Fourth

Session, 48th General Assembly

Elizabeth II, 2019

BILL 4

AN ACT RESPECTING THE

REGULATION OF REAL ESTATE TRADING IN THE PROVINCE

Received

and Read the First Time ................................................................

Second

Reading ............................................................................................

Committee .....................................................................................................

Third

Reading ...............................................................................................

Royal

Assent .................................................................................................

HONOURABLE SHERRY

GAMBIN-WALSH

Minister of Service

Newfoundland and Labrador

Ordered to be printed by

the Honourable House of Assembly

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 Superintendent

of Real Estate Brokers and Salespersons;

allow the Superintendent of

Real Estate Brokers and Salespersons to issue a personal real estate

corporation licence;

require real estate brokers and

salespersons to obtain errors 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 requirements

for real estate brokers and salespersons;

require that a real estate broker

or salesperson disclose referral 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 mortgage 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;

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.

A BILL

AN ACT RESPECTING THE REGULATION OF REAL

ESTATE TRADING IN THE PROVINCE

Analysis

Short title

Interpretation

Non-application of Act

Superintendent and deputy superintendent

Powers and duties of superintendent

Types of licences

Application for licence

Designated representative

Personal real estate corporation licence

Personal real estate corporation

Duties of licensees

Notice of changes

Certificate

Temporary broker licence

Variation, suspension or cancellation of

licence

Licence required

Records

Agreements

Disclosure re: purchase of real estate

for own purpose

Referral

Payment of commission

Action for commission

Trade of business

Bond

Fund

Trust account

Unclaimed trust money

Prohibition

Permitted salespersons

Trading for other brokers prohibited

Promises to resell prohibited

Breaking of contract prohibited

Advertising

Carrying on business as an individual

Administrative penalty

Order of superintendent

Inspectors

Powers of inspectors

Order of inspector

Contravention of Act suspected

Telewarrant

Protection from liability

Appeal

Notice

Offences

Limitation period

Regulations

Fees and forms

Transitional

SNL2009 cC-31.1 Amdt.

CNLR 1006/96 Amdt.

Repeal

RSNL1990 cR-2 Rep.

Commencement

Be it enacted by the Lieutenant-Governor and

House of Assembly in Legislative Session convened, as follows:

Short title

1. This

Act may be cited as the Real Estate

Trading Act, 2019.

Interpretation

(1) In this Act

(a) "affiliated person" means

(

i) the spouse or cohabiting partner of a

controlling individual,

(ii) a child of a controlling individual,

(iii) a corporation, all of the shares of which are

beneficially 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 more of a controlling individual and the other individuals referred 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 gain or an interest in an undertaking;

(e) "cohabiting partner" means either of

2 persons who are cohabiting 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 sole 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);

(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, parent, child, brother, sister, grandparent and grandchild;

(k) "former Act" means the Real Estate Trading Act ;

(l) "fund" means the Real Estate

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 for a specified term and for a

specified amount of money;

(p) "person" includes a partnership, a

corporation and the heirs, executors, administrators or other legal

representatives of a person;

(q) "personal real estate corporation"

means a person who holds a licence issued under paragraph 6(1)(e);

(r) "personal real estate corporation

licence" means a licence issued under paragraph 6(1)(e);

(s) "real estate" includes freehold 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 licensee;

(u) "restricted broker" means a person

who holds a licence issued under paragraph 6(1)(c);

(v) "restricted broker licence" means a

licence issued under paragraph 6(1)(c);

(w) "restricted salesperson" means a

person who holds a licence issued under paragraph 6(1)(d);

(x) "restricted salesperson licence"

means a licence issued under paragraph 6(1)(d);

(y) "salesperson" means a person who

holds a licence issued under paragraph 6(1)(b);

(z) "salesperson licence" means a

licence issued under paragraph 6(1)(b);

(aa) "spouse" means either 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 cohabited

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 estate by sale, purchase, agreement for sale, exchange, option, lease

or otherwise,

(ii) an offer or attempt to list real estate for

the purpose of 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.

(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 this 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 licence.

