I understand the government will review the rules around multiple representation. Do you know when this will happen and what could change?

The Ontario government’s review of multiple representation launched at the end of June. Before I delve into the details of the review though, I’d like to provide some background and context.

In April, the government announced the “Ontario Fair Housing Plan,” which included a package of measures intended to help more people find affordable homes, increase supply, protect buyers and renters and bring stability to the real estate market. Part of those measures included a commitment to review the Real Estate and Business Brokers Act, 2002 (REBBA) and its regulations – the legislation that RECO enforces – including provisions relating to practices such as multiple representation (also known as dual agency or double-ending when the brokerages represents the buyer and seller).

For those who don’t know, a common form of multiple representation involves a real estate salesperson or broker from a brokerage representing the buyer and the seller in the same transaction. There are very strict disclosure and consent rules in place because, at its core, there is an inherent conflict of interest when one person represents a buyer and a seller. These two parties to a trade have different interests: a seller’s primary goal is likely to sell their property for as much money as they can, whereas a buyer would aim to purchase a property for as little as they can.

Over the past few years, multiple representation emerged as a growing issue. At RECO, we saw an increasing number of questions and complaints related to the practice, and so in March 2016 we issued a Registrar’s Bulletin to real estate professionals to clarify and emphasize the rules.

In January of this year, RECO submitted recommendations to government on how to enhance the rules in REBBA’s Code of Ethics around multiple representation so that consumer protection is strengthened. We recommended that the Ontario government revise the rules to:

    • 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.

We’re happy that government has committed to modernizing the rules for real estate professionals, and we look forward to being a key participant in the review. There are two phases for the review, the first of which is taking place right now, as I said earlier, with a focus on multiple representation. Phase two will encompass a broader review of the rules and it is scheduled to begin in spring 2018.

From now to July 24, 2017, you have an opportunity to provide your input in Phase one. You can read the government’s consultation paper here. This is a key step in changing this legislation, and so we hope that you will take the time to engage in this opportunity to provide your feedback.

If you have a question for Joe about the home buying or selling process, please email askjoe@reco.on.ca.

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