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Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

May 4th - 2011

LEGAL BEAT: License to sell - Registration protects public by supervising mortgage brokers

Mr. Guido and his company worked to assist people with marketing and financing.

Mr. Guido and his company worked to assist people with marketing and financing. They prepared a professional marketing plan for the purposes of obtaining financing in the range of $4.5 to 5.5 million for a proposed 45-unit retirement project. The applicable Mortgage Brokers Act of Ontario dealt with the concept of "dealing in mortgages."

The judge concluded that this plan was an integral step in the process of obtaining mortgage financing. Since neither the individual nor his company was registered as mortgage brokers, they were disqualified from collecting a fee.

They appealed this decision. Their lawyer argued that the trial judge in the initial case erred in finding that they were disqualified from collecting a $10,000 fee in default of registration as brokers under the Act. The appellants’ lawyer pointed to the absence of any specific disqualification as exists in other legislation such as the Real Estate and Business Brokers Act, 2002, which states:

No action shall be brought for commission or other remuneration for services in connection with a trade in real estate unless at the time of rendering the services the person bringing the action was registered or exempt from registration under this Act and the court may stay any such action upon motion.

The judge stated that "My reading of the Act supports the proposition that it creates an elaborate regulatory scheme to protect the public from incompetent or unscrupulous mortgage brokers. Supervision by way of registration is the ‘raison d’être’ of the legislation. I am satisfied it would be contrary to public policy to permit these appellants to enforce payment of this fee."

1079022 v Market Leadership 2009 CanLII 25607

MERV’S COMMENTS
The new Ontario legislation is called the Mortgage Brokerages, Lenders and Administrators Act (MBLAA), 2006. There is now a specific disqualification in section 12 for mortgage brokers in the absence of being licensed under that Act.

The appellants were not registered under MBLAA or REBBA 2002. Whether you are a consultant, or even a REALTOR®, you must be licensed under that legislation to deal in mortgages and to collect a commission. If you want to walk like a duck and to get paid for walking like a duck, get a duck license.

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Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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