Non-application

of Act

3. This

Act does not apply to

(

a) an assignee, custodian, liquidator, receiver,

trustee or other 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 estate;

(

d) an executor of an estate trading 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 trading in the ordinary course of its business;

(

g) a member of the Law Society of Newfoundland

and Labrador trading in the course of his or

her practice;

(

h) a person who completes not more than 3 trades

in a calendar year relating to real estate owned by him or her or in which he

or she has a substantial interest;

(

i) a person who rents property owned by him or

her or in which he or she has a substantial interest;

(

j) a person in the business of property

management who arranges a lease agreement; or

(

k) a person or class of persons exempted from the

application of this Act by the regulations.

Superintendent

and deputy superintendent

(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 exercise 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 superintendent is vacant.

Powers and duties

of superintendent

(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 accordance 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 duties under this Act, the superintendent has the powers, privileges

and immunities that are or may be conferred on a commissioner under the Public Inquiries Act, 2006 .

Types of licences

(1) The superintendent may issue the following licences:

(

a) a broker licence which authorizes the holder

of the licence to trade;

(

b) a salesperson licence which authorizes the

holder of the licence to act as a salesperson of a broker and trade on behalf

of that broker;

(

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 holder 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 corporation licence which

authorizes 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 refuses to issue a

licence, the superintendent 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 her salesperson licence;

and

(

b) where the salesperson is a controlling

individual, a termination 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 transferrable or assignable.

Application for

licence

(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 from the Royal

Newfoundland Constabulary or a certified criminal records check from the Royal

Canadian Mounted Police satisfactory to the superintendent;

(

d) a bond to the Crown in the amount prescribed

in the regulations;

(

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 regulations.

(2) Where the applicant is

(

a) a partnership, the applicant shall provide a

current certificate 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 certificate 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) shall provide proof, satisfactory to the superintendent, of the successful

completion 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) shall provide a statement made by or on behalf of the broker for whom the applicant

proposes to act as salesperson,

(

a) recommending the applicant as an appropriate

person to receive a salesperson licence; and

(

b) declaring that, where the applicant is granted

a licence, the applicant shall act as a salesperson employed by and representing

the broker.

(5) Where the superintendent requires further

information in order to assess the application, the superintendent shall

request further information from the applicant and the applicant shall provide

that information in the time set by the superintendent.

Designated representative

(1) Where

a corporation or partnership applies for a broker licence, it shall designate

an individual to act on its behalf for the purposes of the licence.

(2) The designated representative shall be an

individual who

(

a) is a director of the corporation or a partner

in the partnership;

(

b) is active in the day to day operations of the corporation

or partnership and knowledgeable of the business of the corporation or partnership;

(

c) holds a valid salesperson licence; and

(

d) successfully completed the prescribed examinations

for the corporation or partnership to obtain its broker licence.

(3) A broker licence issued to a corporation or

partnership shall be in the name of the corporation or partnership and shall

state on the licence the name of the designated representative.

(4) Notwithstanding subsections (1) to (3), a

corporation or partnership may designate another individual who satisfies the requirements

in paragraphs (2)(b), (

c) and (

d) who, in the absence or incapacity of the designated

representative, shall act as the designated representative.

(5) Where a corporation or partnership designates

a person under subsection (4), it shall provide the name of that person to the

superintendent.

(6) Where a designated representative dies,

becomes incapacitated or terminates his or her employment with a broker and the

broker does not have an alternate designated representative, the superintendent

may

(

a) allow the broker to appoint a designated

representative that 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.

Personal real

estate corporation licence

(1) A

person applying for a personal real estate corporation licence 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 personal real estate

corporation includes the words "personal real estate corporation";

(

d) an application for a salesperson licence for

the controlling individual or where the controlling individual already holds a

salesperson licence, a request to amend the controlling individual's

salesperson licence to comply with subsection (4);

(

e) proof satisfactory to the superintendent that the

controlling individual held a salesperson licence for at least 2 years during

the 5 years preceding the application for the personal real estate corporation

licence;

(

f) the written consent of the broker for which

the controlling individual proposes to act as a salesperson;

(

g) a bond to the Crown in the amount prescribed

in the regulations;

(

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 regulations.

(2) A personal real estate corporation licence

shall

(

a) indicate the name of the controlling

individual; and

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

shall 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 real 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 corporation.

(5) Where the superintendent requires further information

in order to assess an application, the superintendent shall request further

information from the applicant and the applicant shall provide that information

in the time period set by the superintendent.

