Government Services Committee

committees_standingcommittees_govservices_ga49_proposedbill-realestatetradingact2019

Newfoundland and Labrador — Committees

EXPLANATORY NOTES This Bill would repeal and replace the Real Estate Trading Act.

The Bill would  allow the minister to appoint the Superintendent of Real Estate Brokers and Salespersons and the Deputy Superin- tendent of Real Estate Brokers and Salespersons;  allow the Superintendent o f Real Estate Brokers and Salespersons to issue a person al real estate corporation li- cence;  require real estate brokers and salespersons to obtain er- rors and omissions liability insurance;  authorize the Superintendent of Real Estate Brokers and Salespersons to establish a code of conduct for real estate brokers and salespersons;  authorize the Superintendent of Real Estate Brokers and Salespersons to prescribe continuing education require- ments for real estate brokers and salespersons;  require that a real estate broker or salesperson disclose re- ferral fees;  establish the Real Estate Recovery Fund;  allow unclaimed money held in a real estate broker's trust account for more than 2 years to be paid to the Real Estate Recovery Fund;  prohibit a person who is licensed as a real estate broker or salesperson under the Act and either registered as a mort- gage broker under the Mortgage Brokers Act or employed or contracted by a mortgage broker registered under the Mortgage Brokers Act from providing both services to a person in relation to a trade in real estate; March 26, 2019

2019 Real Estate Trading Act, 2019 Bil l 2  authorize the Superintendent of Real Estate Brokers and Salespersons to impose administrative penalties;  authorize the Superintendent of Real Estate Brokers and Salespersons to issue orders; and  increase the penalties for offences.

2019 Real Estate Trading Act, 2019 Bil l 3 A BILL

AN ACT RESPECTING THE REGULATION OF REAL ESTATE TRADING IN THE PROVINCE Analysis 1.

Short title 2.

Interpretation 3. Non-application of Act 4. Superintendent and deputy superintendent 5. Powers and duties of super- intendent 6. Types of licences 7. Application for licence 8. Designated representative 9. Personal real estate corpora- tion licence 10. Personal real estate corpora- tion 11. Duties of licensees 12. Notice of changes 13. Certificate 14. Temporary broker licence 15. Variation, suspension or cancellation of licence 16. Licence required 17. Records 18. Agreements 19. Disclosure re: purchase of real estate for own purpose 20. Referral 21. Payment of commission 22. Action for commission 23.

Trade of business 24. Bond 25. Fund 26. Trust account 27. Unclaimed trust money 28. Prohibition 29. Permitted salespersons 30. Trading for other brokers prohibited 31. Promises to resell prohibited 32. Breaking of contract prohib- ited 33. Advertising 34. Carrying on business as an individual 35. Administrative penalty 36. Order of superintendent 37. Inspectors 38. Powers of inspectors 39. Order of inspector 40. Contravention of Act sus- pected 41. Telewarrant 42. Protection from liability 43. Appeal 44. Notice 45. Offences 46. Limitation period 47. Regulations 48. Fees and forms 49. Transitional 50.

SNL2009 cC-31.1 Amdt. 51. CNLR 1006/96 Amdt. 52. Repeal 53. RSNL1990 cR-2 Rep. 54. Commencement

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows: 1. This Act may be cited as the Real Estate Trading Act, 2019. 2.

(1) In this Act (a) "affiliated person" means

Short title

Interpretation

2019 Real Estate Trading Act, 2019 Bil l 4 (

i) the spouse or cohabiting partner of a controlling indi- vidual, (ii) a child of a controlling individual, (iii) a corporation, all of the shares of which are beneficial ly owned by one or more of a controlling individual and the other individuals referred to in subparagraphs (

i) and (ii), or (iv) a trust, all of the beneficiaries of which are one or mor e of a controlling individual and the other individuals re- ferred to in subparagraphs (

i) and (ii); (b) "broker" means a person who holds a licence issued under paragraph 6(1)(a); (c) "broker licence" means a licence issued under paragraph 6(1)(a); (d) "business" means an undertaking carried on for profit or g ain or an interest in an undertaking; (e) "cohabiting partner" means either of 2 persons who are co- habiting and (

i) have cohabited continuously in a conjugal relationship outside marriage for not less than one year, or (ii) have entered into a written agreement in respect of their cohabitation, in which they agree on their respective rights and obligations during cohabitation, upon ceasing to cohabit or upon the death of either of them; (f) "controlling individual" means the individual who is the s ole voting shareholder of a personal real estate corporation; (g) "deputy superintendent" means a person appointed under subsection 4(2); (h) "designated representative" means a person designated in accordance with subsection 8(1);

2019 Real Estate Trading Act, 2019 Bil l 5 (i) "employ" in relation to a broker, includes a person who is contracted by the broker to trade on its behalf; (j) "family member" includes a spouse, cohabiting partner, par - ent, child, brother, sister, grandparent and grandchild; (k) "former Act" means the Real Estate Trading Act; (l) "fund" means the Real Estat e Recovery Fund established under

section 25; (m) "licence" means a licence issued under

section 6; (n) "licensee" means a person who holds a licence issued under

section 6; (o) "lease" means an agreement by which one person conveys real estate to another person f or a specified term and for a specified amount of money; (p) "person" includes a partner ship, a corporation and the hei rs, executors, administrators or other legal representatives of a person; (q) "personal real estate corpor ation" means a person who hold s a licence issued under paragraph 6(1)(e); (r) "personal real estate corp oration licence" means a licence issued under paragraph 6(1)(e); (s) "real estate" includes free hold and leasehold property and chattels real and a business, whether with or without the premises, fixtures, stock-in-trade, goods or chattels used in connection with the operation of the business; (t) "referral fee" means any form of compensation, direct or indirect, paid for the referral of a person to or from a licen- see; (u) "restricted broker" means a person who holds a licence is- sued under paragraph 6(1)(c);

