What will happen to brokerage contracts in progress if a broker’s licence is not maintained on April 30 or suspended?
The OACIQ regulations provide a mechanism to be followed for brokerage contracts in progress when a broker fails to maintain his licence or update his information.
If the broker is acting for an agency and notifies his agency executive officer, before April 30, of his intention not to maintain his licence
The agency will immediately notify in writing clients that their broker will cease his activities on April 30, or the broker may do so himself by giving them the option to:
1) remain contractually bound to the agency which will appoint another broker to replace him; or
2) terminate the brokerage contract.
In this regard, the agency or broker can use the Notice D that can be found in this article. In this case, the notice must be adapted to include the term “ceased” to carry on his activities.
Failure to receive a notice of termination from clients, the broker’s brokerage contracts will continue with the agency, represented by the new appointed broker.
If the broker is acting for an agency, but does not notify his agency executive officer that he will not maintain his licence on April 30
Brokerage contracts will continue to be valid after April 30. However, the agency shall notify clients immediately and in writing that their broker’s licence is revoked and give them the option to:
1) remain contractually bound to the agency which will appoint another broker to replace him; or
2) terminate the brokerage contract.
IIn this regard, the agency or broker can use the Notice D that can be found in this article on synbad.com. In this case, the notice must be adapted to include the term “ceased” to carry on his activities.
Failure to receive a notice of termination from clients, brokerage contracts of the broker whose licence is revoked will continue with the agency, represented by the new appointed broker.
If the broker is acting on his own account and does not maintain his licence on April 30
The broker acting on his own account may notify his clients immediately in writing that he will cease or ceased his activities on April 30. This broker’s brokerage contracts shall be deemed to have been terminated as of the date his licence is revoked.
In this regard, he can use the Notice P that can be found in this article on synbad.com. In this case, the notice must be adapted depending on his situation.
If the broker acting on behalf of an agency maintains his licence on April 30, but his licence is suspended, including when he fails to update his information
Brokerage contracts will continue to be valid. However, the agency shall notify clients immediately and in writing that their broker’s licence is suspended and give them the option to:
1) remain contractually bound to the agency which will appoint another broker to replace him; or
2) terminate the brokerage contract.
In this regard, the agency or broker can use the Notice D that can be found in this article on synbad.com. In this case, the notice must be adapted depending on their situation.
Failure to receive a notice of termination from clients, brokerage contracts of the broker whose licence is suspended will continue with the agency, represented by the new appointed broker.
If the broker is acting on his own account maintains his licence on April 30, but his licence is suspended, including when he fails to update his information
The broker maintains his licence on April 30, but his licence is suspended, including when he fails to update his information.
This broker's brokerage contracts will be deemed terminated as of his licence suspension date. The broker must immediately notify clients in writing.
In this regard, he can use the Notice P that can be found in this article on synbad.com. In this case, the notice must be adapted depending on his situation.
To learn more, read:
- A suspended or revoked licence bars the holder from practicing
- Are you intending to cease practising the profession? This is how you can leave the profession properly
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Note:
The agency or broker’s obligations to notify clients in the situations mentioned above are provided in the brokerage contract forms. Section 24 of the Regulation respecting brokerage requirements also states that “An agency that has entered into a brokerage contract must without delay notify the contracting party in writing of any change in the identity of the broker acting for the agency with the contracting party”.
