This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

Background

OREA has been calling on the Government of Ontario to allow for designated representation since 2017. We took that position when the previous Liberal government was consulting on a multiple representation ban. Instead of a ban, OREA proposed a model which would permit two agents at the same brokerage to represent both a buyer and seller in a single transaction.

Q: What is multiple representation and why is OREA calling for its optional practice in Ontario?

Definition of Designated Representation

Designated representation is not anything new as a business model because it is used by brokerages in other provinces, like Alberta and Nova Scotia. It allows a brokerage practicing designated representation to have the option to work with both the buyer and the seller in a single transaction. The proposed model of designated representation says that the duty owed to the clients would apply to the designated agents within a brokerage for the specific, identified transactions, not the brokerage and all of its REALTORS^®.

Example

ABC Realty Inc. has a listing, and the brokerage also happens to represent a buyer that is interested in that listing. In other words, the brokerage represents the seller and the buyer. Today, that is known as multiple representation. In the proposed designated representation model, the listing agent would be able to represent the seller, while another agent at ABC Realty Inc. would represent the buyer on behalf of the brokerage to advocate solely for the buyer. The Brokerage would retain oversight responsibility for the designated agent's fulfillment of the duties to the clients.

Q: Why is designated representation a good practice for both REALTORS^® and consumers?

Key Points

• Brokerages are allowed to select either a brokerage representation agreement or a designated representation agreement on a transaction-by-transaction basis.
• The type of agreement is to be determined at the beginning of the transaction.
• Multiple representation can still occur. Under designated representation, multiple representation occurs when the same designated representative represents more than one client in the same trade.
• Consent for multiple representation must be obtained as soon as the brokerage is aware it is in multiple representation.
• REALTORS® are required to disclose the differences between the obligations of the brokerage and designated representative if only one client is represented, with specific reference to the duties, services, and remuneration agreements.

Q: What happens under TRESA when a brokerage represents both a seller and a buyer in multiple representation?

Multiple and Designated Representation (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

Definition of Self-Represented Party (SRP)

Under REBBA, there were two definitions which REALTORS® had to know – client and customer. The Ministry felt that these two terms were confusing for the public, so the term customer was removed entirely from TRESA. Under TRESA, there are two terms – client and self-represented party (SRP). An SRP is simply a party who is not a client of any brokerage.

Q: Where can I find the Information and Disclosure to Self-Represented Party Forms?

• A: RECO provides and maintains the Information and Disclosure to Self-Represented Party Forms for both Designated Representation and Brokerage Representation. Both can be accessed by visiting RECO’s website at reco.on.ca:
• Designated Representation Version
• Brokerage Representation Version

Q: Why is the government introducing the new consumer designation of ‘self-represented party’, effectively eliminating the customer relationship, and why is this ultimately better for consumers?

Q: How does the new self-represented party designation differ from the customer designation that currently exists under REBBA?

Example

There are two instances where a self-represented party (SRP) could interact with the REALTOR^® without the interaction giving rise to an implied agreement between the REALTOR^® and the SRP.

First, an SRP can receive general information relating to the business of trading and real estate, like general real estate market statistics. Second, a REALTOR^® could provide assistance to an SRP if that assistance is a service to their client, for example, as the seller’s representative showing that listing to an SRP. However, the SRP has engaged for services only, not a duty of care. Should the SRP wish to purchase the property, the REALTOR® is not permitted to provide any advice, otherwise you have created unintended agency by the SRP relying on your skill and judgment.

Q: Is there a list of activities that represents the "assistance" that is allowed to be provided to a self-represented party under TRESA?

Key Points

How to engage with a self-represented party

Per Section 10 of the Code of Ethics, REALTORS^® will be prohibited from providing services, opinions or advice to an SRP.

However, as a service to the REALTORS^® client, assistance may be provided to an SRP after:

• The self-represented party has received the mandatory RECO information guide
• And the self-represented party acknowledgement from prepared by RECO has been provided
• It is the responsibility of the REALTOR® to provide and explain the documents to an SRP

Q: Do you have any advice on how to convert a self-represented party into a client?

What is the SRP acknowledgement form and how do I execute this form?

• The SRP Acknowledgement Form is a disclosure that the brokerage will be representing a client with respect to the trade. For instance, if there is an SRP that is the buyer for a client’s listing, the form will disclose that relationship.
• The form outlines the risks that may arise after an SRP receives assistance from the brokerage and the types of assistance that the brokerage will be permitted to provide an SRP.
• The form recommends the SRP seek independent professional advice before receiving assistance from the agent.
• Once the form is signed and executed, REALTORS^® are required to return a copy of the form to the SRP.
• The form is maintained and provided by RECO – the form for both designated and brokerage representation are available for download on RECO’s website.

Q: If there is no representation agreement with a self-represented party, are they required to sign anything during a real estate transaction?

