Dual Representation Banned in Quebec Since 2022: What Happens to Your Buyer Brokerage Contract

You signed a brokerage contract to purchase with a broker, and the property you like happens to be listed by that same broker. Before 2022, they could, under certain conditions, have represented you while also representing the seller. Not anymore: in residential brokerage, dual representation has been banned since June 10, 2022. This article explains what then happens to your contract, what the broker still owes you, and the only two exceptions. For the different kinds of brokerage contracts, see our article on exclusive versus non-exclusive listing agreements.

Since June 10, 2022, a broker no longer represents both parties

Section 29.1 of the Real Estate Brokerage Act bars a broker from being bound, in the same residential transaction, by a brokerage contract with the seller and a brokerage contract with the buyer. The reason is simple: the seller wants the highest price and the buyer the lowest. One broker cannot protect and promote two opposing interests at once.

The ban doesn't target a broker showing a property to an unrepresented buyer. It targets the situation where one broker would be bound by contract to both parties. That situation, and only that one, is what the law brings to an end.

Without a written contract, nobody is represented

The same reform abolished the verbal brokerage contract in residential brokerage. Since June 10, 2022, a verbal brokerage contract is null. To represent a seller or buyer, meaning to be bound to protect and promote their interests, a broker must have a written brokerage contract with them.

The consequence for the buyer is concrete. If they "work with" a broker without having signed a brokerage contract to purchase, they are not represented, however friendly and available the broker may be. The dual representation question therefore only arises for a buyer who has signed a written contract, and that contract is what is at stake below.

When the situation arises, the buyer contract ends by operation of law

As soon as the broker learns that their buying client wants to make an offer on a property the broker has listed, they must terminate the brokerage contract to purchase. The law provides that this termination takes effect by operation of law upon sending a substantiated written notice that identifies, among other things, the property concerned. The broker then continues to represent the seller, and the seller only.

Two points matter for the buyer. The broker cannot claim any compensation following this termination. And the termination shouldn't come as a surprise: when the brokerage contract to purchase is signed, the broker must warn the buyer in writing that they might have to end it in this exact situation.

What the broker must recommend: another broker

When terminating the contract, the broker must advise the buyer to sign a new brokerage contract to purchase with another broker, so their interests are defended in the transaction. They may suggest names, but they cannot limit the referral to a single broker, and they cannot be paid for it: they remain the seller's broker, and having a stake in the choice of the buyer's broker would be a conflict of interest.

The buyer doesn't have to follow that advice. They can carry on with the transaction unrepresented. But they then need to know exactly what that means, which is the subject of the next section.

If you stay without a broker: fair treatment, not advocacy

If the buyer chooses not to take another broker, the seller's broker must tell them plainly that they don't represent them, can neither protect nor defend their interests, and that their role is now to protect and promote the seller's interests only. They do, however, owe the buyer fair treatment.

Treating a party fairly means giving objective information about all facts relevant to the transaction and about everyone's rights and obligations, without disclosing the seller's confidential or strategic information. In practice, the broker can show the property, help the buyer fill out the promise to purchase and its annexes, and advise including the usual financing and inspection conditions. They won't negotiate for the buyer: they negotiate for the seller.

The two exceptions, and the only case where written consent comes in

The regulations provide two exceptions, and only two. The first covers underserved regions: a broker may be in a dual representation situation when no other licensee able to represent the buyer has an establishment within a 50-kilometre radius of the property. It is up to the broker relying on it to check that the conditions are met.

The second covers agencies: two different brokers from the same agency may each represent their own client, one the seller and the other the buyer, in the same transaction. The agency must then put strong measures in place to protect each client's confidential and strategic information.

Only in these exception cases does consent come in: the broker must notify the buyer in writing and obtain their written consent to keep representing them, before the promise to purchase is drafted. Outside these exceptions, no consent can keep dual representation in place. If you refuse to consent, the buyer contract ends the same way as in the general case.