The number of claims made to the Fonds d'indemnisation du courtage immobilier has more than doubled in 2006 compared to last year. The Fonds d'indemnisation du courtage immobilier is responsible for indemnifying victims of fraud, dishonest transaction or misappropriation of funds by a real estate broker or agent within a real
estate brokerage transaction.
"To date we have received twice as many claims as last year and we expect more than sixty to be filed in total for the year," states Me Paul Mayer, Chairman of the Board of the Fonds d'indemnisation du courtage immobilier. "Despite this, the number of claims remains relatively low if we compare it to the thousands of real estate transactions carried out each year by real estate brokers and agents in Québec."
In 2005, the Fund received 22 indemnity claims as compared to a total of 11 in 2004. The number of claims made to the Fonds d'indemnisation du courtage immobilier for fraud has been on the rise over the last few years.
"Among other things, this situation can be explained by the strength of the real estate market and by the record number of transactions over the last few years, points out Me Mayer. We also believe that the increase is, in large part, the result of a heightened awareness of the Fonds d'indemnisation du courtage immobilier and its mission by the public and all the parties involved in the real estate transaction."
A victim of grow-op houses indemnified
One real estate fraud incident that received the most media coverage during the last year was the resale of grow-op houses. This fraud, which consists of reselling a property to which damages caused by marijuana growing are covered up, was also indemnified by the Fund.
The Fund recently compensated a buyer who was not informed by his agent that the house he bought was used in a marijuana growing operation, even though the real estate agent was aware of the fact. Because of this growing operation, the property had damages, in particular to the electrical mast, which had to be replaced. After investigation, the Fonds d'indemnisation du courtage immobilier indemnified the buyer for the replacement cost of the electrical mast.
A victim of a dishonest transaction is indemnified for $15,000
In another case, a real estate agent convinced his client to buy two properties that he owned and was able to get a much higher sales price than their value by concealing essential information regarding the evaluation of these properties and the income they produced. Following its investigation, the Fonds d'indemnisation du courtage immobilier compensated this person for the amount of $15,000.
Eligibility of claims
Despite the record number of claims received, several that were sent to the Fund did not meet the eligibility requirements prescribed by the Real Estate Brokerage Act and thus had to be denied.
The most important requirement to meet is that the Fonds d'indemnisation du courtage immobilier covers only cases of fraud, dishonest transactions and misappropriation of funds committed voluntarily by real estate brokers or agents. The Fund does not cover cases of fault or error, which are covered through the new Fonds d'assurance responsabilité professionnelle de l'Association des courtiers et agents immobiliers du Québec (FARCIQ). As well, the Fonds d'indemnisation du courtage immobilier's mission is to protect only those consumers who carry out their transaction through real estate brokers or agents.
More information on the protection offered by the Fonds d'indemnisation du courtage immobilier is available on the Fund's Web site at www.indemnisation.org . You can also contact the Fund by email at info@indemnisation.org , or by phone at (450) 676-4800 or toll-free at 1 800 440-5110.
About the Fonds d'indemnisation du courtage immobilier
The Fonds d'indemnisation du courtage immobilier is an organization which began in 1985 in accordance with the Real Estate Brokerage Act (R.S.Q., c. C-73.1). The Fund's mission is to indemnify victims of fraud, dishonest transactions and misappropriation of funds or other property which, under the Act, must be deposited in a trust account, when a real estate transaction is performed through a real estate broker or agent.
