RECOURSE AGAINST THE REAL ESTATE BROKER

Responsibility of the Real Estate Broker and the legal guaranty of quality

The real estate brokerage agreement is a service contract that obliges the broker to respect certain rights and obligations.

In essence, the broker has a duty to advise the client as well as a duty of loyalty and fidelity. The real estate broker has an obligation to verify and validate the information provided to him by his/her client to ensure that the information is exact and justified as the real estate broker cannot simply rely on the information provided by his/her client.

The broker also has the obligation of diligence and prudence accompanied for all real estate brokers. Thus, the real estate broker’s obligation is an obligation of moyen or reasonableness comparing it to a diligent and prudent real estate broker placed in the same circumstances rather than an obligation of result.

These obligations are stipulated by the Civil Code of Quebec as well as by the ethical rules provided by their professional order under OACIQ (Organisme d’autoréglementation du courtage immobilier du Québec).

Under these rules and obligations, the broker has to act in the best interests of the client and avoid putting himself/herself in a situation of a conflict of interest. The broker must also inform his/her client of any and all factors that may affect the object of the transaction and inform his client of the rights and obligations that convey when documents are to be signed, the nature of the documents and provide his/her client the necessary time to reflect on the consequences of the documents that are to be signed.

Similarly, the real estate broker may be content on receipt of the documents related to the immovable and simply transmit them to the notary subsequent to the conclusion of a promise to purchase. The real estate broker must be knowledgeable about the documents regarding the immovable including any and all limitation such as a mortgage/hypotheque, liens, servitudes, rights of passage and access etc. to ensure that the seller makes all proper declarations regarding the immovable.

It is also incumbent on the real estate broker to recommend to his client to have recourse to an expert recognized by the law prior to the purchase of the property.

If the real estate broker has a “double mandate”, meaning he/she represents both the buyer and seller, the real estate broker must divulge his status without delay to the client.

In principle, the real estate broker is not submitted to the legal guaranty of quality. This obligation is incumbent upon the seller of the property.

However, it is the obligation of the real estate broker to identify apparent defects and not latent defects. The real estate broker must verify the MLS or descriptive listing for the sale of the property to ensure that the information is valid, exact and correct regarding the present situation of the immovable.

The blind confidence in your real estate broker does not excuse the buyer or seller’s responsibility to act with prudence and diligence and inform himself/herself regarding the collateral obligation to obtain factual information but omits to divulge or transmit said factual information to the real estate broker.

Consequently, you cannot reproach to the real estate broker his fault if you have omitted your own obligation to act in good faith and your collateral duty of information.

In order to hold the liability and responsibility of real estate broker, one must prove that there is a causal link between the prejudice suffered and the damages ensued to show the causal link between the fault and the damages.

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The above noted text should not be construed as providing legal advice or a statement of your claim. The process highlighted above are merely parameters and barometers and do not constitute any warranties and guaranties with regards to your file at hand. We strongly recommend that you seek legal advice with a licensed attorney from the Barreau du Quebec or a notary at the Chambre des Notaires. Each case must be seen and analysed on its merits as the legal process may be complex and cumbersome.