2019 Real Estate Trading Act, 2019 Bil l 6 (v) "restricted broker licence" means a licence issued under paragraph 6(1)(c); (w) "restricted salesperson" m eans a person who holds a licenc e issued under paragraph 6(1)(d); (x) "restricted salesperson licence" means a licence issued un der paragraph 6(1)(d); (y) "salesperson" means a person who holds a licence issued under paragraph 6(1)(b); (z) "salesperson licence" mean s a licence issued under para- graph 6(1)(b); (aa) "spouse" means eith er of 2 persons who (

i) are married to each other, (ii) are married to each other by a marriage that is voidable and has not been voided by a judgment of nullity, or (iii) have gone through a form of a marriage with each other, in good faith, that is void and are cohabiting or have co- habited with each other within the preceding year; (bb) "superintendent" means the Superintendent of Real Estate Brokers and Salespersons appointed under subsection 4(1); and (cc) "trade" or "trading" includes (

i) a disposition or acquisition of or transaction in real es- tate by sale, purchase, agreement for sale, exchange, op- tion, lease or otherwise, (ii) an offer or attempt to list real estate for the purpose o f a disposition, acquisition or transaction, and (iii)

an act, advertisement, conduct or negotiation, directly or indirectly, in furtherance of a disposition, acquisition, transaction, offer or attempt.

2019 Real Estate Trading Act, 2019 Bil l 7

(2) A reference in this Act to a corporation does not include a personal real estate corporation.

(3) Unless the context indicates otherwise, a reference in thi s Act to (

a) a broker includes a restricted broker; (

b) a broker licence includes a restricted broker licence; (

c) a salesperson includes a restricted salesperson; and (

d) a salesperson licence includes a restricted salesperson li - cence. 3. This Act does not apply to (

a) an assignee, custodian, li quidator, receiver, trustee or o ther person trading under

an Act of the province or of Canada; (

b) a person trading under an order of a court; (

c) an administrator of an estate trading on behalf of the est ate; (

d) an executor of an estate tra ding under the terms of a will; (

e) a trustee trading under the terms of a deed of trust; (

f) a bank, credit union, loan, trust or insurance company tra d- ing in the ordinary course of its business; (

g) a member of the Law Society of Newfoundland and Labra- dor trading in the course of his or her practice; (

h) a person who completes not more than 3 trades in a calenda r year relating to real estate owned by him or her or in which he or she has a substantial interest; (

i) a p e r s o n w h o r e n t s p r o p e r t y o w n e d b y h i m o r h e r o r i n which he or she has a substantial interest; (

j) a person in the business of property management who ar- ranges a lease agreement; or Non-application of Act

2019 Real Estate Trading Act, 2019 Bil l 8 (

k) a person or class of persons exempted from the application of this Act by the regulations. 4.

(1) The minister shall appoint a Superintendent of Real Estate Brokers and Salespersons.

(2) The minister may appoint a Deputy Superintendent of Real Estate Brokers and Salespersons who shall perform the duties and exer- cise the powers of the superintendent where (

a) the superintendent is absent or unable to act; (

b) the superintendent considers it necessary to delegate his or her authority; or (

c) the office of the sup erintendent is vacant. 5.

(1) The superintendent may (

a) establish a code of conduct; (

b) prescribe continuing education requirements; (

c) direct disbursement of a deposit from a trust account in a c- cordance with the regulations; and (

d) perform the other duties and exercise the powers conferred by this Act.

(2) For the purpose of carrying out his or her powers and duti es under this Act, the superintendent has the powers, privileges a nd im- munities that are or may be conferred on a commissioner under t he Public Inquiries Act, 2006. 6.

(1) The superintendent may issue the following licences: (

a) a broker licence which author izes the holder of the licence to trade; (

b) a salesperson licence which authorizes the holder of the l i- cence to act as a salesperson of a broker and trade on behalf of that broker; Superintendent and deputy superinten- dent Powers and duties of superintendent Types of licences

2019 Real Estate Trading Act, 2019 Bil l 9 (

c) a restricted broker licence which authorizes the holder of the licence to trade on his or her behalf; (

d) a restricted salesperson licence which authorizes the hold er of the licence to act as a salesperson of a restricted broker and trade on behalf of that broker; and (

e) a personal real estate corp oration licence which authorize s the holder of the licence to act as a salesperson of a broker and trade on behalf of that broker.

(2) The superintendent may issue a licence or refuse to issue a licence.

(3) Where the superintendent r efuses to issue a licence, the s u- perintendent shall, upon the request of the applicant, provide written reasons for refusing to issue the licence.

(4) A licence issued under paragraph (1)(b), (

d) or (

e) shall state the name of the broker with whom the salesperson is employed.

(5) The termination of the employment of a salesperson with a broker shall be (

a) a termination of his or he r salesperson licence; and (

b) where the salesperson is a controlling individual, a termi na- tion of his or her personal real estate corporation licence.

(6) The superintendent may impose terms and conditions on a licence.

(7) A licence is not trans ferrable or assignable. 7.

(1) A person applying for a licence under paragraphs 6(1)(a), (b), (

c) or (

d) shall submit to the superintendent (

a) an application in the form set by the superintendent; (

b) the fee set by the minister; (

c) a certificate of conduct f rom the Royal Newfoundland Con- stabulary or a certified crim inal records check from the Application for licence

2019 Real Estate Trading Act, 2019 Bil l 10 Royal Canadian Mounted Police satisfactory to the superin- tendent; (

d) a bond to the Crown in the amount prescribed in the regula - tions; (

e) payment to the fund in the amount set by the minister; (

f) proof of errors and omissions liability insurance in the amount prescribed in the regulations; and (

g) other information or documentation prescribed in the regul a- tions.

(2) Where the applicant is (

a) a partnership, the applicant shall provide a current certi ficate of conduct from the Royal Newfoundland Constabulary or a certified criminal records check from the Royal Canadian Mounted Police for each partner in the partnership; or (

b) a corporation, the applicant shall provide a current certi ficate of conduct from the Royal Newfoundland Constabulary or a certified criminal records check from the Royal Canadian Mounted Police for the designated representative.

