How to buy a real estate brokerage in British Columbia: licences, ownership rules and what transfers

Buying a real estate brokerage in British Columbia means working inside the Real Estate Services Act (RESA). Licence applications under the Act go to the superintendent, the BC Financial Services Authority (BCFSA) makes rules under it, and BCFSA publishes guidance on how RESA applies to sales of businesses. British Columbia builds a brokerage around its managing broker: the brokerage licence is tied to the people licensed in relation to it. This page covers British Columbia’s Act only. For the general process, start with how to buy a business in Canada, and for the category, see professional services businesses for sale.

What the brokerage licence is

RESA sets out four licence levels: brokerage, managing broker, associate broker and representative. A brokerage is the licensee on behalf of which other licensees must provide real estate services. An individual may be licensed at any level, but unless the regulations permit otherwise, a partnership or corporation may be licensed only as a brokerage. Subject to the rules, a brokerage must also hold a brokerage licence for each branch office from which it operates. When you count what you are buying, count each licensed office, not just the head office.

The managing broker keeps the licence alive

Subject to the rules, a brokerage must have one or more managing brokers licensed in relation to it, and it may only provide the real estate services its managing broker’s licence permits. The managing broker acts for the brokerage for all purposes under the Act and is responsible for the control and conduct of its real estate business. If the licence of the only managing broker becomes inoperative, or is suspended or cancelled, the licences of the brokerage and its related licensees become inoperative at that same time, subject to the rules. A licensee must not provide real estate services while the licence is inoperative or suspended. Ask who the managing brokers are and whether the seller is the only one. If so, ask a lawyer how a replacement managing broker would be licensed in relation to the brokerage before closing day.

Licensees belong to one brokerage

A managing broker, associate broker or representative must be licensed in relation to a single brokerage and engaged by it, unless the rules permit a managing broker to be licensed for affiliated brokerages. These licensees must not provide real estate services other than on behalf of that brokerage, and must not accept remuneration from anyone else for real estate services. If a licensee ceases to be engaged by the brokerage, the person’s licence becomes inoperative. An asset purchase that moves the team to a new brokerage should therefore be mapped licensee by licensee, and on application the superintendent may, if satisfied the person is otherwise still qualified, reinstate the licence with the necessary amendment if the person is engaged by another brokerage. The Real Estate Services Regulation adds that a personal real estate corporation may be licensed only in relation to the same brokerage as its controlling individual, so ask which licensees work through one.

Owners who are not licensed

RESA limits what an unlicensed owner may do. A brokerage must ensure that a director, officer or shareholder of a corporate brokerage does not train or supervise its licensees unless that individual is licensed in relation to the brokerage. The same applies to partners and to a sole proprietor. BCFSA can also make rules on how these individuals may be involved in the brokerage’s operations. A new brokerage licence application must identify the proposed managing brokers, and a corporate applicant must satisfy the superintendent that its directors and officers are of good reputation. A buyer who is not licensed should ask a lawyer how those limits apply to the role the buyer plans to take.

Selling the business around the licence

RESA lets BCFSA make rules respecting the winding up of a brokerage or the transfer of its business, including requiring the appointment of a managing broker or other person to direct the winding up or transfer. Ask BCFSA which rules apply to your deal. BCFSA’s sale-of-business guidance says that where real estate is included in a basket of assets in an asset sale and a licensee facilitates it, RESA applies. Its consumer guide says no licence is needed to facilitate a sale of all of a company’s shares where the business owns or leases no real property. A brokerage that leases its office should ask BCFSA whether that statement fits.

• Each brokerage licence, including every branch office licence, and any conditions on it
• The list of managing brokers licensed in relation to the brokerage
• Each licensee’s licence and confirmation that the person is engaged by the brokerage
• The register of directors, officers and shareholders, and who supervises licensees
• Any correspondence with the superintendent or BCFSA about conditions, complaints or rules