Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

July 6th - 2004

Draft REBBA regulations lengthens time for trust monies deposit

Proposed regulations will give brokerages an extra three day leeway to deposit money in trust accounts.

Proposed regulations will give brokerages an extra three day leeway to deposit money in trust accounts. The proposal, part of the draft regulation on registration and other matters relating to the Real Estate and Business Brokers Act (REBBA), 2002, would allow brokerages five business days to deposit money in trust, up from the two banking days currently mandated.

While the change would be an improvement, some groups commenting on the changes would like to see the requirement to deposit cheques in a trust account eliminated except in the case when an offer has been accepted. For brokerages it would mean not tying up funds of prospective buyers, especially those whose bids are unsuccessful.

Along with trust accounts, the draft regulations, released at the end of May, address a wide range of issues including registration, educational requirements, insurance, and procedures of the Real Estate Council of Ontario (RECO) Discipline and Appeals Committees.

Registration
The regulations spell out the conditions and requirements for registration to trade in real estate. In addition, it sets out the grounds to deny an applicant registration or renewal, and specifies 12 months as the waiting time before which denied applicants can reapply. These grounds take into consideration the applicant's previous professional conduct, and financial responsibility.

Other changes in registration to note include: requiring a salesperson to be "actively employed" for 24 months prior to registration as a broker and requiring registrants to register trade names or nicknames under the Business Names Act. Registration certificates will still be issued.

Added insurance
To assist with the management of the brokerage and to deal with problems or infractions in practice, a provision has been made for each brokerage to appoint a "Broker of Record." This appointee will "take reasonable steps to deal with any failure to comply with the Act or regulations."

Such "steps" may deal with matters such as withholding commissions in the cases of registrants "brokers or salespersons" who fail to pay the errors and omissions insurance premiums as proposed in the draft regulations

The draft regulations have some provisions that will prove problematic for the industry. Among these, says real estate lawyer Merv Burgard, Q.C., are proposals surrounding trust money. The draft regulations call for extensive tracking of trust money transactions, and state that "If a brokerage determines that there is a shortfall in the trust account maintained under section 27 of the Act, the brokerage shall immediately deposit sufficient funds in the account to eliminate the shortfall." What the draft does not take in to consideration, says Burgard, is that a shortfall could result from a bounced cheque, or other reason that is out of the hands of the brokerage.

Other changes in the draft rules include:

  • permitting multiple representation of clients; and
  • mandatory inclusion of non-registrants on discipline panels.

OREA submitted comments on the proposed regulation at the end of June to address provisions that would be problematic in interpretation or application. To view the draft regulations, including the first part dealing with the Code of Ethics, go to the Ministry of Consumer and Business Services' web site at www.cbs.gov.on.ca. Realtor Edge reported on the Code of Ethics in our June issue.

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No big changes for real estate in new budget Hotsheet

For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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