On March 4, 2020, the Trust in Real Estate Services Act, 2020 received Royal Assent, amending the Real Estate and Business Brokers Act, 2002. REBBA governs real estate brokerages, brokers and salespersons (registrants) in Ontario, and its regulations are administered and enforced by the Real Estate Council of Ontario.
The Ministry of Government and Consumer Services previously consulted with stakeholders on the first phase of draft regulations and is now consulting on the second phase of draft regulations needed to bring additional provisions of TRESA into force. These draft changes are intended to strengthen the consumer protection laws that deal with trading in real estate in Ontario and enhance the experience for consumers.
These draft changes include the following:
New Code of Ethics Regulation
The Ministry first consulted publicly on a proposed updated, principle-based Code of Ethics (the “Code”) from June 1 through July 2, 2021. Informed by the feedback from that consultation, the Ministry is proposing further updates to the principle-based Code and is bringing them forward now in conjunction with related regulatory proposals. This proposal includes moving technical and procedural requirements in the current Code to other regulations under REBBA. Updates to the Code will provide standards that agents and brokerages are required to follow to manage transactions in an ethical and transparent way.
The Ministry is proposing changes to give the public more choice in the real estate trade process by allowing a registrant to conduct an open offer process and disclose the details of competing offers at the seller’s direction. Registrants could not disclose any personal information or identifying information through this process.
Information and Disclosure Obligations
The Ministry is proposing changes to improve the information registrants must provide to buyers, sellers, and others in relation to providing real estate services.
Under the proposed changes, agents would have to give prospective clients a consumer guide, published by the Real Estate Council of Ontario, who are considering using their services. The guide would include information to help consumers choose a brokerage and outline key decisions they should be prepared to make, among other things.
This change is intended to help the public understand their choices for engaging or interacting with a registrant, as well as the different obligations registrants have under the different forms of engagement or interaction.
Real Estate Council of Ontario Powers and Tools
Changes are being proposed to help RECO operate more efficiently and focus its compliance and enforcement efforts where they are needed and most effective. The proposed changes would give RECO greater jurisdiction and give added protection to consumers, including:
- Updates to the rules about the information RECO must make publicly available
- Specifying the purposes for which the Registrar can require registrants to provide transactional data and related information to the Registrar
- Providing the Registrar with additional authority over administrative matters related to certain advertising, record-keeping and notice requirements.
New Discipline Committee Regulation
The Ministry is proposing to create a new regulation dealing with the rules and procedures of the Discipline Committee, incorporating the relevant provisions currently found in the Code and General Regulation.
The Ministry is proposing regulation changes to add a condition to the exemption for auctioneers. The draft regulation proposes that as a condition to qualify for the exemption, an auctioneer must have no duties other than receiving, managing and recording competing bids and accepting the highest bid as part of an auction bidding process.
The ministry is also proposing to proclaim certain provisions of the Trust in Real Estate Services Act, 2020.
Regulatory Impact of Proposed Changes
The Ministry has identified various benefits to the proposed regulatory changes, if approved and implemented, including:
• Enhanced professionalism among registrants as a result of the revised and updated Code of Ethics regulation
• Strengthened consumer protection through enhanced disclosures and information for the public on a registrant’s obligations to buyers, sellers and others in relation to providing real estate services
• Updated rules to help the regulator, RECO, operate more efficiently and focus its compliance and enforcement efforts where they are most needed and most effective
The Ministry anticipates there will be administrative costs for registrants if the regulatory proposals are approved and implemented, for example, learning about the changes, recordkeeping, and reporting to the regulator. The ministry would be interested in receiving comments and feedback from registrants pertaining to specific anticipated one-time and ongoing costs and benefits to assist in quantifying the impacts of implementing these regulatory proposals.
Ministry Invites Parties to Submit Comments
The Ministry invites interested parties to submit comments by responding to its position or by sending an email to email@example.com no later than January 24, 2022. If approved, the Ministry is proposing Phase 2 regulations would come into force on September 1, 2022.
While the province’s current real estate regulatory framework already provides certain protections to buyers and sellers who use a real estate agent by providing them with access to prescribed information about properties they may be interested in, these proposed changes are intended to provide even stronger protections and assist buyers and sellers in making even more informed real estate decisions.
A copy of the proposed updated draft regulations can be viewed on the Ontario Regulatory Registry website where stakeholders can also provide input.
Oakville Real Estate Lawyers Representing Buyers and Sellers
At Campbells LLP our experienced team of real estate lawyers will continue to monitor for any legislative changes to TRESA and REBBA and how they may impact the responsibilities of real estate brokerages, brokers and salespersons in Ontario. We can assist in facilitating stakeholder feedback on current proposed changes and will continue to update you on changes to the real estate law landscape as it impacts the real estate market. We provide a wide range of legal services related to buying and selling property and are here to meet your real estate law needs. To speak with a lawyer, contact us online or at 905-828-2247.