COVID-19 REAL ESTATE UPDATE - DECEMBER 22

As you may know, on March 4, 2020, the Trust in Real Estate Services Act, 2020 (TRESA, 2020) received Royal Assent. TRESA, 2020 amends the Real Estate and Business Brokers Act, 2002 (REBBA), the legislation that governs real estate brokerages, brokers and salespersons (registrants) in Ontario. REBBA and its regulations are administered and enforced by the Real Estate Council of Ontario (RECO).

The ministry is consulting on the second phase of draft regulations to bring related legislative changes made by the TRESA, 2020 into force. In the first phase, regulations were made in October 2020 to allow registered salespersons and brokers to incorporate and be paid through a personal real estate corporation, as well as to allow registrants to use more recognizable terms, such as “real estate agent” and “REALTOR®” to describe brokers and salespersons in advertisements.

During this second phase, the ministry is seeking feedback from registrants, members of the public and other stakeholders on proposed regulatory changes that include the following key proposals: 

Code of Ethics Regulation (Code) 

The ministry first consulted publicly on a proposed new Code from June 1 through July 2, 2021. Informed by the feedback from that consultation, the ministry is proposing further updates to the Code and is bringing them forward now in conjunction with related regulatory proposals. 

Offer Process

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.  This 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.

This proposal would require the Registrar appointed by RECO to publish an information guide. Registrants would be required to provide the guide and explain its contents to a person before providing services or assistance.  To enhance consumer protection, it is proposed that the following general requirements would apply to all disclosures under the Act and regulations made by registrants to the public: 

• A disclosure, consent, declaration or acknowledgment must be written in plain language that is clear and concise and it must be presented in a manner that is logical and likely to bring to the person’s attention the information that is required to be conveyed;         
• A disclosure must be identified by the prominent placement and formatting of the word DISCLOSURE (e.g., using bold font, uppercase letters). 

In addition, other specific requirements would be prescribed for certain mandatory disclosures (e.g., in relation to multiple representation; property interest in real estate; material facts about real estate). 

Real Estate Council of Ontario (RECO) Powers and Tools

Changes are being proposed to help RECO operate more efficiently and focus its compliance and enforcement efforts where they are most needed and most effective. The proposed changes would include: 

• Updates to the rules about the information RECO’s Registrar must make publicly available; 
• Specifying the purposes for which the Registrar can require registrants to provide       transactional data and related information to the Registrar; and 
• Providing the Registrar with additional authority over administrative matters related to certain advertising, record-keeping and notice requirements.

Discipline Committee Composition and Procedures

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.  In addition, the draft regulation includes certain updated provisions in relation to committee composition, appointments and processes.

Auctioneer Exemption

The ministry is proposing regulation changes to add a condition to the exemption for auctioneers. The draft regulation prescribes 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.

Further details, including a copy of the proposed updated draft regulations and a discussion paper, can be found on the Ontario Regulatory Registry’s website here. 

The ministry welcomes your feedback and encourages anyone who is interested to provide comments on these proposals. You may submit your comments by responding directly to the Regulatory Registry posting or by sending an email with your feedback to rebba@ontario.ca. 

Comments are due no later than January 24, 2022. The comments received during this consultation will be considered in preparing the final draft regulations. The ministry is proposing that the Phase 2 regulations, if approved, would come into force on September 1, 2022, along with the associated legislative changes in TRESA, 2020. 

NOTE: FOLA is preparing a submission and if you would like to send your comments for our consideration, please send those to Katie at katie.robinette@fola.ca by January 12th.