Personal real

estate corporation

(1) A

controlling individual may be employed by a personal real estate corporation to

trade on behalf of a broker, and may receive remuneration in relation to a

trade from a personal real estate corporation, where

(

a) the controlling individual and the personal

real estate corporation have each obtained a licence under this Act;

(

b) the trades provided by the personal real

estate corporation are provided only by the controlling individual;

(

c) any other persons employed by the personal

real estate corporation 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 corporation comply with the requirements in this Act, the regulations

and the code of conduct.

(2) A controlling individual employed by a

personal real estate corporation in accordance with paragraph (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 employed

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 personal real estate corporation to trade on behalf of a broker does not

affect

(

a) the controlling individual's liability with

respect to trades;

(

b) the controlling individual's obligations and

responsibilities 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

licence of the controlling individual; and

(

b) amend the licence of the controlling

estate corporation licence.

(5) Where a personal real estate corporation

ceases to meet the criteria set out in subparagraphs 9(1)(c)(

i) to (v), its

personal real estate corporation licence is terminated.

(6) Where the salesperson licence of a controlling

individual is suspended or cancelled, the controlling individual's personal

real estate corporation licence is suspended or cancelled as of the time at

which the controlling individual's licence is suspended or cancelled.

(7) Where the licence of a personal 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 suspended or cancelled or terminated as of the time at which the

personal real estate corporation's licence is suspended, cancelled or

terminated.

Duties of

licensees

11. A

licensee shall

(

a) pay the annual fee set by the minister;

(

b) file an annual report in the form set by the

superintendent;

(

c) comply with this Act, the regulations, the

(

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 required by the superintendent;

(

f) complete the continuing education requirements

set by the superintendent; and

(

g) provide information or documentation to the

superintendent where requested.

Notice of changes

12. A

licensee shall notify the superintendent in writing of the following changes

within 10 days of the change:

(

a) a change in the address for service;

(

b) a change in email address;

(

c) a change in the partners where the licensee is

a partnership or a change in the directors where the licensee is a corporation;

(

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 application for a licence; and

(

g) a change in any information in the most recent

annual report submitted by the licensee.

Certificate

(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 signed by

(

a) the broker or where the broker is

(

i) a partnership, by the partners; or

(ii) a corporation, by the designated

representative; and

(

b) an accountant approved by the superintendent.

Temporary broker licence

(1) Notwithstanding

section 6, where a broker who is an individual dies or becomes incapacitated,

the superintendent may issue a temporary broker licence to the executor or

administrator of the deceased 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

licence to carry on business of a broker only in relation to trading on behalf of

the deceased or incapacitated broker.

(3) Where a temporary broker licence is issued

under subsection (1), salespersons of the deceased or incapacitated broker at

the time of the death or incapacitation

of the broker shall be considered to be licensed as salespersons of the person

to whom the temporary licence was issued for the term of the temporary licence.

Variation, suspension

or cancellation of licence

15. The

superintendent may vary, suspend or cancel a licence where

(

a) the superintendent is satisfied that the

licensee contravened

(

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 statements in the application for

a licence, the information provided in support of the application or an annual

report;

(

c) the licensee failed to file an annual report;

(

d) the licensee failed to pay the annual fee;

(

e) the licensee did not satisfy the continuing

education requirements; or

(

f) the superintendent is satisfied that it is in the

public interest to vary, suspend or cancel the licence.

Licence required

16. A

person shall not

(

a) trade or hold himself or herself out as a

broker, unless he 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, unless he or she holds a valid licence issued under paragraph

6(1)(b), (

d) or (e).

Records

(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 estate 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 received and the

information relating 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 trust account record

in which the broker shall enter the full details of the receipt and disbursement

of trust money.

Agreements

(1) Immediately after the execution of an agreement to list real estate for sale,

exchange or lease with a broker, the broker or the salesperson shall deliver to

the signatories of the agreement a copy of the 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 date on which the

agreement ends; or

(

c) a copy of the agreement is not delivered by

the broker or the broker's salesperson to the person 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 sign copies of

the agreement, and the broker or salesperson shall retain one signed copy and

shall immediately deliver one signed copy to the signatories involved in the

trade.

Disclosure re:

purchase of real estate for own purpose

(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 estate listed with the broker or salesperson for sale, he or

she shall clearly disclose in writing to the person selling the real estate

that

(

d) he or she is purchasing the real estate or

acquiring an interest in the real estate for himself, herself or a family

member;

(

e) he or she is about to negotiate, is

negotiating or has negotiated 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

liable to pay commission to the broker or salesperson.

