How are RECO, Tarion and the HCRA different?

While the Real Estate Council of Ontario (RECO), Tarion, and the Home Construction Regulatory Authority (HCRA) all regulate the housing market, each is mandated by the provincial government to do so in different capacities.

Let me begin with where I work.

RECO administers the Real Estate and Business Brokers Act, 2002 (REBBA), and – in a nutshell – licenses and regulates real estate agents and brokerages. It sets the education standards to become an agent and to maintain agent registration.

RECO assesses applications to become an agent or a brokerage. An inspection program is used to monitor brokerage compliance. If something goes wrong during a real estate transaction and someone files a complaint, RECO will thoroughly investigate, assess the alleged misconduct, and, when appropriate, discipline the agent for any breaches and sanction with a fine, a suspension or even revocation of registration.

The professional liability insurance program administered by RECO includes coverage for consumer deposits paid to brokerages. This means that deposits are insured against loss due to theft, fraud, misappropriation or situations such as a brokerage insolvency, subject to the terms of the policy.

RECO also aims to educate consumers about real estate matters, including in this weekly column.

To learn more, visit

Tarion, for its part, administers the Ontario New Home Warranties Plan Act, which provides warranty coverage on almost every new home in the province. They have the authority to step in when a builder does not fulfill their warranty obligations.

Ontario’s new-home warranty offers deposit protection, compensation for delayed closings and one-year, two-year and seven-year warranties. I would like to point out that most warranty issues end up getting resolved by the builder without Tarion’s involvement. However, if a warranty dispute continues, Tarion will work with the buyer and builder to resolve the problem. For more information visit

This brings us to the Home Construction Regulatory Authority (HRCA), which is the newest regulatory authority on the block. In 2021, the Ontario government designated it as the organization responsible for administering the New Home Construction Licensing Act, 2017. The HRCA regulates new-home builders and vendors in the province. If you are looking into a new build, visit for more details.

Until recently, Tarion was the delegated administrative authority in charge of licensing home builders and vendors in Ontario. However, an independent review of Tarion and the Ontario New Home Warranties Plan Act was conducted and resulted in the HRCA being created by the provincial government.

Now, the regulation and licensing of new home builders and vendors in Ontario are the responsibility of the HCRA, and Tarion is accountable for all issues related to homeowner warranty protection.

While they certainly have different roles, RECO, Tarion and HRCA are similar in that they have a two-fold duty to protect consumers, as well as to promote and enforce legislated standards to licensed professionals.

They all agree that the more informed a buyer is, the better. So, keeping that in mind, if you are in the market to buy a home, I strongly encourage you to do your research, hire a real estate agent who suits your needs, and ask plenty of questions so that you can make a decision you will be content with.

If you have a question for Joe about the home buying or selling process, please email

This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.

Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at, follow on Twitter @RECOhelps or on YouTube at

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