By Mike Cusano
As a real estate professional, I believe one of the best aspects of this job is how rewarding it is to provide such a valuable service. There is a tremendous sense of pride in helping a family or a business owner find the place that is just right for them, or in guiding folks through the emotional process of selling the house they’ve called home for many years. It’s a privilege to do what we do.
Guiding consumers through what is likely the largest transaction of their lives means we are entrusted with an incredible amount of responsibility. Professionalism in every aspect of our business dealings is key and we must put our clients’ interest ahead of our own. Beyond this, I encourage Ontario registrants to be engaged and reflective and think about the industry and the rules that govern us.
With that in mind, this fall we’ll be consulting with the industry to talk about several matters, including how Ontario’s Real Estate and Business Brokers Act, 2002 (REBBA) can be enhanced. At face-to-face town halls, we’ll discuss how to build on the existing professionalism of our industry and raise the bar for current and future professionals.
REBBA has served consumers well for many years, but with only minor changes having been made over the past 15 years, it’s time to modernize it to better reflect the current real estate environment.
Currently, the Ontario government is conducting a review of the rules, considering leading practices in other provinces and consulting with consumers, registrants and subject matter experts along the way.
We recently shared the Real Estate Council of Ontario’s (RECO’s) submission for the ongoing phase 1 of the REBBA review. Our submission also included some preliminary recommendations for phase 2, which is slated for next spring. Multiple representation and fines were the focus of the first phase.
RECO wants to see mandatory designated representation (MDR), to limit the situations in which multiple representation is permitted. Under MDR, a brokerage could represent two parties to a transaction, as long as each party works with a different representative. In addition, RECO has advocated for standard disclosure language that would ensure that consumers understand the pros and cons before they decide who will represent their interests in a trade.
While MDR would apply to most multiple representation scenarios, we know there are necessary exceptions. In some remote communities with a limited number of registrants, for example, MDR may simply not be feasible.
When it comes to fines, we support a move to raise them, as well as a proposal to disgorge part or all the commission if the conduct warrants it. An important element of this is that reclaimed commissions that had been unethically “earned” should be returned to consumers in some way. This would be similar to how the courts may order restitution when it is appropriate to do so.
While phase 2 of the review isn’t scheduled to begin until spring of next year, I encourage you to start thinking about it now because this portion of the review will be much broader in scope and look at REBBA in its entirety.
At RECO, we’ve given some thought to what phase 2 could cover, such as:
- Expanding the powers of our Discipline and Appeals Committee to make it easier to suspend or revoke registration in response to severe misconduct;
- Clarifying some of the language used in real estate so that consumers have a better understanding of their relationship with their representative and the services provided; and
- Making the legislation more flexible. This would allow RECO, subject to government approval, to be more responsive in updating rules and regulations in response to ever-changing conditions in the marketplace and technology.
This is just a snapshot of our recommendations. I hope you’ll read our submission in its entirety, as well as take the time to consider how you would like to see professional standards raised.
Which elements of REBBA do you think should be updated? Are there changes that would make it easier for you to serve your clients better? Do you find that some rules are out-of-date because of recent technologies? Are there any issues that you encounter in your local area of practice that are not currently addressed in REBBA?
We’re looking forward to touring the province this fall to meet face-to-face with industry leaders. It’s a great opportunity to hear feedback and engage in a dialogue on numerous RECO initiatives, including the REBBA review. These are the sorts of insights that we’re hoping to discuss on that tour. We want to hear from registrants who can not only shine a light on issues, but also think critically about them and offer thoughtful solutions – solutions that RECO could implement and others where amendments to REBBA may be necessary to do so.
Ultimately, this review is all about strengthening consumer protection for the buyers and sellers that we have the privilege of representing every day.