Does RECO regulate the entire real estate industry? Are there limits to what RECO can do for consumers?
The Real Estate Council of Ontario is a not-for-profit corporation established to regulate the conduct of real estate salespeople, brokers and brokerages on behalf of the Government of Ontario. RECO does a lot to ensure a fair, safe and informed marketplace, but we must stay within the mandate established by the provincial government.
RECO administers the Real Estate and Business Brokers Act, 2002 (REBBA), which includes a Code of Ethics that salespeople and brokers (commonly called “agents”) must follow, in the public interest. Last year in this column, I discussed the different roles and responsibilities of RECO, the Canadian Real Estate Association (CREA), the Ontario Real Estate Association (OREA), and regional boards or associations, such as the Toronto Real Estate Board (TREB). Each plays a distinct and important role in advancing the public policy debate, but it’s important to remember the latter organizations are trade associations that lobby various levels of government on behalf of their members. Only RECO was created with the specific role of protecting the public.
How do we do that? RECO routinely inspects brokerages to ensure they’re complying with the law, and we address inquiries, concerns and complaints about the conduct of real estate professionals. RECO takes professional ethics very seriously. Real estate salespeople who get caught breaking the rules may be hit with heavy fines or removed from the business entirely. Registration with RECO is mandatory for anyone who wishes to work as a real estate salesperson or broker, and failure to do so can lead to charges under the Provincial Offences Act for contravening REBBA.
RECO also establishes education prerequisites and mandatory continuing education for salespersons and brokers, administers an insurance program that includes consumer deposit protection, and provides helpful buying and selling advice to support informed decisions about real estate transactions.
There are certain responsibilities that fall outside our legislated role. The Tarion Warranty Corporation protects buyers who purchase new homes directly from builders. Moreover, housing prices are determined by buyers and sellers in the real estate market – RECO doesn’t have a say in the valuation of properties. Nor do we regulate brokerage commissions or any contracts that you enter into for the purchase or sale of a property. We also can’t regulate the conduct of buyers and sellers. If a private sale between two individuals falls apart because one party acts unethically, and no registered salespeople are involved, it is exclusively a matter for the courts.
All of which means that when you’re ready to buy or sell a home, it makes sense to work with a registered real estate salesperson or broker.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
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 reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.