(3) In addition to the requirements in subsections (1) and (2) , a person applying for a licence under paragraph 6(1)(

a) or (

b) sh all pro- vide proof, satisfactory to the superintendent, of the successf ul comple- tion of the prescribed examinations.

(4) In addition to the requirements in subsections (1) and (2) , a person applying for a licence under paragraph 6(1)(

b) or (

d) sh all pro- vide a statement made by or on behalf of the broker for whom th e ap- plicant proposes to act as salesperson, (

a) recommending the applicant as an appropriate person to re- ceive a salesperson licence; and (

b) declaring that, where the ap plicant is granted a licence, the applicant shall act as a salesperson employed by and repre- senting the broker.

2019 Real Estate Trading Act, 2019 Bil l 11

(5) Where the superintendent requires further information in order to assess the application, the superintendent shall reque st further information from the applicant and the applicant shall provide that in- formation in the time set by the superintendent. 8.

(1) Where a corporation or partnership applies for a broker li - cence, it shall designate an individual to act on its behalf fo r the pur- poses of the licence.

(2) The designated representative shall be an individual who (

a) is a director of the corpor ation or a partner in the partn er- ship; (

b) is active in the day to day operations of the corporation or partnership and knowledgeable of the business of the corpo- ration or partnership; (

c) holds a valid salesperson licence; and (

d) successfully completed the p rescribed examinations for the corporation or partnership to obtain its broker licence.

(3) A broker licence issued to a corporation or partnership sh all be in the name of the corporation or partnership and shall stat e on the licence the name of the designated representative.

(4) Notwithstanding subsections (1) to (3), a corporation or partnership may designate anothe r individual who satisfies the re- quirements in paragraphs (2)(b), (

c) and (

d) who, in the absenc e or in- capacity of the designated repre sentative, shall act as the des ignated representative.

(5) Where a corporation or partnership designates a person un- der subsection (4), it shall provide the name of that person to the super- intendent.

(6) Where a designated representative dies, becomes incapaci- tated or terminates his or her employment with a broker and the broker does not have an alternate designated representative, the super intendent may Designated repre- sentative

2019 Real Estate Trading Act, 2019 Bil l 12 (

a) allow the broker to appoint a designated representative th at does not meet the requirements in subsection (2) or (4) for a term of not more than 6 months; and (

b) allow the broker to carry on business during that time. 9.

(1) A person applying for a personal real estate corporation l i- cence shall submit to the superintendent (

a) an application in the form set by the superintendent; (

b) the fee set by the minister; (

c) proof satisfactory to the superintendent that (

i) it is incorporated under the Corporations Act, (ii) all the voting shares of the corporation are legally and beneficially owned by a single individual, (iii) the sole director of the corporation is the controlling individual, (iv) all non-voting shares of the corporation are legally and beneficially owned by the controlling individual or an affiliated person of the controlling individual, and (

v) the legal name of the per sonal real estate corporation includes the words "personal real estate corporation"; (

d) an application for a salesperson licence for the controlli ng individual or where the controlling individual already holds a salesperson licence, a request to amend the controlling in- dividual's salesperson licence to comply with subsection (4); (

e) proof satisfactory to the superintendent that the controll ing individual held a salesperson licence for at least 2 years dur- ing the 5 years preceding the application for the personal real estate corporation licence; (

f) the written consent of the broker for which the controllin g individual proposes to act as a salesperson; Personal real estate corporation licence

2019 Real Estate Trading Act, 2019 Bil l 13 (

g) a bond to the Crown in the amount prescribed in the regula - tions; (

h) payment to the fund in the amount set by the minister; (

i) proof of errors and omissions liability insurance in the amount prescribed in the regulations; and (

j) other information or documentation prescribed in the regul a- tions.

(2) A personal real estat e corporation licence shall (

a) indicate the name of the controlling individual; and (

b) be subject to any terms and conditions that apply to the salesperson licence of the controlling individual.

(3) A personal real estate corporation may be licensed only in relation to the same broker as the controlling individual and s hall be employed by that broker to trade on behalf of that broker.

(4) The licence of a controlling individual shall indicate (

a) the name of the personal r eal estate corporation by which the controlling individual is employed to trade on its behalf; and (

b) the name of the broker of the personal real estate corpora - tion.

(5) Where the superintendent requires further information in order to assess an application, the superintendent shall reques t further information from the applicant and the applicant shall provide that in- formation in the time period set by the superintendent. 10.

(1) A controlling individual may be employed by a personal rea l estate corporation to trade on behalf of a broker, and may rece ive re- muneration in relation to a trade from a personal real estate corporation, where (

a) the controlling individual and the personal real estate co rpo- ration have each obtained a licence under this Act; Personal real estate corporation

2019 Real Estate Trading Act, 2019 Bil l 14 (

b) the trades provided by the personal real estate corporatio n are provided only by the controlling individual; (

c) any other persons employed by the personal real estate cor - poration are not licensees; (

d) the personal real estate corporation does not conduct any business other than the trading of real estate and ancillary services directly associated with the trading of real estate; and (

e) the controlling individual and the personal real estate co rpo- ration comply with the requirements in this Act, the regula- tions and the code of conduct.

(2) A controlling individual employed by a personal real estat e corporation in accordance with par agraph (1)(

b) is considered, for the purposes of this Act and the regulations, to be employed by the broker of the personal real estate corporation, but shall not be emplo yed by that broker or any other broker to trade on behalf of that broker.

(3) The fact that a controlling individual is employed by a pe r- sonal real estate corporation to trade on behalf of a broker do es not affect (

a) the controlling individual' s liability with respect to trades; (

b) the controlling individual's obligations and responsibilit ies to a person who has employed the controlling individual to trade on his or her behalf; or (

c) the application of this Act, the regulations and the code of conduct to the controlling individual.

(4) The superintendent may (

a) amend the licence of a personal real estate corporation to reflect the terms and conditions applicable to the salesperson licence of the controlling individual; and (

b) amend the licence of the controlling individual to reflect the terms and conditions applicable to the personal real estate corporation licence.

