Bill 1913 — Real Estate Trading Act, 2019 (49th General Assembly, 1st Session)
Bill 1913
Newfoundland and Labrador — Bills
First
Session, 49th General Assembly
Elizabeth II, 2019
BILL 13
AN ACT RESPECTING THE
REGULATION OF REAL ESTATE TRADING IN THE PROVINCE
Received
and Read the First Time ..........................................................November 7, 2019
Second
Reading ......................................................................................November 19, 2019
Committee ............... ............................................ .. Amendments
1 ,
2 ,
- November 21, 2019
Third
Reading ........................................................................................November 21, 2019
Royal
Assent ...........................................................................................Decmeber 6, 2019
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
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 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