Key changes to Real Estate & Business Broker Act
Ontario Government announces key changes to Real Estate & Business Broker Act effective next year
New rules aim to increase consumer confidence and protection
RECO is pleased to announce that the provincial government is making important changes to the law that governs real estate registrants (agents and brokerages) in Ontario. The changes will strengthen consumer protection and raise consumer confidence in the real estate sector.
The following changes will take effect on April 1, 2023.
- The Real Estate and Business Brokers Act, 2002 (REBBA) will be renamed the Trust in Real Estate Services Act, 2002 (TRESA, 2002).
- A new principle-based code of ethics that applies to registrant conduct will take the place of the existing code.
- Enhanced disclosures written in plain language and prominently identified as “disclosure,” along with other information, will help buyers and sellers to make informed decisions. For example, there will be greater clarity about the obligations for the seller’s brokerage to disclose material facts to buyers.
- There will also be more clarity about the options consumers have for interacting with brokerages. This will include useful information to help consumers decide which option they prefer and the implications of each, including what will happen if the buyer and seller are represented by the same brokerage. For those who choose not to be represented by a registrant in a trade, there will be a new RECO form to help explain the risks involved and what they can expect from a brokerage.
- The barrier to open offers will be removed, giving sellers the option to use an open-offer process to sell their property, while maintaining the confidentiality of those making the offers.
- Every buyer and seller who engages with a registrant will be given a consumer information guide that outlines key information everyone should know. The guide will be produced by RECO.
The changes will strengthen consumer protection and help RECO with its compliance and enforcement efforts by:
- Broadening the discipline committee’s powers to impose conditions on registration, suspend a registration, and revoke a registration – authority it currently does not have. Appeals of all matters decided by the RECO discipline committee will be to the Licence Appeal Tribunal (LAT) rather than the RECO appeals committee. LAT is an independent, quasi-judicial tribunal.
- Allowing RECO to inquire into a registrant’s conduct and refer a matter to the discipline committee, whether or not there is a formal complaint.
- Making more information available about disciplinary action and other matters on RECO’s registrant search tool. This will permit consumers to make informed decisions about the salesperson and brokerage they choose to work with.
- Permitting RECO to require registrants to report specific transactional data and related information, subject to regulatory requirements.
- Providing RECO with more authority over certain advertising, record-keeping, and notice requirements.
The ministry did not make changes to the existing exemption from the registration requirements for auctioneers, but it will continue to consider this issue in phase 3 of regulation development, which is expected to begin later this year. Phase 3 will also include proposals for the development of an administrative penalties regime and consideration of a potential specialty certification program.