2019 Real Estate Trading Act, 2019 Bil l 15

(5) Where a personal real estate corporation ceases to meet th e criteria set out in subparagraphs 9(1)(c)(

i) to (v), its person al real estate corporation licence is terminated.

(6) Where the salesperson licence of a controlling individual is suspended or cancelled, the controlling individual's personal r eal estate corporation licence is suspended or cancelled as of the time at w hi c h the controlling individual's licence is suspended or cancelled.

(7) Where the licence of a pers onal real estate corporation is (

a) suspended or cancelled, or (

b) terminated under subsection (5) or 6(5) the salesperson licence of the controlling individual is suspen ded or cancelled or terminated as of the time at which the personal re al estate corporation's licence is suspended, cancelled or terminated. 11. A licensee shall (

a) pay the annual fee set by the minister; (

b) file an annual report in the form set by the superintenden t; (

c) comply with this Act, the regulations, the code of conduct and the terms and conditions of the licence issued under this Act; (

d) maintain errors and omissions liability insurance in the amount prescribed in the regulations; (

e) pay the amount set by the minister to the fund when requir ed by the superintendent; (

f) complete the continuing education requirements set by the superintendent; and (

g) provide information or documentation to the superintendent where requested. 12. A licensee shall notify the superintendent in writing of the f ol- lowing changes within 10 days of the change: Duties of licensees Notice of changes

2019 Real Estate Trading Act, 2019 Bil l 16 (

a) a change in the address for service; (

b) a change in email address; (

c) a change in the partners wh ere the licensee is a partnersh ip or a change in the directors where the licensee is a corpora- tion; (

d) a change in the account number, branch or location of the licensee's trust account; (

e) the commencement and termination of employment of a salesperson; (

f) a change in any information submitted in the licensee's ap - plication for a licence; and (

g) a change in any informati on in the most recent annual repo rt submitted by the licensee. 13.

(1) Where required by the superintendent, a broker shall file a certificate stating the broker's financial position.

(2) A certificate referred to in subsection (1) shall be signe d by (

a) the broker or where the broker is (

i) a partnership, by the partners; or (ii) a corporation, by the de signated representative; and (

b) an accountant approved by the superintendent. 14.

(1) Notwithstanding

section 6, where a broker who is an indi- vidual dies or becomes incapacitated, the superintendent may is sue a temporary broker licence to the executor or administrator of th e de- ceased broker's estate or the incapacitated broker's power of attorney.

(2) A licence issued under subsection (1) shall be for a term of not more than 6 months and shall authorize the holder of the li cence to carry on business of a broker only in relation to trading on behalf of the deceased or incapacitated broker. Certificate Temporary broker licence

2019 Real Estate Trading Act, 2019 Bil l 17

(3) Where a temporary broker licence is issued under subsectio n (1), salespersons of the deceased or incapacitated broker at th e time of the death or incapacitation of the broker shall be considered t o be li- censed as salespersons of the person to whom the temporary lice nce was issued for the term of the temporary licence. 15. The superintendent may vary, suspend or cancel a licence where (

a) the superintendent is satisfied that the licensee contrave ned (

i) this Act or the regulations, (ii) a condition of the licence, (iii) an order issued under this Act, or (iv) the code of conduct; (

b) the superintendent is satisfied that the licensee made one or more false or misleading statem ents in the application for a licence, the information provided in support of the applica- tion or an annual report; (

c) the licensee failed t o file an annual report; (

d) the licensee failed to pay the annual fee; (

e) the licensee did not satisfy the continuing education re- quirements; or (

f) the superintendent is satisfied that it is in the public i nterest to vary, suspend or cancel the licence. 16. A person shall not (

a) trade or hold himself or herself out as a broker, unless h e or she holds a valid licence issued under paragraph 6(1)(

a) or (c); or (

b) trade or hold himself or herself out as a salesperson, unl ess he or she holds a valid licence issued under paragraph 6(1)(b), (

d) or (e). Variation, suspen- sion or cancellation of licence Licence required

2019 Real Estate Trading Act, 2019 Bil l 18 17.

(1) A broker shall keep a record of the following information relating to a trade: (

a) the nature of the trade; (

b) a description of the real e state involved in the trade; (

c) the consideration for the trade; (

d) the names of the parties to the trade; (

e) the amount of the deposit r eceived and the information relat- ing to the disbursement of the deposit; (

f) the amount of the commission or other remuneration; (

g) the name of the person paying the commission; and (

h) other information prescribed in the regulations.

(2) A broker shall maintain a t rust account record in which th e broker shall enter the full deta ils of the receipt and disburse ment of trust money. 18.

(1) Immediately after the execution of an agreement to list re al estate for sale, exchange or lease with a broker, the broker or the sales- person shall deliver to the signatories of the agreement a copy o f t he agreement.

(2) An agreement referred to in subsection (1) is not valid where (

a) it does not state a specific date on which the agreement ends; (

b) it states more than one dat e on which the agreement ends; or (

c) a copy of the agreement is n ot delivered by the broker or the broker's salesperson to the pe rson who signed the agreement immediately after its execution.

(3) Where a broker or salesperson has secured an acceptance of an offer to sell, purchase, exchange or lease real estate, the broker or the broker's salesperson shall require each of the parties to s ign copies of the agreement, and the broker or salesperson shall retain on e signed Records Agreements

2019 Real Estate Trading Act, 2019 Bil l 19 copy and shall immediately deliver one signed copy to the signa tories involved in the trade. 19.

(1) Where a broker intends to, either directly or indirectly, (

a) purchase; (

b) make an offer to purchase; or (

c) acquire for himself, herself or a family member an interest in real est ate listed with the broker or salesperson for sale, he or she shall clearl y disclose in writing to the person selling the real estate that (

d) he or she is purchasing the real estate or acquiring an in terest in the real estate for himself, herself or a family member; (

e) he or she is about to negotiate, is negotiating or has neg oti- ated for the resale or other disposition of the real estate and provide details regarding the negotiation; and (

f) where he or she intends to resell the real estate for his or her own benefit or the benefit of a family member, that he or she intends to resell the real estate for his or her own benefit or the benefit of a family member.

