Weber Shandwick Worldwide

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To protect your investment related to a real
estate transaction
April 2003
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Answers to your questions

• What is the Fonds dindemnisation du courtage
  immobilier?

• What protection is provided?

• What are your recourses?

• How to file a claim application?

• What are the delays involved?

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• The Fonds dindemnisation du courtage immobilier
  and protecting the public

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What is the Fonds dindemnisation du courtage
immobilier?

• An organization established in 1985 under the
  Real Estate Brokerage Act (L.R.Q., c. C-73.1).
• An organization distinct from the Association des
  courtiers et agents immobiliers du Québec
  (ACAIQ).
• All Quebec brokers and real estate agents pay
  annual dues to the Fund.
• An additional safety guarantee for the public.

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Our mission

• Indemnify the victims of a fraud, a dishonest
  transaction or a misappropriation of funds or
  other property which, under the Act, must be
  deposited in a trust account.

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What is covered?

• Only those transactions realized through the
  intermediary of a broker or agent member of the
  Association des courtiers et agents immobiliers
  du Québec (ACAIQ).

• Guarantees a brokers or an agents
  responsibility in cases of
• Fraud
• Dishonest transaction
• Misappropriation of funds or other property

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What is covered?

• In cases of fraud when a consumer is penalized
  financially by a real estate broker or agent who
  voluntarily induces him into error through
  misrepresentations or by omission in the course
  of a real estate transaction.

• In cases of a dishonest transaction by the broker
  or agent resulting in a partial or total loss of
  the sums invested in the course of a real estate
  transaction.

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What is covered?

• In cases of misappropriation of funds or other
  property when a consumer is unable to recuperate
  any monies invested in the course of a real
  estate transaction because of a misappropriation
  of these funds which should have been deposited
  in a trust account.

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Why a trust account?

• Because of the brokers or agents obligation to
  deposit into a trust account any monies received
  on behalf of a third party in the exercise of
  his profession.
• An account used to deposit temporarily and in all
  safety the monies entrusted to a broker or agent
  in the course of a real estate transaction.
• To be assured that any deposit is deducted from
  the residual monies to be disbursed upon
  finalization of the sale.
• To be assured that any such monies are totally
  reimbursed if the sale is not concluded.

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• The indemnification claim process

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What are your recourses?

• Address a claim application to the Fund.
• Claim eligibility is studied in light of the
  Funds indemnification criteria.
• Other protection mechanisms, such as disciplinary
  sanctions or professional liability insurance,
  fall within the jurisdiction of the Association
  des courtiers et agents immobiliers du Québec
  (ACAIQ).

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What is the claim indemnification process?

• The consumer files a claim for indemnification by
  completing the designated form.
• It is the consumers responsibility to
  demonstrate to the Fund that his claim is
  justified.
• The Fund investigates the claim, notably by
  asking the broker or agent involved for his
  version of the facts.

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What is the claim indemnification process?

• The Funds board of directors decides on the
  validity of the claim.
• The Funds board of directors establishes the
  amount of the indemnity to be paid.
• By subrogation of the consumers rights, the Fund
  may sue a broker or an agent.

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Important information

• The decision rendered by the Funds board of
  directors is final and cannot be appealed.
• The consumer must file his claim in the year
  following the date he becomes cognizant of the
  facts forming the basis of the claim.

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Important information

• The maximum settlement provided by the Fund is
  15,000 for each eligible transaction.
• The settlement covers the financial losses
  resulting from a fraud, a dishonest transaction
  or the misappropriation of funds or other
  property.
• No indemnification is provided in cases of
  mistakes, errors, omissions or deontological
  misconducts.

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What are the delays involved?

• The delays will vary according to a number of
  factors among which
• Complexity of the claim
• Proof to be collected
• Level of cooperation of those involved
• The Fund informs the parties involved as the
  process unfolds.

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• Case studies

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Case study no 1

• A home buyer pays a deposit of 5,000 to his real
  estate agent who does not transfer the monies
  into a trust account and who cashes the deposit.
  
• Even though the offer to purchase is refused and
  the buyer would normally recuperate his deposit,
  the real estate agent is unable to reimburse him.
  
• The Funds board of directors accepts the buyers
  claim for indemnification and pays him an amount
  of 5,000.

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Case study no 2

• The buyer who has been penalized financially
  presents a claim to the Fund which, at first
  glance, first appears to be eligible.
• However, the Funds investigation reveals that
  the intermediary involved in the real estate
  transaction was neither a broker nor an agent
  member of the ACAIQ.
• The Funds board of directors is thus obligated
  to turn down the claim.

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Case study no 3

• A real estate agent agrees to reduce his
  commission by half to conclude a sale and
  modifies the contract accordingly.
• The agent then deceives the seller by using the
  non-modified version of the contract to be paid
  his full commission.
• Thanks to the modified version of the contract
  provided by the seller, the Fund obtains the
  required proof and indemnifies the seller for
  that portion of the commission that was not
  owing.

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Various statistics
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Global statistics

• Global statistics since the Fund began its
  activities in 1989
• 170 claims for indemnification processed
• 34 claims accepted (20 of claims processed)
• Total claims settled 172,000

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Conclusion

• The Fund is an essential mechanism established by
  the Real Estate Brokerage Act (L.R.Q., c.
  C-73.1) to protect the public.
• A better awareness of the Funds mission and its
  operations by real estate brokers and agents and
  by the general public will assist it in
  accomplishing its mission.

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Contact information

• Fonds dindemnisation du courtage immobilier6300
  Auteuil St., Suite 300Brossard, Québec J4Z 3P2
• Tel. [phone] 440-5110Fax
  [phone]
• E-mail address info_at_indemnisation.org