Referral

(1) Where,

in the course of providing services, a licensee refers a person to a service

provider or another licensee and the licensee knows that he or she may be

entitled to receive a referral fee, remuneration or benefit from that service

provider or other licensee for making the referral, the licensee shall disclose

in writing to the person that the licensee referred that

(

a) he or she forwarded the person's name and

contact information to the service provider or other licensee;

(

b) he or she may be entitled to receive a

referral fee, remuneration 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).

Payment of commission

(1) Commission

or other remuneration payable to a broker in respect of a trade shall be the

amount agreed upon by the parties 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 prevailing 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 limiting the

amount of commission, the rate of commission or other remuneration charged or

collected by brokers.

(4) A broker or salesperson shall not request or

enter into an agreement for the payment of commission or other remuneration

based on the difference between the price 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 estate, the broker or salesperson is not

entitled to the commission or remuneration.

Action for commission

22. An

action shall not be brought for commission or remuneration for services

relating to a trade unless

(

a) at the time the services were rendered the

person bringing the action was licensed under this Act or exempted from licensing

under this Act;

(

b) the broker or the broker's salesperson entered

into a written agreement with

(

i) the person to be charged the commission, or

(ii) a person authorized to sign the agreement on

that person's behalf;

(

c) the broker or the broker's salesperson

obtained a written offer that is accepted; or

(

d) the broker having been authorized in writing

to list the property

(

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.

Trade of business

(1) Where

a trade of a business is negotiated by a broker or the broker's salesperson,

the person negotiating the trade shall, before an agreement of purchase and

sale is signed by the parties, deliver to the person acquiring the business,

(

a) a profit and loss statement or a statement

showing the revenue 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 on 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 person acquiring the business an affidavit of the person selling

the business

which the person selling the business holds possession of the premises in which

the business is being carried on,

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 delivered to the person acquiring the business, the fixtures,

goods, chattels and rights and other assets relating to or connected with the

business shall be considered to be included in the transaction.

Bond

(1) A

bond shall continue in force for a period of 2 years after 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 by 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 has been made by a court;

(

b) a civil judgment arising out of a trade in

real estate has been made; or

(

c) a winding-up or receiving order 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 conditioned and that conviction, judgment or order has

become final.

(3) The superintendent shall assign the proceeds

of a bond forfeited 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 the 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 Supreme

Court, shall be repaid out of the Supreme Court to the bonding company at the

end of 2 years following the payment to the Crown of the proceeds of the bond.

Fund

(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 held 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 account; or

(

d) declares bankruptcy.

(2) The fund shall consist of money paid into it

by licensees in accordance with the regulations and interest, dividends and

other returns earned upon the investment of money in the fund.

(3) The minister shall direct the superintendent

to be responsible for the financial management and administration of and disbursement

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 payments out

of the fund.

(5) Money in the fund shall be invested in

investments authorized 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 audited annually and a report on that audit shall be submitted

to the minister not more than 90 days after the end of the preceding fiscal

year established 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 property of the

Crown.

Trust account

(1) A

broker shall maintain at least one interest-bearing trust account of a type

approved by the superintendent in a financial institution that is authorized to

receive money on deposit.

(2) A deposit shall be paid directly to a broker

and the broker shall

(

a) issue a receipt for the deposit; and

(

b) deposit the monies in a trust account in

accordance with subsection (3).

(3) A broker shall deposit in a trust account

money received in trust for other persons in connection with trades and shall

deposit 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 purchase has not been accepted by

the seller;

(

b) the trade has been completed;

(

c) the terms of the agreement of purchase and

sale relating to the disbursement of the money have been satisfied;

(

d) the broker receives written notice from the seller

and purchaser 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 directed the

disbursement of the money;

(

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

(

g) the money was deposited into the trust account

in error.

(5) Interest earned on money deposited in a trust

account referred to in subsection (1) shall be the property of the broker.

(6) Where there is a dispute regarding a deposit

held in a trust account, the broker shall make every reasonable effort to

resolve the dispute.

(7) Where the broker is not able to resolve a

dispute regarding a deposit held in a trust account, either party to the

dispute may apply to the superintendent to direct the disbursement of the deposit.

Unclaimed trust

money

(1) Where

a broker holds money in trust for more than 2 years, the broker may apply, in

the manner acceptable to the superintendent, to have the money paid to the

fund.

