ww w. fa rciq.c Fonds d'assurance responsabilité professionnelle du courtage immobilier du Québec om A CLAIMS DEPARTMENT THAT SUPPORTS AND PROTECTS YOU BETTER! Since 2006, FARCIQ has been your professional liability insurer, offering you coverage in case of fault, error or omission in the course of your professional activities. FARCIQ’s commitment is to protect you! In cases where a suit is filed against you, FARCIQ will designate a lawyer to represent you, to the extent that the accusations are covered by insurance. At every step and when required, the analysts may be supported by an external team of lawyers and claims adjusters (appraisers, building experts, etc.) to support the investigations and the insured’s defence. DID YOU KNOW? P 66% of claims are taken to court; Sale without legal warranty of quality How to Avoid It The sale of an immovable usually comes with a legal warranty of quality, which is a guarantee against latent defects. However, it is possible to exclude it1 from the contract. This is frequently the case in an estate sale or a repossession. Since the seller has not inhabited the property, it is difficult for him to provide an overall picture of its actual condition, and even more difficult to guarantee it. To exclude liability for latent defects from a transaction, the statement “This sale is made without legal warranty of quality, at the buyer’s risk” must be included in the real estate brokerage contract, the promise to purchase and the detailed description sheet. In this case, the advantage of a waiver of this warranty is a reduced selling price. A A little later… little later… A A little later… little later… haaaa! haaaa! haaaa! haaaa! This house is is part This house part ofThis estate sale. of an estate part an house part This house is issale. I of made good deal, madean a good deal, I of a estate sale. an estate sale. it’s affordable! it’s a good deal, I made aaffordable! I made good deal, it’s affordable! it’s affordable! fo r a ac c crrr c crrrr r c aa crrrr r crrr FARCIQ’s Claims Department is composed of three analysts, all lawyers by training. The team recently expanded to ensure sound management of the claims process. FARCIQ’s analysts support you at every stage of a professional liability claim, in addition to offering you a support and advisory service adapted to your profession. The insurance policy provides that all real estate and mortgage brokers must notify FARCIQ of any situations, allegations or oral or written demand that potentially could lead to a claim, as soon as they are informed of them1. The analyst will decide whether it is necessary to open a file or issue a preventive notice. P In case of a claim filed in Small Claims Court, FARCIQ can help you prepare, particularly in drafting your contestation; P FARCIQ handles over 500 claims a year; P Court proceedings have an impact on your personal credit record (as long as the litigation lasts). Tip from the Pro Make sure you fully understand the implications of a sale without legal warranty of quality and that you explain them properly to the parties (seller and buyer). Along with explaining the consequences of waiving this warranty, it is also prudent to recommend to the buyer that he conduct a more thorough pre-purchase inspection of the property. Remember that the seller must act in good faith and declare all known defects that may affect the value of the immovable, notably by filling out the Declarations by the seller of the immovable form. As you know, As you know, it’sAs an you know, an you know, estate sale… it’sAs estate sale… without anlegalsale… without estate sale… it’s anlegal warranty it’s estate warranty of quality . of quality without legal warranty without legal . warranty of quality . . of quality You didn’t tell You didn’t tell that! Youme didn’t tell didn’t tell Youme that! I’mme going I’m that! me going that! toto I’m going file a claim. file a claim. I’m going toto file claim. file a a claim. Welcome to Fonds d’assurance Welcome to Fonds d’assurance responsabilité Fonds d’assurance responsabilité professionnelle, Welcome to Fonds d’assurance Welcome to professionnelle, How may professionnelle, How may professionnelle, responsabilité I help you? responsabilité I help you? How may I help you? How may I help you? I forgot toto tell my client I forgot tell my client that I forgot to tell my client that the house was being sold the house was being sold I forgot to tell my client without legal warranty being quality without house was being quality that the legal warranty of sold . that the house was of sold . withoutShe is is filing claim.quality . legal warranty of . withoutShe filing a a claim.quality legal warranty of She is is filing claim. She filing a a claim. Send us your documents Send us your documents soSend usstart analyzing so us your documents we can your documents Sendwe can start analyzing so we canyour case. so weyour start analyzing can case. start analyzing your case. your case. 1. If a file is opened, the analyst then will determine whether the allegations are covered by the insurance policy. In the affirmative, the analyst or the claims adjuster mandated by FARCIQ will contact you to obtain all the necessary documents to analyze the file. An investigation is opened when financial compensation is claimed. To help you protect yourself better against a professional liability claim, FARCIQ invites you to pay close attention to The 10 Golden Rules for Brokers and the Prevention Guide, available online at www.farciq.com. It is important that all brokers adopt prudent behaviour to prevent the risks of professional error. LATEST NEWS FROM FARCIQ FARCIQ working to bridge the gap Over the next few months, FARCIQ will be at several events organized by the Québec real estate boards to give you more information and answer all your questions about professional liability. Don’t miss this fall event! 1 Consequences In addition to exposing the client to an unpleasant situation, consider the consequences of this type of error for the broker. If you are held responsible and compensation is paid to the claimant, you will be liable for the deductible on your insurance. You should also know that a court action will have an impact on your personal credit record during the entire length of the dispute, not to mention the loss of time that this will cause you. You’re always better safe than sorry. 1. Article 1732 Civil Code of Québec (C.c.Q.). 2. Once the investigation is completed, the analyst responsible for your file will make a decision and communicate it to the parties (claimants and insured). If liability is incurred, the analyst will discuss with the insured to make a decision regarding the position to be adopted towards the claimant. Art. 5.10 of the insurance policy www.farciq.com Profession Broker September 2013 28 s al e Profession Broker September 2013 29