(2) Where a broker or salesperson does not provide disclosure to a seller in accordance with subsection (1), the seller is not l iable to pay commission to the broker or salesperson. 20.

(1) Where, in the course of providing services, a licensee ref ers a person to a service provider or another licensee and the lice nsee knows that he or she may be entitled to receive a referral fee, remunera- tion or benefit from that service provider or other licensee fo r making the referral, the licensee shall disclose in writing to the per son that the licensee referred that (

a) he or she forwarded the person’s name and contact informa- tion to the service provider or other licensee; Disclosure re: purchase of real estate for own purpose Referral

2019 Real Estate Trading Act, 2019 Bil l 20 (

b) he or she may be entitled to receive a referral fee, remun era- tion or benefit from the service provider or other licensee for making the referral; and (

c) the details of the referral fee.

(2) A licensee shall retain a copy of the disclosure referred to in subsection (1). 21.

(1) Commission or other remuneration payable to a broker in respect of a trade shall be the amount agreed upon by the parti es or a percentage of the sale price or rental.

(2) Where an agreement has not been entered into regarding the amount of commission, the rate of the commission or the amount of remuneration payable to a broker shall be that generally prevai ling in the community where the real estate is located.

(3) Notwithstanding subsections (1) and (2), the Lieutenant- Governor in Council may make regulations prescribing or limitin g the amount of commission, the rate of commission or other remunerat ion charged or collected by brokers.

(4) A broker or salesperson shall not request or enter into an agreement for the payment of c ommission or other remuneration b ased on the difference between the pr ice at which the real estate is listed for sale and the actual sale price of the real estate.

(5) Where the payment of commission or other remuneration is based on the difference at which real estate is listed for sale and the actual sale price of the real est ate, the broker or salesperson is not enti- tled to the commission or remuneration. 22. An action shall not be brought for commission or remuneration for services relating to a trade unless (

a) at the time the services wer e rendered the person bringing the action was licensed under this Act or exempted from li- censing under this Act; (

b) the broker or the broker's salesperson entered into a writ ten agreement with Payment of com- mission Action for commis- sion

2019 Real Estate Trading Act, 2019 Bil l 21 (

i) the person to be charged the commission, or (ii) a person authorized to sign the agreement on that per- son's behalf; (

c) the broker or the broker's salesperson obtained a written of- fer that is accepted; or (

d) the broker having been authorized in writing to list the p rop- erty (

i) shows the property to the purchaser, or (ii) introduces the purchaser to the seller for the purpose of discussing the proposed sale, purchase, exchange or lease. 23.

(1) Where a trade of a business is negotiated by a broker or t he broker's salesperson, the pers on negotiating the trade shall, b efore an agreement of purchase and sale i s signed by the parties, delive r to the person acquiring the business, (

a) a profit and loss statement or a statement showing the rev e- nue and expenditures of the business, during the preceding 12 months or since the acquisition of the business by the person selling the business; (

b) a statement of the assets and liabilities of the business; and (

c) a statement containing a list of fixtures, goods, chattels , rights and other assets relating to or connected with the business that are not included in the trade.

(2) A statement referred to in subsection (1) shall be signed by the person selling the business or a person authorized to act o n that person's behalf.

(3) A person acquiring a business may waive the requirements in paragraphs (1)(

a) and (

b) where (

a) the broker or a salesperson of that broker delivers to the per- son acquiring the business an affidavit of the person selling the business Trade of business

2019 Real Estate Trading Act, 2019 Bil l 22 (

i) setting out the terms and conditions under which the person selling the business holds possession of the premises in which the business is being carried on, (ii) setting out the terms and conditions of a sublease, where the person selling the business has sublet a part of the premises in which the business is being carried on, (iii) setting out the liabilities of the business, and (iv) stating that (

A) he or she allowed the person acquiring the business to inspect the books of account of the business, or (

B) there are no books of account of the business; and (

b) the person acquiring the business (

i) signs a statement that he or she received and read the affidavit of the person selling the business, and (ii) delivers that statement to the broker or the broker's salesperson.

(4) Where a statement referred to in paragraph (1)(

c) is not d e- livered to the person acquiring the business, the fixtures, goods, chattels and rights and other assets relating to or connected with the b usiness shall be considered to be included in the transaction. 24.

(1) A bond shall continue in fo rce for a period of 2 years aft er the licence to which it relates ends or is cancelled.

(2) A bond given under this Act shall be forfeited and the amount of the bond shall be recoverable from the person bound b y it as a debt due the Crown, where (

a) a conviction of an offence under this Act or of an offence involving fraud, theft, or conspiracy to commit an offence involving fraud or theft under the Criminal Code ha s be e n made by a court; Bond

2019 Real Estate Trading Act, 2019 Bil l 23 (

b) a civil judgment arising out of a trade in real estate has been made; or (

c) a winding-up or receiving o rder has been made under the Bankruptcy Act (Canada) or the Winding Up Act (Canada), against the person in respect of whose conduct the bond was con di- tioned and that conviction, judgment or order has become final.

(3) The superintendent shall assign the proceeds of a bond for - feited under subsection (2) to the Supreme Court.

(4) The proceeds shall be distributed out of the Supreme Court to a person who has (

a) become a judgment creditor of the broker or salesperson in respect of a claim arising out of a trade; or (

b) otherwise proved his or her claim to the satisfaction of t he court in respect of that claim.

(5) Where the Crown becomes a creditor of a person under this Act, the debt may be recovered by action or other proceeding in a court as a debt due the Crown.

(6) Where a bond has been forfeited under subsection (2), the balance of the proceeds remaining, less the expenses of the Sup reme Court, shall be repaid out of the Supreme Court to the bonding com- pany at the end of 2 years following the payment to the Crown o f the proceeds of the bond. 25.

