BackgroundOREA has been calling on the Government of Ontario to allow for designated representation since 2017. We took that position when the previous Liberal government was consulting on a multiple representation ban. Instead of a ban, OREA proposed a model which would permit two agents at the same brokerage to represent both a buyer and seller in a single transaction.
Q: What is multiple representation and why is OREA calling for its optional practice in Ontario?
Definition of Designated Representation
Designated representation is not anything new as a business model because it is used by brokerages in other provinces, like Alberta and Nova Scotia. It allows a brokerage practicing designated representation to have the option to work with both the buyer and the seller in a single transaction. The proposed model of designated representation says that the duty owed to the clients would apply to the designated agents within a brokerage for the specific, identified transactions, not the brokerage and all of its REALTORS®.
ABC Realty Inc. has a listing, and the brokerage also happens to represent a buyer that is interested in that listing. In other words, the brokerage represents the seller and the buyer. Today, that is known as multiple representation. In the proposed designated representation model, the listing agent would be able to represent the seller, while another agent at ABC Realty Inc. would represent the buyer on behalf of the brokerage to advocate solely for the buyer. The Brokerage would retain oversight responsibility for the designated agent's fulfillment of the duties to the clients.
Q: Why is designated representation a good practice for both REALTORS® and consumers?
Q: What happens under TRESA when a brokerage represents both a seller and a buyer in multiple representation?
Definition of Self-Represented Party (SRP)
Under REBBA, there were two definitions which REALTORS® had to know - client and customer. The Ministry felt that the terms client and customer were confusing for the public, so the term customer will be removed entirely from TRESA. Moving forward, there will be two terms – client and self-represented party (SRP). An SRP is simply a party who is not a client of any brokerage.
Q: Where can I find the Information and Disclosure to Self-Represented Party Forms?
Q: Why is the government introducing the new consumer designation of ‘self-represented party’, effectively eliminating the customer relationship, and why is this ultimately better for consumers?
Q: How does the new self-represented party designation differ from the customer designation that currently exists under REBBA?
There are two instances where a self-represented party (SRP) could interact with the REALTOR® without the interaction giving rise to an implied agreement between the REALTOR® and the SRP.
First, an SRP can receive general information relating to the business of trading and real estate, like general real estate market statistics. Second, a REALTOR® could provide assistance to an SRP if that assistance is a service to their client, for example, as the seller’s representative showing that listing to an SRP. However, the SRP has engaged for services only, not a duty of care. Should the SRP wish to purchase the property, the REALTOR® may assist the SRP with the mechanics of filling out an Agreement of Purchase and Sale, but would not be able to provide any advice, otherwise you have created unintended agency by relying on your skills and judgement decision to the SRP.
Q: Is there a list of activities that represents the "assistance" that is allowed to be provided to a self-represented party under TRESA?
How to engage with a self-represented party
Per Section 10 of the Code of Ethics, REALTORS® will be prohibited from providing services, opinions or advice to an SRP.
However, as a service to the REALTORS® client, assistance may be provided to an SRP after:
Q: Do you have any advice on how to convert a self-represented party into a client?
What is the SRP acknowledgement form and how do I execute this form?
Q: If there is no representation agreement with a self-represented party, are they required to sign anything during a real estate transaction?
Definition of Transparent Offer Process
In TRESA, sellers have another option to negotiate the sale of their property. If the seller directs the brokerage, the TRESA general regulations allow for the details of competing offers to be shared with other buyers. No personal information may be disclosed or any other information that would identify the person making the offer. It is important to note that it will still be a requirement for a brokerage to disclose the number of registered offers to competing buyers.
Q: What happens if the seller decides to change their mind halfway through the transaction and goes from a closed to a transparent offer process or vice-versa? Can the buyer withdraw their offer?
Q: What types of information can a seller can disclose to other buyers during a transparent offer process transaction?
TRESA implements some changes to the contents of written agreements and outlines new requirements for disclosures.
Q: What are the new rules surrounding disclosures under TRESA?
Listing agreement and the remuneration payable to any other brokerage
Q: What changes can we expect to the contents of written agreements under TRESA?
Services provided by a brokerage and the expiry date of the agreement
TRESA requires disclosures on:
TRESA regulations also require:
Q: What are common examples of disclosures in a real estate transaction and are there any new disclosures that are required to be made under the Act?
The Real Estate Council of Ontario (RECO) will be releasing a brand-new information guide for consumers. The information guide prepared by RECO is mandated and it is the only acceptable version of the information guide. Brokerages are not permitted to create their own information guide and must provide the consumer with the guide that is prepared by RECO.
Q: What is the new information guide and when should I give it to my real estate consumer?
OREA continues to work with RECO on the launch of the new information guide and will provide our Members with the resources to help explain the information guide to your clients.
Q: Where does the information guide come from, and do real estate consumers have to acknowledge its receipt in any way?
Updates to the Code of Ethics
The new TRESA Code of Ethics have been updated so that the ethical requirements are retained within the Code but all of the technical and procedural requirements have been moved to the general regulations or other regulations. This means that the Code of Ethics truly articulates the requirements that REALTORS® must comply with related to integrity, quality of service and conflicts of interest. As a result, the new Code of Ethics is much smaller compared to the old.
Q: What are some of the changes that we can expect from the new REALTOR® Code of Ethics under TRESA?
Changes to RECO’s Discipline Process
The introduction of TRESA was a result of OREA’s own advocacy to set the highest real estate standards in North America and to crack down on bad actors in our profession. In addition to the new legislative and regulatory standards enacted by TRESA, the scope of RECO’s discipline committee will be expanded.
The RECO discipline committee will now have the ability to:
The composition of the discipline committee will consist of five or more members and at least one of those members must have no connection to the real estate industry. Any appeals of RECO discipline committee decisions will be to the License Appeal Tribunal (LAT), an independent quasi-judicial tribunal, rather than RECO’s appeals committee. The resulting discipline, including the reasons for revocation or suspension of a registration, will be made available to the public.Updates to the RECO Discipline Process (PDF)→
The Importance of TRESA
Q: What is the significance of TRESA regulations, not only for Canada, but specifically the province of Ontario?
Updates to Registration Status
Under TRESA, real estate professionals can now relate to the terminology consumers have always used. Anyone in good standing with the Canadian Real Estate Association (CREA) can use the term REALTOR®in their ads and social media platforms.
Q: How is the registration status different under TRESA?
Updates to Drip Campaigns
Many REALTORS® send new listings to prospective buyers via a ‘drip campaign’. Under the new TRESA, this practice of sending listings to a prospective buyer in real time would continue to be permitted.
Q: Have the rules around ‘drip campaigns’ for prospective buyers changed under TRESA?
OREA's REALTOR® in Residence Ray Ferris has answers! Whether you need clarification around the new offer process options, or have a question about how designated representation will work at your Brokerage, OREA has your back.Get In Touch
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