Self-Represented Party (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

Definition of Transparent Offer Process

In TRESA, sellers have another option to negotiate the sale of their property. If the seller directs the brokerage, the TRESA general regulations allow for the details of competing offers to be shared with other buyers. No personal information may be disclosed or any other information that would identify the person making the offer. It is important to note that it will still be a requirement for a brokerage to disclose the number of registered offers to competing buyers.

Q: What happens if the seller decides to change their mind halfway through the transaction and goes from a closed to a transparent offer process or vice-versa? Can the buyer withdraw their offer?

Q: What type of information can a seller disclose to other buyers during a transparent offer process transaction?

Sharing Contents of Offers (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

TRESA implements some changes to the contents of written agreements and outlines new requirements for disclosures.

Q: What are the new rules surrounding disclosures under TRESA?

Key Points

Listing agreement and the remuneration payable to any other brokerage

• OREA’s existing standard form includes a space to insert the cooperating brokers' commission. However, it is the decision of the seller about how much remuneration is payable to any other brokerage and needs to be a conversation that happens between the listing brokerage and the seller.
• The contents of written representation agreements must clearly outline the circumstances where the payable remuneration may change. In practice, this could occur where the listing brokerage reduces their remuneration if the listing agent also represents a buyer in a transaction. Any circumstance for a change to remuneration should be clearly identified on a written representation agreement.

Q: What changes can we expect to the contents of written agreements under TRESA?

Services provided by a brokerage or designated representative and the expiry date of the agreement

• Advise you on market conditions and the best strategy to attract buyers and get the best price for your home
• Assist you with getting pre-approvals for financing so you know how much you can afford

TRESA requires disclosures on:

• Multiple representation
• Material facts and latent defects
• Conflicts of interest
• The existence of a Seller Property Information Statement (SPIS).

TRESA regulations also require:

• Disclosures to be written and in clear and concise language
• REALTORS^® must use their best efforts to obtain a written acknowledgement from the client indicating the disclosure has been received
• Once the written acknowledgement is signed, a copy will then need to be provided to the client

Q: What are common examples of disclosures in a real estate transaction and are there any new disclosures that are required to be made under the Act?

Changes to Written Agreements and Disclosures (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

The Real Estate Council of Ontario (RECO) provides the information guide for consumers. The information guide prepared by RECO is mandated and is the only acceptable version of the information guide. Brokerages are not permitted to create their own information guide.

Q: What is the new information guide and when should I give it to my real estate consumer?

Key Points

• REALTORS^® are mandated to provide consumers with an information guide and explain the contents of the guide before providing any services.
• OREA worked with RECO and the Ontario Government to launch the new information guide, available online at reco.on.ca

Q: Where does the information guide come from, and do real estate consumers have to acknowledge its receipt in any way?

Consumer Information Guide (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

Updates to the Code of Ethics

The new TRESA Code of Ethics have been updated so that the ethical requirements are retained within the Code but all of the technical and procedural requirements have been moved to the general regulations or other regulations. This means that the Code of Ethics truly articulates the requirements that REALTORS^® must comply with related to integrity, quality of service and conflicts of interest. As a result, the new Code of Ethics is much smaller compared to the old.

Q: What are some of the changes that we can expect from the new REALTOR^® Code of Ethics under TRESA?

Updates to Code of Ethics (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

Changes to RECO’s Discipline Process

The introduction of TRESA was a result of OREA’s own advocacy to set the highest real estate standards in North America and to crack down on bad actors in our profession. In addition to the new legislative and regulatory standards enacted by TRESA, the scope of RECO’s discipline committee was expanded.

Key Points

The RECO discipline committee will now have the ability to:

• Suspend, revoke, or apply conditions to a registration
• Investigate a REALTORS^® conduct and refer the matter to the discipline committee whether a formal complaint is made or not

The composition of the discipline committee consists of five or more members and at least one of those members must have no connection to the real estate industry. Any appeals of RECO discipline committee decisions will be to the License Appeal Tribunal (LAT), an independent quasi-judicial tribunal, rather than RECO’s appeals committee. The resulting discipline, including the reasons for revocation or suspension of a registration, will be made available to the public.

Updates to the RECO Discipline Process (PDF)→

This article details how the new legislation will impact REALTORS®. To see how these changes will affect Standard Forms please visit The Forms Knowledge Hub.

The Importance of TRESA

Q: What is the significance of TRESA regulations, not only for Canada, but specifically the province of Ontario?

Updates to Registration Status

Under TRESA, real estate professionals can now relate to the terminology consumers have always used. Anyone in good standing with the Canadian Real Estate Association (CREA) can use the term REALTOR^®in their ads and social media platforms.

Q: How is the registration status different under TRESA?

Updates to Drip Campaigns

Many REALTORS^® send new listings to prospective buyers via a ‘drip campaign’. Under the new TRESA, this practice of sending listings to a prospective buyer in real time would continue to be permitted.

Q: Have the rules around ‘drip campaigns’ for prospective buyers changed under TRESA?