The Quebec Federation of Real Estate Boards (QFREB) says it is pleased with a report, tabled by Quebec Finance Minister Carlos Leitão, that asks if FSBO companies should be regulated more like brokerages, including mandatory training and licensing.

“In his report, the finance minister clearly recognizes that consumers who use these companies and who suffer a prejudice are not benefitting from all of the protections offered by real estate brokers,” says the QFREB in a news release. “The courts have also confirmed many times that the presence of a real estate broker in a transaction has the effect of reducing risks to the parties involved. The QFREB believes it is in the best interest of everyone that the law considers this new reality and establishes guidelines that facilitate an understanding of the issues for home buyers and sellers.”



The report also suggests that the province’s real estate regulator is too closely tied to the real estate industry and may require a more independent governance model.

The report is “intended as a tool for reflection with a view to examining the current legal framework governing real estate and mortgage brokerage, in order to continue to protect the Quebec public,” says the minister.

It asks if clients of FSBO companies, like clients of brokers, should be given access to an indemnity fund (in cases of fraud) and a liability insurance fund. It also questions if there should be a disciplinary committee for FSBO companies and if those working for these companies should “have basic training, take an exam and hold a licence”.

It says that current real estate legislation “does not precisely define what a brokerage is, and the question comes up regularly.” The industry is concerned that “a number of the acts performed by brokers under their mandate are now carried out, in the form of FSBO services, by persons who are not brokers. The industry sees this state of affairs as an encroachment on the exclusive scope of practice brokers.”

The report also asks if brokers should be allowed to offer advisory or assistance services for only part of the real estate transaction. For example, it says, “brokers could be remunerated to assist a buyer in drafting an offer to buy.”

It says, “To dispel any confusion, it is paramount for the public to be able to distinguish clearly between the level of services and protection it will obtain from FSBO services, in the case of sellers who wish to sell their property on their own, and from brokerage services, in the case of sellers who want someone else to look after their property.”
Leitão is also asking if the Organisme d’autoréglementation du courtage immobilier du Quebéc (OACIQ), the provincial regulator, is too cosy with organized real estate.

“Despite its mission, which is restricted to protecting the public, the OACIQ is perceived, especially by brokers themselves, as a body mandated to defend the business interests of brokers and agencies, with the result that its role in this respect melds with that of the real estate boards and their federation,” says the report.

The OACIQ has eight members of its board elected by licensed brokers and three members appointed by the government.

“Self-regulation has its advantages, but it also has its limits,” says the report. “This is especially true when the industry that is self-regulating is in competition with other industries.”

The minister’s report says, “To ensure that the public continues to trust in real estate brokerage’s regulatory framework, these perceptions must be changed. The OACIQ is unlikely to succeed in effecting such change on its own, since brokers will probably face even stronger competition in the years to come.”

It suggests one option would be “to substantially reduce, or even terminate, industry professionals’ control over the regulatory body.” It could also be run by a president and CEO appointed by the government, or the organization could be prohibited from “providing services to brokers and engaging in promotional advertising.”

The minister is asking the industry to comment on the report and submit proposals as the province’s Real Estate Brokerage Act is reviewed. The QFREB says it will submit a brief by the end of the summer.

  • EddieN

    Being a broker, I don’t particularly like FSBO sites but I hate dumb government regulations even more. How do they intend to educate and license FSBO sites? Anyone with a server and a domain name can offer the service, and they don’t have to be in Canada. What is the point of this tax wasting excercise? If there are dumb people chasing a penny in lieu of being protected and professionally served, then please let them go ahead. Let them lose all their money and their house. You cannot create, regulate or enforce intelligence. If you re cheap and stupid, then you deserve whats coming to you.

    • Brian Martindale

      Like Jeff Foxworthy says, “Ya can’t fix stupid!” However, the naïve can be fixed, but only after being badly burned. There is nothing so adamant on this earth about what is right and wrong as a wronged person who has been burned and who has learned the hard way about what pitfalls life throws up in our faces every day with a false sense of security attached thereto, with that false sense of security often offered up by a smooth-talking charismatic commissioned sales person in need of a quick cash fix. Unfortunately for the naïve, and fortunately for the cash-hungry commission-prowlers, there is a never-ending supply of too-good-to-be-true deals to go around, be they offered up by licensed registrants or otherwise, and without a doubt, the government benches and their associated bureaucracies are rife with the naïve.
      Old too soon; smart too late. Alas, I am now firmly entrenched in the latter category.

  • PED

    “It says that current real estate legislation “does not precisely define what a brokerage is, and the question comes up regularly.” The industry is concerned that “a number of the acts performed by brokers under their mandate are now carried out, in the form of FSBO services, by persons who are not brokers. The industry sees this state of affairs as an encroachment on the exclusive scope of practice brokers.”

    They most certainly do and so should be regulated.

    I also like the idea of reducing industry participants within the regulatory body.

  • It’s interesting what you can read into the suggestions offered by Quebec Finance Minister Carlos Leitão.

    Should real estate brokers be renumerated based on only handling part of a real estate transaction?

    Should the OACIQ regulatory body become more independent from the people they regulate?

    Could these two suggestions become a fracture point in the over-all responsibilities of brokers to professionally handle a real estate transaction from start to finish?