Real estate brokerages in Ontario that work with consumers to arrange short-term accommodations are being told they must become licensed as travel agents.
The Travel Industry Council of Ontario (TICO) has begun a campaign targeting real estate brokerages with threats of legal action because they work with consumers arranging short-term accommodations, says the Ontario Real Estate Association (OREA). TICO is sending “compliance letters” to Realtors demanding that they become registered as travel agents.
In a letter to Jim Wilson, Ontario’s Minister of Economic Development, OREA CEO Tim Hudak says, “As you know, Realtors are registered under the Real Estate & Business Brokers Act, 2002 (REBBA). This double registration requirement is a needless piece of red tape that costs real estate small businesses thousands of dollars, considerable time and much aggravation with no discernable benefit to consumers.”
To register under TIA, a real estate brokerage must take a nine-module TICO administered course and exam. In addition, brokerages are required to pay a $3,000 registration fee, a
$10,000 security deposit and maintain at least $5,000 of working capital, says OREA.
The brokerages being targeted are operating in Georgian Bay, Prince Edward County, Muskoka and Haliburton, where recreational properties are in high demand, it says.
“According to TICO, real estate professionals are not permitted to transact short term rental properties because these properties do not fall under the Residential Tenancies Act, 2006 (RSA). TICO defines short-term rental properties as accommodations offered to ‘travelers’ for 30 days or less. The term ‘travelers’ is not defined under the Travel Industry Act, 2002. TICO maintains that a real estate registrant is only permitted to transact residential leases covered by the RSA,” says the OREA letter.
“OREA opposes TICO’s arbitrary double registration requirement. Our position is based on the following:
“Real estate registrants in Ontario are licensed to trade in all types of real estate with very limited exceptions.
“Based on our preliminary analysis, there is no basis for TICO’s ruling that real estate registrants can only transact RSA defined rental leases.
“Real estate registrants are subject to strong ethical requirements under REBBA, making the registration requirement redundant from a consumer protection point of view; and,
“Real estate registrants are required to carry robust errors and omissions insurance that is designed to protect consumers.”
Hudak’s letter continues: “This piece of red tape is a money grab, which is costing real estate brokerages thousands of dollars. These funds should be repaid to our member real estate brokerages.”
The association is asking that TICO put its compliance campaign on hold until all parties can meet to try and work out a solution that “protects consumers and minimizes unnecessary overlap and duplication.”