Mortgage broker who is also a real estate broker
A mortgage broker may also hold a real estate broker’s licence. However, holding these two titles can present its share of compliance challenges.
Mortgage brokers who are also real estate brokers must always follow the representation and client solicitation rules when introducing themselves to clients.
When offering both mortgage brokerage services and real estate brokerage services to the same client, mortgage brokers must comply with all their obligations related to the pursuit of activities as a mortgage broker, particularly as they relate to:
Visit the Activities to be declared page to find out more about all your obligations related to outside activities you may engage in.
- Professional conduct
This link will open in a new window - Disclosure of remuneration and other benefits in connection with a proposed loan
- Sharing of commissions
- Disclosure of lenders
The moment a mortgage broker proposes a mortgage lender or a loan from a mortgage lender to their clients, they engage in a mortgage brokerage transaction and must perform all the acts involved in such a transaction. As a mortgage broker, they therefore may not limit themselves to making referrals, even if they are also a real estate broker.
A mortgage broker wishes to also act as a real estate broker with the same client in the same transaction? It’s important to remember that:
- Brokers must always avoid placing themselves in a conflict of interest This link will open in a new window.
- They must act with independence in respect of their clients and in their clients’ best interests This link will open in a new window. They must therefore subordinate their personal interests and the interests of any other person or company to their clients’ interests.
- A broker must never exert pressure on a client. For example, they must not hasten the finalization of a loan contract in order to speed up the sale of a home.
- A broker must act with respect, integrity, objectivity and discretion.
A broker may not act as a mortgage broker for one party to a transaction and as a real estate broker for another party to the same transaction. Since a mortgage broker cannot meet their ethical obligations when they represent opposing interests, they are not allowed to act as a mortgage broker for one party involved in a transaction and a real estate broker for another party involved in the same transaction.
For the rules governing real estate brokerage, refer to the OACIQ website This link will open in a new window.
References
- Regulation respecting the pursuit of activities as a representative This link will open in a new window, more specifically the following sections:
- 16.1 This link will open in a new window Mortgage brokers must take reasonable measures to ensure that the persons authorized to act on their behalf in the pursuit of their activities as a mortgage broker comply with the provisions of the Act respecting the distribution of financial products and services (chapter D-9.2 This link will open in a new window) and its regulations, including those of this subdivision.
- 16.2 This link will open in a new window Mortgage brokers must act with respect and integrity.
They must also act with prudence, diligence, objectivity and discretion.
- 16.5 This link will open in a new window Mortgage brokers must act with independence in respect of their clients and in their clients’ best interests. To that end, they must subordinate their personal interests and the interests of any other person or company to their clients’ interests and must not let their judgment be subject to any pressure whatsoever.
- 16.6 This link will open in a new window Mortgage brokers must not place themselves in a conflict of interest.
- 16.1