On November 19, 2019 the Ontario government introduced a bill proposing changes that would, if passed by the legislature, modernize rules for the Ontario real estate industry. The new rules would address the need for a stronger and more ethical business environment to protect consumers when making their biggest purchase.
For the first time in almost 20 years the current act, 2002 Real Estate Business Brokers Act (REBBA) will be changed. Among the changes will be renaming the act to The Trust in Real Estate Services Act, to signify what the new rules aim to achieve. The bill also gives more power to The Real Estate Council of Ontario (RECO), the administrative authority that administers and enforces the Act.
This is a big win for the public, and all home buyers in Ontario. It's another step towards having a more transparent real estate market and increases accountability among the 86,000+ real estate agents, brokers, and brokerages in Ontario.
"The updated legislation will provide enhanced protection for consumers and provide additional clarity for registrants around their role and responsibilities to both the buyer and seller. These changes are a reflection of the rapidly changing and modern marketplace and will help to ensure that consumers are protected when they make the biggest purchase of their life."
Michael Beard, RECO CEO
The bill has just been introduced and, as they say, the devil is in the details, so as of now we may not be sure of what changes will actually be implemented and when they would come be seen in action.
According to the Ontario Government's news release , the proposed amendments to the Act have five primary goals:
1. Improve consumer protection and choice in the market by enabling regulatory changes to:
- Improve the information consumers receive about what a real estate professional and brokerage must do for them (e.g., regulations could require that consumers be provided with a guide about consumer relationships).
- Give consumers more choice in the purchase and sale process by permitting real estate professionals and brokerages to disclose details of competing offers at the seller's choosing.
2. Improve professionalism among real estate professionals and brokerages through enhanced ethical requirements for the sector by:
- Enabling regulatory changes to streamline and modernize the code of ethics that real estate professionals and brokerages must follow.
3. Update the powers available to the Real Estate Council of Ontario and its Registrar to enhance compliance, address bad conduct and improve regulatory efficiency by:
- Allowing RECO's Registrar to consider a broader range of factors, including past conduct and the public interest, when considering registration eligibility.
- Giving RECO authority to levy financial penalties (also known as administrative penalties) for failure to comply with a legal requirement (e.g., filing a document late) specified in regulations.
- Allowing RECO's discipline committee to consider a broader range of issues and provide it with the authority to revoke or suspend a real estate professional's or brokerage's registration or impose conditions on a registration. Discipline committee decisions may be appealed to the Licence Appeal Tribunal.
- Giving RECO's Registrar authority to require that real estate brokerages and professionals provide data about real estate transactions to support risk-based enforcement.
4. Create a stronger business environment by:
- Laying the foundation for allowing real estate professionals to incorporate and be paid through the corporation, while maintaining measures that protect consumers.
- Enabling the creation of a specialist certification program that may be developed by government or by RECO to ensure that real estate brokerages and professionals holding themselves out as specialists in a particular type of real estate (e.g., commercial real estate) are certified as specialists.
5. Bring legislation and regulations up-to-date and reduce regulatory burden:
- Simplify brokerage procedures by aligning the time that brokerages must hold unclaimed trust money in various circumstances.
- Update language to make it more consistent with other laws.
At Dwelly, we couldn't be happier with the introduction of this bill - transparency and simplicity in the home buying process is what we have been striving for.
The introduction of open bidding by permitting sellers to disclose details of competing offers is a great step that will make transactions more transparent and benefit both home buyers and sellers, especially for Toronto real estate, where offer nights and bidding wars have become common.
To learn more about the newly introduced Bill 145, you can visit the legislature assembly of Ontario's website here.
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