(2) Notwithstanding subsection (1), a broker shall

not pay the money to the fund where the broker has the express authorization

from the person who is entitled to the money held in trust to continue 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

section shall be determined by the superintendent.

Prohibition

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.

Permitted salespersons

29. A

broker shall not

(

a) employ or permit the salesperson of another

broker or a person 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).

Trading for other

brokers prohibited

(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 commission or other remuneration for a trade from a person other than

the broker with whom the salesperson is employed.

Promises to

resell prohibited

(1) A

broker or salesperson shall not make a representation or promise that he, she

or another person will

(

a) resell or in any way guarantee or promise to

resell real estate 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 extension of a lease; or

(

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

(2) Notwithstanding subsection (1), a broker or

salesperson may make a representation referred to in subsection (1) where he or

she delivers to the person to whom the representation or promise is made, when

it is made, a statement signed by him or her clearly setting out the details of

the representation or promise.

Breaking of

contract prohibited

(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 of 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 entitled to claim commission from a seller respecting a trade

where the broker is aware that another broker has an unexpired exclusive

listing agreement in relation to the real estate.

Advertising

(1) A

broker shall not advertise to purchase, sell, exchange or 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 salesperson is employed by the broker.

(3) An advertisement shall not be

(

a) false;

(

b) inaccurate;

(

c) reasonably capable of misleading the recipient

or intended recipient;

(

d) offensive or harmful to the best interests of

the public; or

(

e) prohibited by law.

Carrying on business

as an individual

(1) A

broker who is an individual shall

(

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

(

b) not make any representation that would

indicate that his or 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 partnership

where all representations made by the surviving or remaining partner in

connection with his or her business indicate that the surviving or remaining

partner is the sole proprietor of the business.

Administrative

penalty

(1) Where

the superintendent is of the opinion that a person has 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 administrative penalty in the amount set out in the notice for

each day or part of a day the contravention occurs or continues to occur.

(2) A person who pays an administrative penalty

with respect to 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 accordance with a notification under subsection (1), the government

of the province may recover the amount owing in respect of the penalty 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

contravention of this Act or the regulations.

Order of superintendent

(1) Where

after a hearing the superintendent determines that a licensee contravened this

Act, the regulations, the code of conduct or an 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 licensee;

(

c) an order requiring the licensee 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 issued under this

section in accordance with the regulations.

Inspectors

(1) The

superintendent may designate persons or classes of persons to act as inspectors

for the purpose of this Act and the regulations.

(2) The superintendent and the deputy

superintendent are inspectors 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 he or

she is exercising powers or carrying out duties or functions under this Act or

the regulations.

Powers of inspectors

(1) An

inspector may, at all reasonable times, for purposes related to the

administration or enforcement of this Act or the regulations, inspect or

examine the premises, processes, books and records of a person that the

inspector may consider relevant for the purpose of determining compliance with

this Act or the regulations, and the inspector 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 being done in connection with a requirement of this Act or the

regulations;

(

b) make copies, extracts, photographs or videos

the inspector considers necessary;

(

c) require the owner or person in charge of a

premises to give the inspector all reasonable assistance, including the production

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 the means to generate and manipulate books and records that are in

machine readable or electronic form and any other means or information

necessary for the inspector to assess the books and records.

(2) Notwithstanding subsection (1), an inspector

shall not enter a dwelling-house without the consent of the occupant except under

the authority of a warrant issued under

section 40 or 41.

Order of

inspector

39. Where

an inspector finds that a person is not in compliance with a provision of this

Act or the regulations, the inspector may order that person to comply with the

provision and may require the order to be carried out immediately or within the

period of time that the inspector specifies.

Contravention of

Act suspected

(1) Where

during the course of an inspection under

section 38 or otherwise an inspector

believes on reasonable grounds that there has been a contravention of this Act

or the regulations, the inspector 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 evidence of a contravention and may retain those documents until

the time they are required in a court proceeding.

(2) A Provincial Court judge who is satisfied upon

oath or affirmation there are reasonable grounds for believing there is in or

on a premises anything that may provide evidence with respect to a suspected

offence under this Act or the regulations, may issue a warrant authorizing an

inspector to enter the premises and to

(

a) search;

(

b) examine the contents of the premises and make

those inquiries that the inspector considers necessary; and

(

c) copy, extract, photograph, video, seize and

take away evidence, 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 shall not obstruct an inspector

in the carrying out of his or her duties under this

section as authorized by

the warrant.