(1) The minister shall establish an assurance fund to be known as the Real Estate Recovery Fund for the purpose of paying in whole or in

part claims arising against a licensee relating to money hel d in trust by a licensee who (

a) has committed fraud; (

b) has committed a breach of trust; (

c) fails to disburse or account for money held in a trust ac- count; or Fund

2019 Real Estate Trading Act, 2019 Bil l 24 (

d) declares bankruptcy.

(2) The fund shall consist of money paid into it by licensees in accordance with the regulations and interest, dividends and oth er re- turns earned upon the investment of money in the fund.

(3) The minister shall direct the superintendent to be respons ible for the financial management and administration of and disburse ment of payments from the fund in accordance with the regulations.

(4) The fund shall be held in trust for those persons, who, in accordance with the regulations, are entitled to receive paymen ts out of the fund.

(5) Money in the fund shall be invested in investments author- ized by the Trustee Act.

(6) The costs and expenses in administering the fund may, in accordance with the regulations, be paid out of the fund to the minister.

(7) The fund shall, in accordance with the regulations, be au- dited annually and a report on that audit shall be submitted to the minis- ter not more than 90 days after the end of the preceding fiscal year es- tablished for the fund.

(8) Notwithstanding another Act, the money in the fund does not form part of the Consolidated Revenue Fund and the fund is not a division of the Consolidated Revenue Fund, but the money is the prop- erty of the Crown. 26.

(1) A broker shall maintain at least one interest-bearing trus t account of a type approved by the superintendent in a financial institu- tion that is authorized to receive money on deposit.

(2) A deposit shall be paid directly to a broker and the broke r shall (

a) issue a receipt for the deposit; and (

b) deposit the monies in a tr ust account in accordance with sub- section (3). Trust account

2019 Real Estate Trading Act, 2019 Bil l 25

(3) A broker shall deposit in a trust account money received i n trust for other persons in connection with trades and shall dep osit the money within 2 banking days of receipt of the money.

(4) A broker shall only disburse money from a trust account where (

a) the offer of pur chase has not been accepted by the seller; (

b) the trade has been completed; (

c) the terms of the agreement of purchase and sale relating t o the disbursement of the money have been satisfied; (

d) the broker receives written notice from the seller and pur - chaser authorizing either (

i) the return of the money to the purchaser, or (ii) the release of the money to the seller; (

e) the superintendent has dire cted the disbursement of the money; (

f) a court has directed the disbursement of the money; or (

g) the money was deposited into the trust account in error.

(5) Interest earned on money deposited in a trust account re- ferred to in subsection (1) shall be the property of the broker.

(6) Where there is a dispute regarding a deposit held in a tru st account, the broker shall make every reasonable effort to resol ve the dispute.

(7) Where the broker is not able to resolve a dispute regardin g a deposit held in a trust account, either party to the dispute ma y apply to the superintendent to direct the disbursement of the deposit. 27.

(1) Where a broker holds money in trust for more than 2 years, the broker may apply, in the manner acceptable to the superinte ndent, to have the money paid to the fund. Unclaimed trust money

2019 Real Estate Trading Act, 2019 Bil l 26

(2) Notwithstanding subsection (1), a broker shall not pay the money to the fund where the broker has the express authorizatio n from the person who is entitled to the money held in trust to contin ue to hold the money in trust.

(3) Where at any time a person establishes to the satisfaction of the superintendent that he or she is entitled to money paid to the fund under subsection (1), the superintendent shall pay the money to him or her from the fund.

(4) A dispute regarding entitlement to money under this sectio n shall be determined by the superintendent. 28. A person who is licensed under this Act and either registered as a mortgage broker under the Mortgage Brokers Act or employed or contracted by a mortgage broker registered under the Mortgage Brokers Act shall not provide services under the authority of this Act and the Mortgage Brokers Act to a person in relation to a trade. 29. A broker shall not (

a) employ or permit the salesperson of another broker or a pe r- son who is not licensed as a salesperson under this Act to trade; or (

b) pay commission or other remuneration to a person referred to in paragraph (a). 30.

(1) A salesperson shall not trade on behalf of a broker other than a broker (

a) who is licensed as a broker under this Act; and (

b) by whom the salesperson is employed.

(2) A salesperson is not entitled to and shall not accept a co m- mission or other remuneration for a trade from a person other t han the broker with whom the salesperson is employed. 31.

(1) A broker or salesperson shall not make a representation or promise that he, she or another person will Prohibition Permitted salesper- sons Trading for other brokers prohibited Promises to resell prohibited

2019 Real Estate Trading Act, 2019 Bil l 27 (

a) resell or in any way guarantee or promise to resell real e state offered for sale by him or her; (

b) purchase or sell the purchaser's real estate; (

c) obtain a mortgage, extension of a mortgage, lease or exten - sion of a lease; or (

d) purchase or sell a mortgage or obtain a loan.

(2) Notwithstanding subsection (1), a broker or salesperson ma y make a representation referred to in subsection (1) where he or she de- livers to the person to whom the representation or promise is m ade, when it is made, a statement signed by him or her clearly setting out the details of the representation or promise. 32.

(1) A broker or salesperson shall not induce a person to break a contract for the sale or lease of real estate for the purpose o f entering into another contract for the sale or lease of that real estate.

(2) Unless agreed to in writing by the seller, a broker is not enti- tled to claim commission from a seller respecting a trade where t h e broker is aware that another broker has an unexpired exclusive listing agreement in relation to the real estate. 33.

(1) A broker shall not advertise to purchase, sell, exchange o r lease real estate unless the advertisement clearly indicates (

a) the broker's name as the advertiser; and (

b) that the broker is a broker.

(2) Where a broker references the name of a salesperson in an advertisement, the advertisement shall clearly indicate that the salesper- son is employed by the broker.

(3) An advertisement shall not be (

a) false; (

b) inaccurate; Breaking of contract prohibited Advertising

2019 Real Estate Trading Act, 2019 Bil l 28 (

c) reasonably capable of mislead ing the recipient or intended recipient; (

d) offensive or harmful to the best interests of the public; or (

e) prohibited by law. 34.

