PERSONAL REAL ESTATE CORPORATIONS

Interpretation 1. In this Regulation, “child”, in relation to a shareholder of a personal real estate corporation, includes a person towards whom the shareholder has demonstrated a settled intention to treat as a child of their family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody; (“enfant”) “controlling shareholder” means, in relation to a personal real estate corporation, the broker or salesperson who owns all the equity shares of the personal real estate corporation; (“actionnaire détenant le contrôle”) “family member” means, in relation to a shareholder of a personal real estate corporation, the shareholder’s spouse, child or parent; (“membre de la famille”) “non-equity share” means, in respect of a personal real estate corporation, a share that is not an equity share; (“action sans droit de participation”) “parent” in relation to a shareholder of a personal real estate corporation, includes a person who has demonstrated a settled intention to treat the shareholder as a child of his or her family, except under an arrangement where the child is placed for valuable consideration in a foster home by a person having lawful custody; (“parent”) “spouse”, in relation to a shareholder of a personal real estate corporation, means a person to whom the shareholder is married or with whom the shareholder is living in a conjugal relationship outside marriage. (“conjoint”) O. Reg. 536/20, s. 1; O. Reg. 358/22, s. 1. Personal real estate corporation, criteria 2. The following criteria are prescribed for the purposes of the definition of “personal real estate corporation” in subsection 1 (1) of the Act: 1. The corporation is incorporated or continued under the Business Corporations Act. 2. All of the equity shares of the corporation are legally and beneficially owned, directly or indirectly, by the controlling shareholder. 3. The sole director of the corporation is the controlling shareholder. 4. The president, being the sole officer of the corporation, is the controlling shareholder. 5. Each non-equity share of the corporation is, i. legally and beneficially owned, directly or indirectly, by the controlling shareholder, ii. legally and beneficially owned, directly or indirectly, by a family member of the controlling shareholder, or iii. owned legally by one or more individuals, as trustees, in trust for one or more children of the controlling shareholder who are minors, as beneficiaries. 6. There is no written provision by agreement or otherwise or arrangement that restricts or transfers in whole or in part the powers of the sole director to manage or supervise the management of the business and affairs of the corporation. Exemption from registration, conditions 3. The following conditions are prescribed for the purposes of subsection 5 (3) of the Act: 1. The personal real estate corporation’s controlling shareholder is employed by a brokerage to trade in real estate. 2. The personal real estate corporation does not carry on the business of trading in real estate other than providing the services of its controlling shareholder to the brokerage. 3. The personal real estate corporation, its controlling shareholder, its non-equity shareholders, its employees or its agents do not represent to the public in any manner, directly or indirectly, that the corporation carries on the business of trading in real estate. 4. The personal real estate corporation does not carry on business as a brokerage. 5. The personal real estate corporation does not receive, directly or indirectly, remuneration for trading in real estate from any person or entity other than the brokerage. 6. The controlling shareholder does not receive, directly or indirectly, remuneration for trading in real estate from any person or entity other than the personal real estate corporation or the brokerage. 7. The personal real estate corporation does not, on behalf of the brokerage, directly or indirectly hold any money or other property of a client, self-represented party or other person in connection with trading in real estate. 8. There is a written agreement between the personal real estate corporation, the controlling shareholder and the brokerage governing the relationship between the brokerage and the corporation and its controlling shareholder. 9. Under the agreement mentioned in paragraph 8, the personal real estate corporation agrees not to, i. hinder or obstruct the brokerage or its broker of record in the performance of their duties under the Act and regulations, or ii. hinder or obstruct the controlling shareholder in the performance of the shareholder’s duties under the Act and regulations. 10. Under the agreement mentioned in paragraph 8, the personal real estate corporation agrees to provide whatever assistance may be reasonably necessary to enable the brokerage and its broker of record to comply with their duties under the Act and regulations and to enable the brokerage and its broker of record to ensure that the controlling shareholder is complying with the shareholder’s duties under the Act and regulations. 11. Under the agreement mentioned in paragraph 8, the personal real estate corporation agrees to provide whatever assistance may be reasonably necessary to enable the brokerage to determine whether the conditions set out in this section are met. O. Reg. 536/20, s. 3; O. Reg. 358/22, s. 2. Remuneration, personal real estate corporation 4. A brokerage may pay remuneration to a person referred to in clause 30 (b) of the Act, if, (a) the person is a personal real estate corporation that is exempt from registration under subsection 5 (3) of the Act; (b) the remuneration has been earned by the personal real estate corporation’s controlling shareholder; and (c) the brokerage has confirmed in writing that the conditions set out in section 3 entitling the personal real estate corporation to the exemption are met. Remuneration restriction exception, s. 31 (2) of the Act 5. A broker or salesperson who is the controlling shareholder of a personal real estate corporation that is exempt from registration under subsection 5 (3) of the Act is entitled to and may accept remuneration for trading in real estate from the personal real estate corporation if the following circumstances exist: 1. The brokerage that employs the broker or salesperson to trade in real estate pays the remuneration for the broker or salesperson to the personal real estate corporation instead of to the broker or salesperson. 2. The amount of the remuneration paid by the personal real estate corporation to the broker or salesperson is not greater than the amount of the remuneration received from the brokerage for the broker or salesperson. Notice to the registrar 6. (1) A broker or salesperson who is the controlling shareholder of a personal real estate corporation that is exempt from registration under subsection 5 (3) of the Act shall, before the personal real estate corporation receives any remuneration from a brokerage, provide written notice to the registrar of the following information: 1. The legal name of the personal real estate corporation. 2. The address for service of the personal real estate corporation. (2) A broker or salesperson referred to in subsection (1) shall notify the registrar in writing of any change in circumstances that would affect the personal real estate corporation’s eligibility for the exemption from registration or any change to the information in subsection (1) within five days after the change takes place. Requirement on broker, salesperson re: non-exempt corporation 7. (1) This section applies with respect to a broker or salesperson who is the controlling shareholder of a personal real estate corporation that is not exempt from registration under subsection 5 (3) of the Act because one or more of the conditions listed in section 3 of this Regulation is not met. (2) The broker or salesperson shall ensure that the corporation, if not registered as a brokerage, does not perform an action for which registration is required. 8. Omitted (provides for coming into force of provisions of this Regulation).