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

Buying a real estate brokerage in Nova Scotia means dealing with the Nova Scotia Real Estate Commission and its Registrar. The Commission says the Real Estate Trading Act establishes it as the regulatory body for real estate in the province. Its published steps for opening a brokerage begin with the people involved: someone must hold a broker licence, or the owner must plan to hire a licensed broker to manage the brokerage. Those steps describe opening a brokerage, not buying one, so use them as a checklist of what the business has to hold and ask the Commission how a change of ownership is handled. For the general sequence of any purchase, see how to buy a business in Canada.

Who regulates a brokerage in Nova Scotia

The Commission describes itself as the regulator of the Nova Scotia real estate industry, and it publishes the Real Estate Trading Act, its regulations, a Commission By-law and Commission Policies. Its Registrar approves a brokerage’s name and signage, and its compliance team schedules the closing audit when a broker licence ends. Ask the seller for the current licence and any correspondence with the Registrar. The Commission’s own pages are the place to confirm the By-law and Policies that apply on the day you sign; a licence suspension notice on its site cites both the Act and the By-law.

Who must hold the broker licence

The first step the Commission lists for opening a brokerage is to hold a broker licence or plan to hire a licensed broker to manage it. For a buyer who is not a licensed broker, that raises a practical question before closing: who will be the licensed broker on day one, and are they already in place? Ask the seller whether the current broker will stay after closing and on what terms. Ask the Commission whether a buyer’s own licence application or a notice of change is needed. The Commission’s page does not say what happens to a brokerage licence when ownership changes, so do not assume it carries over.

Name, signage and the Registry of Joint Stock Companies

The Commission requires the Registrar’s approval of the brokerage’s name and signage. A name must follow the Commission’s naming rules, and it cannot be the same as another brokerage’s or identical to or easily confused with another business’s name. Once the Registrar approves it, the brokerage registers with the Nova Scotia Registry of Joint Stock Companies, and the registered name must match the approved name. The full name, exactly as on the licence, must appear in all advertising, including for-sale and for-lease signs. If you plan to rebrand, ask the Registrar how a name change is approved. The Registry says a business must reserve a name before it can register, incorporate or change an existing name.

The trust account

A Nova Scotia brokerage must open an interest-bearing trust account at a Nova Scotia financial institution. The account is in the brokerage’s name followed by “Real Estate Trust Account”, and that name must appear on all trust account records. The bank must be instructed to remit the interest earned on trust funds to the Commission semi-annually, using the Commission’s form. Proof of the account, such as a bank letter or statement, goes in with the brokerage licence application. If the seller’s corporation keeps its existing account, ask for the bank letter and the trust records. If a new account is needed, ask how and when funds move.

Branch offices and approved sales corporations

The Commission says all permanent business locations where licensees work, including satellite offices, kiosks and project offices, must be registered as branch offices, and each one needs a service address in Nova Scotia. Compare the seller’s list of locations with the Commission’s record. The Commission says an Approved Sales Corporation licence allows an individual licensee to receive commission income through a registered corporation. That licence cannot exist on its own, expires on June 30 each year like all real estate licences, and ends automatically if the licensee terminates their licence. A licensee who changes brokerages must terminate and reinstate it.

If the seller closes the brokerage instead

The Commission’s steps for closing a brokerage show the order of events if a seller winds up rather than sells. The licences of all individuals, including any Approved Sales Corporations, are terminated by a Notice of Termination, or the licensees terminate them themselves. The broker or broker owner can then submit a Notice of Termination for the broker licence, which effectively terminates the brokerage licence. Advertising, including signage, websites and social media, must be removed as soon as licences end. Then the compliance team schedules a closing audit. Ask the seller which of these steps the deal assumes, and whether any audit is open.

• The current broker licence and brokerage licence, with the Registrar’s name and signage approval and the Registry of Joint Stock Companies registration in the same name.
• The trust account letter or statements and the trust account records, and any Commission audit correspondence.
• The list of branch offices with service addresses, matched against what the Commission has registered.
• A list of licensees and any Approved Sales Corporations, with renewal dates.
• The brokerage’s anti-money-laundering records: FINTRAC says real estate brokers and sales representatives must meet obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act when they act as agent for a purchaser or vendor.