TORONTO — Today, the Ontario government introduced a bill proposing changes to the Real Estate and Business Brokers Act, 2002 that would, if passed by the legislature, modernize rules for registered real estate brokerages, brokers and salespersons.
Between January and March 2019, almost 7,000 consumers and real estate professionals responded to an online government survey and consultation paper about potential changes to the act. The Trust in Real Estate Services Act, if passed by the legislature would address the need for a stronger and more ethical business environment, to protect consumers when making their biggest purchase.
For example, the Act would:
- Enable regulatory changes that would give consumers more choice in the purchase and sale process and improve the information they receive about what a real estate professional and brokerage must do for them.
- Improve professionalism among real estate professionals and brokerages by allowing for regulatory changes to enhance ethical requirements.
- Update the Real Estate Council of Ontario (RECO)'s regulatory powers, by allowing it to levy financial penalties (also known as administrative penalties) to encourage compliance with the Act.
- Create a stronger business environment by laying the foundation for allowing real estate professionals to incorporate and be paid through the corporation while maintaining measures that protect consumers.
- Bring legislation up-to-date and reduce regulatory burden.
Details of the Bill
The proposed amendments have five primary goals:
1. Improve consumer protection and choice in the market by enabling regulatory changes to:
- Improve the information consumers receive about what a real estate professional and brokerage must do for them (e.g., regulations could require that consumers be provided with a guide about consumer relationships).
- Give consumers more choice in the purchase and sale process by permitting real estate professionals and brokerages to disclose details of competing offers at the seller's choosing.
2. Improve professionalism among real estate professionals and brokerages through enhanced ethical requirements for the sector by:
- Enabling regulatory changes to streamline and modernize the code of ethics that real estate professionals and brokerages must follow.
3. Update the powers available to the Real Estate Council of Ontario and its Registrar to enhance compliance, address bad conduct and improve regulatory efficiency by:
- Allowing RECO's Registrar to consider a broader range of factors, including past conduct and the public interest, when considering registration eligibility.
- Giving RECO authority to levy financial penalties (also known as administrative penalties) for failure to comply with a legal requirement (e.g., filing a document late) specified in regulations.
- Allowing RECO's discipline committee to consider a broader range of issues and provide it with the authority to revoke or suspend a real estate professional's or brokerage's registration or impose conditions on a registration. Discipline committee decisions may be appealed to the Licence Appeal Tribunal.
- Giving RECO's Registrar authority to require that real estate brokerages and professionals provide data about real estate transactions to support risk-based enforcement.
4. Create a stronger business environment by:
- Laying the foundation for allowing real estate professionals to incorporate and be paid through the corporation, while maintaining measures that protect consumers.
- Enabling the creation of a specialist certification program that may be developed by government or by RECO to ensure that real estate brokerages and professionals holding themselves out as specialists in a particular type of real estate (e.g., commercial real estate) are certified as specialists.
5. Bring legislation and regulations up-to-date and reduce regulatory burden:
- Simplify brokerage procedures by aligning the time that brokerages must hold unclaimed trust money in various circumstances.
- Update language to make it more consistent with other laws.
- According to data from Statistics Canada, the total value of all homes in Ontario more than doubled between 2005 and 2015, increasing to more than $2 trillion. Inflation at the same time was less than 20 per cent.
- There are more than 86,000 registered real estate salespersons, brokers and brokerages in Ontario.
- Statistics Canada residential property values study
- The Real Estate Council of Ontario is the administrative authority that has been delegated responsibility to administer and enforce the act