activities, some licence holders act as intermediaries for the short-term rental of cottages, houses or apartments. Considering their duty to verify, inform and advise, these brokers would be well-advised to know the ins and outs of the Act respecting Tourist Accommodation Establishments.

Cancellation of a previously accepted promise to purchase

Clause R2.3 of Annex R - Residential immovable allows the seller to accept a new promise to purchase conditional upon the cancellation of a previously accepted promise to purchase.