OREA is commending the Ontario government for introducing real estate legislation that tackles conflict of interest situations and consumer confusion that can arise in the current multiple representation system.
“These new rules are some of the strictest in North America when it comes to transparency and consumer protection,” says OREA president-elect David Reid. “Ontario Realtors were pleased to work with the government to bring more clarity of a Realtor’s duties to the consumer and address any real or perceived conflict of interest.”
The mandatory designated representation model proposed by the government, “will set a North American leading standard for greater transparency, enhanced clarity of the duty and obligations of Realtors and tougher consumer protection,” says OREA.
It says the province has also committed to allowing consumers to work with a Realtor of their choice as an impartial transaction facilitator under a strict set of rules. The facilitator model would only apply to instances where both clients involved in the transaction consented in writing to the arrangement. Consent would come through a simple, plain language document that clearly outlines the duties and obligations of the Realtor to the consumer with much higher fines for those who break the rules.
“A big part of a Realtor’s job is to act as a facilitator, bringing a willing buyer and seller to the table to find a win-win solution,” says OREA CEO Tim Hudak. “Where a Realtor is acting as a facilitator, the government’s proposal will ensure a high level of transparency and consumer protection.”
The Toronto Real Estate Board (TREB) says it met “multiple times” with Ontario government officials to provide input on ongoing consultations.
“TREB supports, in principle, the proposal to move towards a mandatory designated representation model. This approach is consistent with numerous other Canadian jurisdictions, and we believe that it will allow for the efficient operation of the marketplace, while ensuring consumer protection,” says Tim Syrianos, TREB president.
“The detail still needs to be sorted out and the legislation still has to go through the legislative process, including public consultations. However, the government has committed to moving forward with a model similar to what the industry is advocating for,” says TREB CEO John DiMichele.
OREA says it is also pleased that the proposed legislation would double fines for breaches of the Real Estate and Business Brokers Act, 2002 (REBBA) Code of Ethics and mandate new disclosures in real estate forms, both of which OREA advocated for as part of the province’s REBBA review process.
“Right now, too often fines amount to a mere slap on the wrist,” says Hudak. “Ontario needs much stronger deterrents for unethical behaviour and a regulator that isn’t afraid to throw the book at the small number rule breakers.”
Other REBBA-related issues TREB would like to see addressed include:
- Need for an ombudsman for the real estate industry.
- A strong regulator with the ability to investigate industry issues.
- Allowing salespeople to incorporate.