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

In Newfoundland and Labrador, real estate brokers are licensed under the Real Estate Trading Act, and the province’s Real Estate Regulation office at Government Services handles and mediates complaints about agents and salespersons to ensure compliance with the Act and its Regulations. The province’s licensing page says an applicant’s permanent office in the province must be satisfactory to the Superintendent. The page describes applying for a licence rather than buying a brokerage, so the sources read for this page do not say how a licence is handled on a sale. Ask the Superintendent’s office before you sign. For the general sequence of any purchase, see how to buy a business in Canada.

Who regulates a brokerage in Newfoundland and Labrador

The province’s Real Estate Regulation office is part of Government Services. It handles and mediates complaints involving the actions of real estate agents and salespersons. Both that office’s complaints page and the broker licensing page are published by Government Services. Ask the seller for the brokerage’s licence and any complaint correspondence. The licensing page also links a Real Estate Recovery Fund application, so ask your lawyer how the fund relates to the brokerage you are buying.

Broker and restricted broker licences

The province defines a Real Estate Broker as a person who, by themselves or through one or more officials or salespersons, trades or purports to trade in real estate on behalf of themselves or another. A Real Estate Restricted Broker trades only on their own behalf. Confirm which licence the seller holds and which one the deal assumes, because the examination requirement differs between the two.

The designated representative

A corporation or partnership applying for a licence must designate a person to act as its designated representative. For a Real Estate Broker’s licence, that individual must be actively engaged in real estate and must meet the qualifications to write and successfully complete the Real Estate Broker’s examination. There is no examination requirement for a Real Estate Restricted Broker’s licence. If the current designated representative is the seller, ask who will fill the role after closing, and whether that person already qualifies. A buyer who is not in the industry should ask this question first.

Corporate applicants and the Registry of Companies

If the applicant is a corporation, the province requires a copy of the Certificate of Incorporation issued under the Corporations Act, and it refers applicants to the Registry of Companies for additional information. In a share purchase the corporation is the same legal entity after closing. In an asset purchase a new or different entity may be the applicant. The licensing page does not address either case, so ask the Superintendent’s office which one it would treat as a new application and which as a change to an existing licence. Ask the seller for the certificate and any registry filings.

Local office and address for service

An applicant for a licence must maintain a permanent office in the province that is satisfactory to the Superintendent. The applicant must also give a current address for service in the province. A document sent or served under the Real Estate Trading Act or Regulations is considered sufficiently sent or served if delivered personally or mailed by registered mail to the licensee at that address. If the seller’s office lease or address for service will not carry over, plan how the buyer will keep a satisfactory office and make sure official mail reaches the right person.

Licence term and annual filings

Licences issued under the Real Estate Trading Act remain in effect, subject to the filing of annual reports and payment of an annual fee prescribed by the Minister, until withdrawn by the registered person or suspended or cancelled under the Act. The province says the annual filing is due on the last day of the month twelve months from the effective date of the original licence. Ask the seller for proof that every annual report and fee has been filed, and for any notice of suspension or cancellation.

• The licence, showing the licensed broker or restricted broker and the designated representative.
• Proof of the designated representative’s qualification, and a plan for who fills the role after closing.
• The Certificate of Incorporation and any Registry of Companies filings, if the licence holder is a corporation.
• Evidence of the permanent office and the current address for service, and each annual report filed.
• The brokerage’s anti-money-laundering records under the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which FINTRAC says apply to real estate brokers and sales representatives.