Are you looking to buy or sell a property? If you’re working with a real estate agent, you’ll need to sign a brokerage contract to formalize your relationship. This contract can be either exclusive or non-exclusive.
Here is all you need to know about the difference between the two.
What is the OACIQ brokerage contract?
In Quebec, when you hire a real estate broker to buy or sell a house or condominium, you must sign a brokerage contract. This agreement grants the broker the authority to act as an intermediary and assist you with a real estate transaction.
The brokerage contract is required to use a real estate broker’s services in the province. In must be completed with your involvement and cannot be altered by the broker in a way that would reduce their obligations to you or increase yours.
There are various types of brokerage contracts tailored to different transactions and needs. Developed by the Organisme d'autoréglementation du courtage immobilier du Québec (OACIQ) and approved by the Ministère des Finances, these contracts are designed to ensure professional standards and protect your interest.
What information does the brokerage contract include?
All brokerage contracts, whether for the purchase, sale or rental of a residential property, must contain key information, such as:
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Identification and contact information of the parties involved.
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The purpose and duration of the agreement.
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Identification of the property or its characteristics.
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Price and conditions (including exclusions, dates, etc.).
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Whether the property is subject to GST and QST.
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The rights and obligations of each party.
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The broker’s or agency’s responsibilities.
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The method and terms of compensation.
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Whether the contract is exclusive and irrevocable, if applicable.
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The options for the parties to pursue conciliation, mediation, or arbitration through OACIQ, in line with the Real Estate Brokerage Act.
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Relevant property information pertinent to the transaction.
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A 3-day right of withdrawal.
If you’re unsure about the clauses or terms in your contract, your real estate broker must provide clarification to ensure you understand everything. Don’t hesitate to ask for an explanation before you commit.
Different forms for different types of real estate
The OACIQ has created a range of forms to support you in your real estate project, no matter the type of property. Among these forms, there are specific brokerage contracts designed for each kind of real estate, including:
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Residential properties with fewer than 5 dwellings (exclusive or non-exclusive)
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Divided co-ownership (exclusive only)
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Undivided co-ownership (exclusive only)
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Mobile homes on leased land (exclusive only)
Each contract is customized to suit the particular characteristics of the property.
Exclusive vs. non-exclusive brokerage contracts: what's the difference?
When selling your home (or any property with fewer than five units), your real estate agent will present you with two contract options: exclusive and non-exclusive.
With an exclusive contract, your broker has the right to act as your sole agent during the sale process. This means they’re the only one allowed to sell your property, and no other real estate agents can approach you directly.
A non-exclusive contract, however, gives you the flexibility to work with another agent or even find a buyer yourself. If you decide to sign with another broker, you must inform your current agent, and you’re required to offer the property for the sale under the same terms and price.
Which contract should you choose? That depends on your preferences and circumstances. However, keep in mind that an exclusive contract may be more motivating for the broker, as they’re guaranteed a commission if they successfully sell your home.
The Brokerage contract - Sale
The brokerage contract is a crucial document when selling your property with a real estate broker in Quebec, ensuring your transaction complies with the Real Estate Brokerage Act. If you choose to work with a broker, you will need to use one of the following forms:
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Exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership.
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Non-exclusive brokerage contract – Sale – Chiefly residential immovable containing less than 5 dwellings excluding co-ownership.
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Exclusive brokerage contract – Divided co-ownership – Fraction of a chiefly residential immovable held in divided co-ownership.
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Exclusive brokerage contract – Undivided co-ownership – Share of a chiefly residential immovable held in undivided co-ownership.
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Exclusive brokerage contract – Sale – Mobile home situated on leased land.
No matter which form you sign, your agent must explain the details of the contract to you and ensure you understand it.
If you opt for an exclusive contract, the brokerage fee is due when you accept an offer to purchase and all conditions are met, except for the signing of the deed.
For a non-exclusive contract, the broker will receive compensation if the property sells during the term of the contract, and if the broker is the efficient cause of the sale. This means the broker is considered responsible if the buyer purchases the property after showing interest during the contract period.
Can I sell my property on my own even though I have an exclusive contract?
Yes, you can potentially sell your property on your own, even with an exclusive contract. The brokerage contract can be amended to allow you to do so without changing the exclusive nature of the agreement.
However, this permission is at the discretion of the broker and must be explicitly included in clause 11.1 of the contract.
The Brokerage Contract - Purchase
If you're a buyer looking to purchase a property through a real estate agent, you'll need to use the Exclusive Brokerage Contract - Purchase form, which, as the name suggests, is exclusively for that purpose.
This form must be used regardless of the type of property you're looking for. It includes clauses covering:
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The characteristics of the property you're seeking.
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The desired purchase price and conditions.
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The respective obligations of both the buyer and the broker.
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The broker's fee.
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The follow-up process to be carried out.
The contract clearly outlines the terms of your agreement and gives the agent the authority to approach and solicit properties that may not be listed on the market.
Additionally, if the seller of the property you're interested in is not represented by an agent, your broker will handle all the usual due diligence.
Is the brokerage contract mandatory for a purchase?
Yes, the brokerage contract is mandatory if you want to be represented by a real estate agent when buying a property. Without signing this form, the agent cannot advocate for your interests, as brokers are not allowed to represent clients who haven’t signed a brokerage contract.
If you don’t sign a brokerage contract, the seller's real estate agent cannot represent your interests because they are already working for the seller. However, the agent must still fulfill their duty of disclosure, ensuring that you are treated fairly and objectively informed about all relevant details of the transaction.
Start and end of the contract with your broker
Regardless of the form used, the brokerage contract becomes effective once both parties sign it. The real estate agent will then provide you with a duplicate of the contract. This duplicate isn’t just a photocopy; it’s a form that you’ll also need to sign.
If the contract was signed electronically, the version you receive is the original. Just like with the paper version, make sure to keep your copy in a safe place.
The brokerage contract expires 30 days after you sign it, unless you and your agent agree on a different timeline. When the contract expires, you have several options:
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Renew the contract
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Sign a new contract with another broker
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Choose not to renew the contract
If you decide to renew your contract, make sure to do so no later than the last day specified in the agreement. Otherwise, you’ll need to complete a new form.
Your right to terminate an exclusive brokerage contract
Regardless of the type of brokerage contract you sign, the law gives you a 3-day period from receiving the signed duplicate of the contract to cancel it. This is called the right of withdrawal.
Once this period has passed, your ability to terminate the contract, whether exclusive or not, depends on whether the contract is revocable. An irrevocable contract cannot be cancelled without mutual agreement with your broker. A revocable contract, however, can be terminated at any time.
Generally, exercising your right to cancel doesn’t cost you anything, but there is one exception. If a sale occurs within 180 days of the contract's expiration, and the buyer was interested in the property during the term of the exclusive contract, the broker may claim compensation. This does not apply if you’ve signed a new brokerage contract with another agent in good faith.
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