Follow-up on RECO’s AGM

At RECO’s Annual General Meeting, we didn’t have time to answer all of the written questions we received. This document includes questions that we didn’t have a chance to respond to during the meeting.


Q: University credits should be accepted in lieu of update courses. This is how you raise the bar.

A: The Mandatory Continuing Education program (MCE) was initially created so that registrants could receive consistent information and education on all topics covered, with a focus on matters that supports RECO’s mandate, centered on regulatory compliance, consumer protection and current industry issues. Additional benefits of the current program include:

    • A modestly priced program;
    • The ability to take the courses anytime and anywhere;
    • Less administrative work for registrants, as the system automatically tracks completion of the program in the RECO system; and
    • The ability for RECO to make changes to the courses in response to current events, ensuring the material is always up to date.
    • We will soon move forward with a planned full-scale review to ensure the program is meeting the goals we set out to achieve from the beginning.

Overall, RECO is committed to raising the bar on education. For registrant education, we recently announced that Humber College and NIIT Canada will be the new provider of a new registrant education program. The program will have more hands-on work as well as an independent exam that must be passed by incoming registrants to ensure they are practice-ready.

Role of RECO

Q: What have you done to make the public aware of their rights? Based on my personal observations, many in the public don’t know about their rights and that’s why their rights are abused by some realtors. We may need to educate people more in a more simplified way.

A: We agree consumer education is paramount, so we are very committed to consumer outreach. The informed consumer knows the right questions to ask and what to expect when buying or selling a home. We encourage consumers to understand their rights and responsibilities when they work with salespersons and brokers so that they can take some ownership of the process. We reach home buyers and sellers in several ways:

    • in-person at consumer shows;
    • our regular “Ask Joe” column in the Saturday edition of the Toronto Star;
    • online ads;
    • consumer seminars;
    • social media;
    • mainstream media outreach;
    • brochures; and
    • newsletters.

Over the last five years we have increased consumer awareness of RECO by approximately 20 per cent, but we agree – the more we can do to educate consumers, the better, so we are always looking at ways to enhance this aspect of our mandate.


Q: Why does RECO not get involved in government relations with the Ontario government? Instead it’s left with real estate boards.

A: We provide advice and recommendations to government on how best to enhance consumer protection and reduce unnecessary administrative burden. One recent example of this is our recommendations to government on how to amend rules for multiple representation. As the Ontario real estate regulator that reports to government, it is not our role to be active lobbyists for registrants.


Q: What does RECO plan to do to influence or initiate encouragement and assurance of a healthy market?

A: RECO is the regulator of the real estate industry in Ontario, responsible for administering the laws around trading in real estate on behalf of the Ontario government. Our efforts to administer the law are carried out through the consumer protection lens. We raise awareness of and promote the rules around real estate transactions, issues that buyers and sellers should know about, and how they can protect themselves, but we do not engage in general discussions about the market as this is outside of our mandate. As part of our consumer education mandate, we offer buyers and sellers information that they can use so that they are not heading into the market – any market – blindly, and we help inform them about finding the right person to help them in their buying or selling efforts.

Ad violations

Q: Why doesn’t RECO monitor websites that advertise for sale/rent? Why is the onus on agents to fill out the forms? There are so many. Ninety-eight per cent of the ads are in violation. As an agent, I have no time to write these complaints out.

A: RECO monitors advertising through brokerage inspections, by supporting brokers in reviewing their advertising for compliance, and by investigating complaints. In many ways, registrants share in the responsibility of maintaining a fair and informed marketplace. Advertising is a brokerage responsibility and we are looking to place accountability with brokers of record, and provide support for brokerages who need help with advertising compliance.


Q: I’m assuming proceeds from the fines go to the provincial government. Why is a percentage of fines collected not returned to RECO to assist with investigation, monitoring and enforcement of the most serious offences?

A: Registrants may be sanctioned with two types of fines. First, fines ordered under the Provincial Offences Act, which are paid to the Court, not to RECO. Second, RECO Discipline and Appeals Hearing fines, which are paid to RECO. To find them in RECO’s financial statements, they are included in “Other Income” on the Statement of Operations within RECO’s published financial statements. In 2016, disciplinary penalties and recoveries were $368,000. This contributed less than two per cent to total revenues and were used to fund RECO’s expenses from operations.


Q:What about a retirement plan?

A: It is not the role of a regulator to offer retirement plans to registrants. As it is with some companies, your employer may be able to offer retirement plan options.

Escalation clauses

Q: Jos stated escalation clauses are not prohibited. This contradicts what is noted on the RECO website, that RECO does not endorse the use of esc clauses and has no authority to prohibit their use. What is the correct information and should this not be communicated to members?

A: Both points are true – escalation clauses are not prohibited, but at the same time RECO does not endorse using them. RECO can only enforce the legislation as written and the Real Estate and Business Brokers Act, 2002 (REBBA) does not prohibit the use of an escalation clause in an offer. So even though RECO discourages their use, we cannot explicitly ban them.

The use of an escalation clause can create complex situations for all parties involved in a transaction and registrants should ensure that they act carefully and conscientiously when giving advice on its use.

It would be prudent for all parties to obtain independent legal advice prior to proceeding with this type of offer.

You may wish to review RECO’s article in the recent edition of For the RECOrd which will provide guidance in handling escalation clauses. The article can be found here.

Landlord-tenant issues

Q: RECO should support landlords regarding rent increases. We need to build more rental units.

A: RECO regulates real estate professionals and protects the public interest in the province on behalf of the Ontario government. Landlord-tenant issues are not covered under the Real Estate and Business Brokers Act, 2002, so this matter is not in our jurisdiction. We suggest taking these concerns to the Landlord and Tenant Board or the Ontario government directly.

Open bidding

Q: Our process of handling multiple offers under a normal course of business is fair and ethical, but when agents hold offers in order to induce multiple offers, it becomes Blind Bidding, which is very unethical. It is actually like setting up a rat trap. If a homeowner is conducting an auction, then let it be a real auction. Post the conditions that will be acceptable and have an open and fair bidding system, like a normal auction. It is currently being done in Australia and other parts of the world. What is RECO’s position on this issue?

A: Regarding open bid processes, or auctions, this practice is permitted in Ontario as it is in Australia. It is up to the seller to decide if they want to go this route. In certain districts of Australia, the auction process is extremely popular. Most sellers in Ontario do not select an auction or open bid process. You can learn about the pros and cons of having your client sell a home by auction here.


Q: [Question directed to Minister] When will the amount of fines be increased? When were fines last increased?

A: The Minister did not have an opportunity to respond to this question, however RECO can offer some insight. The current fine levels were established in REBBA, which came into force in 2006, so we are pleased that the government has committed to reviewing and modernizing the rules for real estate professionals. There are two phases to the review: the first launched in June and covers multiple representation and fines. The second phase will encompass a broader review of the rules and it is scheduled to begin in spring 2018. We support a move to raise fines and look forward to being an active participant in the consultation.


Q: [Question posed by consumer] If the complaint is not satisfactorily dealt with, what is the appeal process?

A: If a party to a complaint has new evidence that has not yet been assessed and believes we should re-open a case, we encourage them to bring it to our attention so we can review it again.

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