Buying and selling a home is often one of the biggest financial transactions an individual will engage in, in their lifetime. Regardless of whether someone is the seller or purchaser, they will often either work with, or at least speak with, a real estate agent at some point during the transaction. However, what recourse is available if something goes awry during the process?

It is important for any party in a real estate transaction to understand which body governs real estate agents in Ontario, what happens when an individual files a complaint, and what the potential outcomes might be.

What is “Professional Regulation”?

Professional regulation is a blanket term for the regulation of different professions. Professional regulation organizations monitor the actions taken by professionals in a specified field, to protect the public and, when appropriate, undertake investigations and disciplinary action against those professionals if they are accused of wrongdoing.

Many common professions are regulated, including lawyers, engineers, accountants, health professionals, social workers, and of course, real estate agents.

What Does a Real Estate Agent Do?

Real estate agents help clients buy and sell residential and commercial homes and properties. While hiring a real estate agent is not required, choosing to utilize their services and expertise can often make the process run much smoother.

If someone is interested in purchasing a property, a real estate agent can help you determine what type of property you are looking for, complete market research to identify potential properties, and arrange viewings. Once an offer has been made, they can coordinate inspections, negotiate with the seller on your behalf, draft the purchase and sale agreement, and help you get through the closing process with a real estate lawyer.

When selling a property, a real estate agent can help you determine the appropriate asking price based on their experience and undertaking competitive research, identify how to market your property (including staging and photography), list the property on your local Multiple Listing Service (MLS), set up open houses and viewings, draft relevant documents, and communicate with third parties, such as appraisers and home inspectors.

The Real Estate Council of Ontario (RECO)

Real estate agents are regulated by the Real Estate Council of Ontario (hereinafter referred to as “RECO”). RECO regulates all real estate salespeople and brokers in Ontario, and monitors real estate transactions on behalf of the Ontario government.

Before a real estate agent can offer services in Ontario, they must be approved by RECO. To do so, an aspiring real estate agent must first complete the required education and exam requirements. They will then apply to RECO and purchase the appropriate insurance coverage.

What Types of Complaints Are Filed Against Real Estate Agents?

A complaint might be filed against a real estate agent for a number of reasons. If an individual chooses to file a complaint, they will do so through the Real Estate Council of Ontario. RECO has created an impartial complaint and assessment process to handle concerns raised by the public, including other real estate practitioners.

Members of the public may file complaints against real estate agents for several reasons. Some of the more common complaints include the following:

  • Providing real estate agent services without a license
  • Misleading advertising
  • Improperly handling real estate deposits
  • Not acting in the best interests of the client
  • Misrepresentation of a property
  • Acting beyond the scope of the authority provided by the client

How Are Complaints Filed?

Members of the public can file complaints against real estate agents through the RECO website or by requesting a physical complaint form from RECO. Individuals are not required to determine whether the real estate agent has broken the law or violated RECO’s regulations or Code of Ethics.

The individual filing the complaint will need to provide the following information:

  • Their personal information;
  • The name and contact information of the real estate agent they are submitting a complaint about;
  • A description of the complaint; and
  • Any documents necessary to support the complaint.

How Are Complaints Handled By RECO?

When RECO receives a complaint against a real estate agent, they will start by reviewing the submitted complaint and determining whether they have the authority to deal with it. Keep in mind that, as a professional regulator, RECO only has authority to handle certain complaints. If RECO does not have the authority to address a specific complaint, legal recourse may still be available to the complainant through other means.

If RECO has the authority to handle the complaint, they will notify the real estate agent of the complaint and will provide them with the submitted supporting documents. The real estate agent then has the opportunity to respond to the complaint and provide their own supporting documents.

Once RECO has information from the complainant and the real estate agent, they will further investigate the complaint to determine whether the real estate agent acted appropriately in the circumstances.

Possible Outcomes and Disciplinary Actions

After the Real Estate Council of Ontario has completed their investigation, they will render a determination based on their findings and the severity of the complaint.

For example, where possible, RECO may impose a warning or require the real estate agent to undergo additional training without holding a disciplinary hearing. For more serious cases, RECO will hold a formal disciplinary hearing. These administrative hearings resemble a court trial, and RECO will retain a lawyer to act on their behalf. Real estate agents can also retain a professional regulation lawyer to assist them.

If the real estate agent is found “guilty”, they can face disciplinary consequences, including mandatory courses , a fine of up to $50,000, and payment of costs. In extreme circumstances, a real estate agent may even be prosecuted in Provincial Court. In these circumstances, they can face a fine of up to $50,000 or a prison term of up to two years.

Contact the Oakville Professional Negligence Lawyers at Campbells LLP

If you have questions about any real estate services you’ve received, or you’re a professional who has been accused of misconduct, it’s important to speak with an experienced lawyer to understand your rights and how to protect them. At Campbells LLP, our lawyers have significant experience with both professional negligence matters and real estate litigation. We leverage our deep knowledge to advocate on behalf of both professionals and individuals as we understand how detrimental certain outcomes may be. We are thorough, efficient, and committed to delivering the best possible outcome for every client. To schedule a consultation, contact us online or call us at (905) 828-2247.