Consumer Information
The Real Estate Council of Ontario (RECO) protects consumers in the public interest by promoting a safe and informed marketplace and administering the rules that real estate salespeople, brokers and brokerages must follow.
RECO was established in 1997 as a delegated administrative authority (DAA) to enhance professionalism in the real estate industry, increase consumer protection and provide an effective and responsive regulatory framework.
As of December 1, 2023, The RECO Information Guide must be given to a self-represented party or prospective client before any services or assistance are provided.
WHAT IS TRESA?
The new “Trust in Real Estate Services Act, 2002” (TRESA) is replacing the “Real Estate and Business Brokers Act” (REBBA). Phase 2 of the regulatory changes came into effect on December 1, 2023
Significant Changes from REBBA – What’s new with TRESA!
Structured Client Relationships
Before TRESA “customer” denoted individuals engaging with a real estate agent in a non-committal capacity, without any official ties. While agents still had to be fair and honest, the special duties they owed to clients didn’t extend to these customers. But with TRESA, no more customers – everyone in a deal is either a client or going solo as a self-represented party (SRP). SRPs don’t have an agent, so it’s on agents to furnish them the “Reco Information Guide” explaining the SRP role. Moreover, agents must exercise due diligence to ensure that their service or counsel to an SRP does not inadvertently culminate in an implied representation agreement.
Designated Agency Representation
In the past, when a real estate sales representatives/brokers represented both sellers and buyers, we called it “multiple representation.” But with TRESA, that term is out, and “Designated Representation” is in. Now, the same real estate sales representatives/brokers can represent both buyer and seller if everyone knows the score. Transparency is the name of the game. The regulatory framework is designed to ensure that each party benefits from representation without encountering conflicts of interest.
Transparency during Multiple Offers
With REBBA, Seller’s agents were limited in their ability to disclose information, limited to only conveying the quantity of registered offers. TRESA introduces a pivotal shift by endowing sellers with the authority to instruct their agents regarding the extent of information to be shared with potential buyers. This construct promotes fairness and transparency, affording prospective buyers a understanding of competing offers, while concurrently providing sellers with a degree of control over the information disclosure process. Agents are enjoined to engage in exhaustive discussions with their seller clients and to diligently document these instructions.
Straight Talk on Disclosures and Deals
All facets of the agent-client relationship encompassing services and financial considerations, ae expressly communicated and documented. TRESA mandates transparency with the entire scope of services that are provided to a client.