RECO’s recommendations for REBBA review
In June 2017, the Ontario government launched the first of two public consultations on proposed changes to the Real Estate and Business Brokers Act, 2002 (REBBA). The first is happening now and the second is scheduled for spring of next year.
In January 2017, RECO submitted a letter to the Minister that outlined preliminary recommendations on how to enhance the rules in REBBA so that consumer protection is strengthened. RECO’s preliminary recommendations were based on the following consumer protection principles:
- Prevent or prohibit conflict of interest situations;
- Eliminate or drastically reduce the financial benefits of acting unethically;
- Ensure consumers are provided with clear, consistent information regarding the nature of their relationship with their representative, and the services they’ll provide; and,
- Provide RECO with appropriate tools and penalties to respond to consumer harm.
Last week, RECO submitted its response to Phase 1 of the REBBA review. Consistent with our January 2017 letter to the Minister, RECO supports:
Changes to multiple representation: A new Mandatory Designated Representation requirement at the individual registrant level should be established – with limited and specific exceptions. Designated representation will allow a brokerage to have multiple clients in a single transaction, but each will be represented by a different salesperson or broker.
Mandatory standardized disclosure clauses: RECO should have the authority to establish mandatory standardized disclosure obligation language. If implemented, this change would increase a consumer’s understanding of different forms of representation and services provided.
Higher fines: Maximum fines for Code of Ethics violations should be increased. For individual salespersons, maximum fines would increase from $25,000 to $50,000, and for brokerages, maximum fines would increase to $100,000. RECO would also support a proposal that includes fines linked to commission amounts.
In anticipation of Phase 2 of the REBBA review, RECO also submitted some preliminary recommendations on a number of other key matters, such as:
Streamlining Regulatory processes: RECO recommends several enhancements, including Discipline and Appeals Panels be given expanded powers, including allowing them to revoke or suspend registrations.
Consumer Protection: RECO recommends a review of the definitions of trade and services, as well as the distinction between client and customer and the obligations to clients and customers.
Realignment of rule-making authority: RECO recommends that additional authority for the detail of some aspects of regulation be given to RECO, to ensure a flexible and responsive regulatory regime, consistent with the principle of delegated regulation-making powers.
The information above is meant to provide a snapshot of RECO’s response to Phase 1 of the REBBA review. You can read the detailed submission in full here.