(1) A broker who is an individual shall (

a) carry on business in his or her name only; and (

b) not make any representati on that would indicate that his o r her business is being carried on by more than one person.

(2) Notwithstanding subsection (1), a surviving or remaining partner may carry on business in the name of the original partn ership where all representations made by the surviving or remaining partner in connection with his or her business indicate that the surviving or re- maining partner is the sole proprietor of the business. 35.

(1) Where the superintendent is of the opinion that a person h as committed, as specified by regulation, a contravention of this Act for which an administrative penalty applies, the superintendent or a person authorized by the superintendent may, in writing, notify that person that he or she is to pay to the government of the province an admini strative penalty in the amount set out in the notice for each day or par t of a day the contravention occurs or continues to occur.

(2) A person who pays an administrative penalty with respect t o a contravention may not be charged with an offence under this Act with respect to that contravention.

(3) Where a person fails to pay an administrative penalty in a c- cordance with a notification under subsection (1), the governme nt of the province may recover the amount owing in respect of the pen alty as a debt due the Crown.

(4) For the purpose of this section, an administrative penalty is a monetary penalty imposed in accordance with the regulations for a con- travention of this Act or the regulations. 36.

(1) Where after a hearing the superintendent determines that a licensee contravened this Act, the regulations, the code of conduct or an Carrying on busi- ness as an individ- ual Administrative penalty Order of superin- tendent

2019 Real Estate Trading Act, 2019 Bil l 29 order of the superintendent, the superintendent may make one or more of the following orders: (

a) an order suspending or cancelling the licensee's licence; (

b) an order imposing conditions or restrictions on the licens ee; (

c) an order requiring the licen see to pay to the fund a fine not exceeding $10,000; or (

d) another order prescribed in the regulations.

(2) The superintendent may publish a

summary of an order is- sued under this

section in accordance with the regulations. 37.

(1) The superintendent may designate persons or classes of per - sons to act as inspectors for the purpose of this Act and the regulations.

(2) The superintendent and the deputy superintendent are in- spectors for the purpose of this Act and the regulations.

(3) A person shall not knowingly make a false or misleading statement, either orally or in writing, to an inspector while h e or she is exercising powers or carrying out duties or functions under thi s Act or the regulations. 38.

(1) An inspector may, at all reas onable times, for purposes re - lated to the administration or enforcement of this Act or the regulations, inspect or examine the premises, processes, books and records of a per- son that the inspector may consid er relevant for the purpose of deter- mining compliance with this Act or the regulations, and the ins pector may, without a warrant, (

a) enter any premises where (

i) any property, books or records are or may be kept, or (ii) anything is done or is suspected by the inspector of be- ing done in connection with a requirement of this Act or the regulations; (

b) make copies, extracts, photographs or videos the inspector considers necessary; Inspectors Powers of inspec- tors

2019 Real Estate Trading Act, 2019 Bil l 30 (

c) require the owner or person in charge of a premises to giv e the inspector all reasonable assistance, including the produc- tion of books and records as requested by the inspector, and to answer all proper questions relating to the administration or enforcement of this Act or the regulations and, for that purpose, require the owner or person in charge to attend at the premises with the inspector; and (

d) require the owner or person in charge to make available th e means to generate and manipulate books and records that are in machine readable or electronic form and any other means o r i n f o r m a t i o n n e c e s s a r y f o r t h e i n s p e c t o r t o a s s e s s t h e books and records.

(2) Notwithstanding subsection (1), an inspector shall not ent er a dwelling-house without the consent of the occupant except und er the authority of a warrant issued under

section 40 or 41. 39. Where an inspector finds that a person is not in compliance wi th a provision of this Act or the regulations, the inspector may o rder that person to comply with the provision and may require the order t o be carried out immediately or within the period of time that the i nspector specifies. 40.

(1) Where during the course of an inspection under

section 38 or otherwise an inspector believes on reasonable grounds that ther e has been a contravention of this Act or the regulations, the inspec tor may, with a warrant issued under subsection (2) or

section 41, seize and take away any of the books or records that may be required as eviden ce of a contravention and may retain those documents until the time the y are required in a court proceeding.

(2) A Provincial Court judge who is satisfied upon oath or af- firmation there are reasonable grounds for believing there is i n or on a premises anything that may provi de evidence with respect to a s us- pected offence under this Act or the regulations, may issue a w arrant authorizing an inspector to enter the premises and to (

a) search; (

b) examine the contents of the premises and make those inquir - ies that the inspector considers necessary; and Order of inspector Contravention of Act suspected

2019 Real Estate Trading Act, 2019 Bil l 31 (

c) copy, extract, photograph, v ideo, seize and take away evi- dence, books and records, for the purpose of investigating the suspected offence.

(3) The owner or person in charge of a premises referred to in this

section or a person there sh all not obstruct an inspector in the car- rying out of his or her duties under this

section as authorized b y t h e warrant. 41.

(1) Where, in the opinion of an inspector it would not be prac ti- cal to appear before a Provincial Court judge to apply for a wa rrant, the inspector may make the applicati on by telephone or other means of telecommunication.

(2) Where an inspector acts under the authority of a warrant obtained under this section, the inspector shall provide a facs imile of the warrant to the owner or person in charge of a premises pres ent at the time the warrant is carried out.

(3) In subsection (2), "facsimile" includes a record produced by electronic means or a written record of a telephone conversatio n made by both parties to the conversation while it is in progress and which the parties have confirmed as to its accuracy by reading their reco rd of the conversation to one another at the end of the conversation. 42.

The superintendent, deputy superintendent, an inspector or a person acting on behalf of the superintendent or deputy superin tendent, shall not be liable for anything done in good faith in the exer cise or performance of a power, duty or function conferred or imposed o n him or her under this Act. 43. A person may appeal a decision o r order of the superintendent, the deputy superintendent or an i nspector made under this Act t o the Financial Services Appeal Board in accordance with the Financial Ser- vices Appeal Board Act. 44.