Telewarrant

(1) Where,

in the opinion of an inspector it would not be practical to appear before a

Provincial Court judge to apply for a warrant, the inspector may make the

application 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 facsimile

of the warrant to the owner or person in charge of a premises present 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 conversation 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 record of the conversation to one another at the end of the conversation.

Protection from

liability

42. The

superintendent, deputy superintendent, an inspector or a person acting on

behalf of the superintendent or deputy superintendent, shall not be liable for

anything done in good faith in the exercise or performance of a power, duty or

function conferred or imposed on him or her under this Act.

Appeal

43. A

person may appeal a decision or order of the superintendent, the deputy

superintendent or an inspector made under this Act to the Financial Services

Appeal Board in accordance with the Financial

Services Appeal Board Act .

Notice

(1) A notice given under this Act or the regulations shall be considered

sufficiently served where it is

(

a) delivered or sent by prepaid registered mail to

the address for service provided by the person; or

(

b) sent electronically to the email address

provided by the person.

(2) For the purpose of this section, where a

notice or document 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

providing evidence that the notice or document was prepaid and properly addressed

and sent.

(3) For the purpose of this section, where a

notice or document is sent electronically, it shall be considered to have been

served 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.

Offences

(1) A

person who contravenes this Act, the regulations or an order under this Act is

guilty of an offence and is liable on

summary conviction to a fine not

exceeding $50,000, and in default of payment or in addition to that fine, to

imprisonment for a term not exceeding 2 years.

(2) Each contravention of this Act, the

regulations or an order under this Act constitutes a new and separate offence.

(3) Where an offence under this Act or the

regulations is committed or continued on more than one day, the person who

committed the offence is liable to be convicted for a separate offence for each

day on which the offence is committed or continued.

Limitation period

46. A

prosecution under this Act or the regulations shall be started within 2 years

from the date on which the superintendent becomes aware of the alleged offence.

Regulations

47. The

Lieutenant-Governor in Council may make regulations

(

a) exempting persons or classes of persons from

the application of this Act;

(

b) prescribing the requirements, qualifications

and conditions for issuing licences;

(

c) respecting information and documentation to be

provided with an application for a licence;

(

d) prescribing the amount of errors and omissions

liability insurance;

(

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 disputes regarding deposits held in trust and directing the disbursement

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, books 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 administration and audit of

trust accounts and the books and records to be maintained by brokers with respect

to those trust accounts;

(

o) respecting advertising;

(

p) prescribing or limiting the commission or

rates of commission that may be charged and collected by brokers;

(

q) respecting the contravention of sections of

this Act and the regulations for which an administrative penalty may be imposed

and the time, amount and manner in which those penalties may be imposed and

collected;

(

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.

Fees and forms

48. The

minister may set fees and establish forms for the purpose and administration of

this Act and the regulations.

Transitional

(1) A person who is the superintendent

immediately before the coming into force of this Act shall continue to be the

superintendent.

(2) A

person who is the deputy superintendent immediately before the coming into

force on this Act shall continue to be the 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 an application under this Act.

(4) On

the coming into force of this Act, a valid licence issued under the former Act shall

continue to be valid as though it were a licence issued under this Act until

one year after the coming 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 this 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.

SNL2009 cC-31.1

Amdt.

50. Paragraph 95(

f) of the Consumer Protection and Business Practices Act is repealed and the

following substituted:

(

f) a person in respect of business for the

carrying on of which he or she is required to be licensed under the Securities Act, the Insurance Adjusters, Agents and Brokers Act , the Insurance Companies Act or

the Real Estate Trading Act, 2019; or

CNLR 1006/96

Amdt.

51. Paragraph 6(

b) of the Mortgage Brokers Regulations published under the Mortgage Brokers Act is repealed and the

following substituted:

(

b) a real estate broker, licensed under the Real Estate Trading Act, 2019 , acting in

the ordinary course of his or her business;

Repeal

52. Paragraphs

7(1)(

d) and 9(1)(

g) shall be repealed on the day that

section 25 comes into

force.

RSNL1990 cR-2 Rep.

53. The Real

Estate Trading Act is repealed.

Commencement

(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, paragraph or subparagraph of

those sections come into force on a day or days to be proclaimed by the

Lieutenant-Governor in Council.

Queen's Printer