(1) A notice given under this A ct or the regulations shall be con- sidered sufficiently served where it is (

a) delivered or sent by prepai d r e g i s t e r e d m a i l t o t h e a d d r e ss for service provided by the person; or Telewarrant Protection from liability Appeal Notice

2019 Real Estate Trading Act, 2019 Bil l 32 (

b) sent electronically to the email address provided by the p er- son.

(2) For the purpose of this section, where a notice or documen t is sent by registered mail, it shall be considered to have been served on the fifth day after mailing, and the service may be proved by p roviding evidence that the notice or docum ent was prepaid and properly a d- dressed and sent.

(3) For the purpose of this section, where a notice or documen t is sent electronically, it shall be considered to have been ser ved on the day it is sent, if the document is sent by 4 p.m., or the next day that is not a Saturday or holiday, if the document is sent after 4 p.m. 45.

(1) A person who contravenes this Act, the regulations or an order under this Act is guilty of an offence and is liable on s ummary conviction to a fine not exceeding $50,000, and in default of p ayment or in addition to that fine, to imprisonment for a term not exc eeding 2 years.

(2) Each contravention of this Act, the regulations or an orde r under this Act constitutes a new and separate offence.

(3) Where an offence under this Act or the regulations is com- mitted or continued on more than one day, the person who commit ted the offence is liable to be convicted for a separate offence fo r each day on which the offence is committed or continued. 46. A prosecution under this Act or the regulations shall be start ed within 2 years from the date on which the superintendent become s aware of the alleged offence. 47. The Lieutenant-Governor in Council may make regulations (

a) exempting persons or classes of persons from the applicati on of this Act; (

b) prescribing the requirements, qualifications and condition s for issuing licences; (

c) respecting information and documentation to be provided with an application for a licence; Offences Limitation period Regulations

2019 Real Estate Trading Act, 2019 Bil l 33 (

d) prescribing the amount of errors and omissions liability i n- surance; (

e) prescribing the amount of bonds; (

f) providing for examination of applicants for licences; (

g) exempting persons from the examination requirements for licensees; (

h) respecting the method of payment for deposits; (

i) respecting the process for the superintendent to resolve d is- putes regarding deposits held in trust and directing the dis- bursement of those deposits; (

j) prescribing the annual reports to be made by licensees and the information to be contained in those reports; (

k) prescribing the books, accounts and records to be kept and maintained by brokers; (

l) respecting the administration and auditing of the fund, bo oks and records required to be maintained under this Act and the fiscal year of the fund; (

m) respecting the establishment and maintenance of the fund, requiring licensees to contribute to the fund and prescribing the amount and manner of making contributions to the fund; (

n) respecting the administrati on and audit of trust accounts and the books and records to be maintained by brokers with re- spect to those trust accounts; (

o) respecting advertising; (

p) prescribing or limiting the commission or rates of commis- sion that may be charged and collected by brokers; (

q) respecting the contravention of sections of this Act and t he regulations for which an administrative penalty may be im- posed and the time, amount and manner in which those pen- alties may be imposed and collected;

2019 Real Estate Trading Act, 2019 Bil l 34 (

r) respecting orders of the superintendent; (

s) respecting hearings; (

t) respecting the publication of orders of the superintendent ; (

u) defining a word or phrase used but not defined in this Act ; and (

v) generally, to give effect to this Act. 48. The minister may set fees and establish forms for the purpose and administration of this Act and the regulations. 49.

(1) A person who is the sup erintendent immediately before the coming into force of this Act shall continue to be the supe rin- tendent.

(2) A person who is the deputy superintendent immediately before the coming into force on this Act shall continue to be t he deputy superintendent.

(3) Where an applicant submitted an application under the former Act and that application has not been issued or refused on the coming into force of this Act, it shall be considered to be a n application under this Act.

(4) On the coming into force of this Act, a valid licence is- sued under the former Act shall continue to be valid as though it were a licence issued under this Act until one year after the c oming into force of this Act.

(5) Where a complaint proceeding was started under the former Act but not concluded before the coming into force of th is Act, the proceeding shall be concluded under the former Act as if the former Act were still in force.

(6) A decision under the former Act shall continue to be in force and shall be considered to be a decision under this Act. 50. Paragraph 95(

f) of the Consumer Protection and Business Practices Act is repealed and the following substituted: Fees and forms Transitional SNL2009 cC-31.1 Amdt.

2019 Real Estate Trading Act, 2019 Bil l 35 (

f) a person in respect of business for the carrying on of whi ch he or she is required to be licensed under the Securities Act, the Insurance Adjusters, Agents and Brokers Act , the Insur- ance Companies Act or the Real Estate Trading Act, 2019; or 51. Paragraph 6(

b) of the Mortgage Brokers Regulations pub- lished under the Mortgage Brokers Act is repealed and the following substituted: (

b) a real estate broke r, licensed under the Real Estate Trading Act, 2019, acting in the ordinary course of his or her busi- ness; 52. Paragraphs 7(1)(

d) and 9(1)(

g) shall be repealed on the day that

section 25 comes into force. 53. The Real Estate Trading Act is repealed. 54.

(1) This Act comes into force on January 1, 2020.

(2) Notwithstanding subsection (1), paragraphs 6(1)(

e) and 7(1)(

e) and sections 9, 10 and

section 25 or a subsection, para graph or subparagraph of those sections come into force on a day or d ays to be proclaimed by the Lieutenant-Governor in Council. ©Queen's Printer CNLR 1006/96 Amdt. Repeal RSNL1990 cR-2 Rep. Commencement

Document details

Collection	Newfoundland and Labrador — Committees
Citation	committees_standingcommittees_govservices_ga49_proposedbill-realestatetradingact2019
Type	committee
Volume / chapter	committees_standingcommittees_govservices_ga49_proposedbill-realestatetradingact2019.pdf
Language	en
Format	json
Source	PROVINCIAL
Identifier	338c040dfd6a2207c4f9c400b45ad0a630070464

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