Government has delayed the April 1, 2023, in-force date of the Phase 2 legislative changes to assess a proposal to further enhance consumer protection and offer more consumer choice. At this time, RECO does not have a new effective date.
Watch this video to learn more.
Special update on TRESA
The title of the Real Estate and Business Brokers Act, 2002 (REBBA) will change to the Trust in Real Estate Services Act, 2002 (TRESA).
This page of the RECO website highlights substantive changes to TRESA and its regulations. The changes are those expected to have the greatest impact on the day-to-day activities of registrants including registrants’ interactions with consumers.
This page of the website will be updated as new bulletins and additional resources become available. RECO is also developing a Mandatory Continuing Education course that will address the important changes to the legislation.
TRESA video series
The videos will support you in preparing to implement the changes in the way you trade in real estate.
TRESA video series: Part 3
Read the transcript – English (PDF)
TRESA video series: Part 2
Read the transcript – English (PDF)
TRESA video series: Part 1
Read the transcript – English (PDF)
Part 1: Information for registrants
Note: A reference to “registrant” includes a brokerage, broker, or salesperson unless the context indicates otherwise. A reference to “salesperson” includes a broker. A reference to “person” includes an individual, partnership, and corporation.
Under TRESA, customer agreements cannot be entered into, amended, or extended. Existing customer agreements, regardless of the end date in the agreement, will automatically expire 120 days after TRESA comes into force.
Services, opinions, and advice can only be provided to clients. Regardless of the scope of the services being provided, even when an agreement is limited to preparing an offer, the person will be a “client” and the agreement will be a “representation agreement” as those terms are defined in the legislation.
Any person receiving services under an agreement with a brokerage in respect of a trade is owed the duties and obligations owed to clients under TRESA.
Under TRESA, registrants are prohibited from providing services, opinions, or advice to a self-represented party. Registrants are permitted to provide assistance to a self-represented party, in respect of a trade, after the registrant provides both the mandatory RECO Information Guide, and the mandatory RECO Information and Disclosure to Self-Represented Party form, to the self-represented party.
To avoid creating an implied representation agreement, any assistance a registrant might provide to a self-represented party must:
- be a service, or incidental to a service, provided to the registrant’s client,
- promote and protect the best interests of the registrant’s client,
- not include advice or opinions, and
- not encourage the self-represented party to rely on the registrant’s knowledge, skill, or judgment.
Registrants are not obligated to provide any assistance to a self-represented party. Any assistance provided is a service to the registrant’s client and would fall under the representation agreement with the client.
The RECO Information Guide must also be provided to a self-represented party prior to providing any assistance to the self-represented party.
Salespersons must also explain the contents of the guide before providing any services or assistance.
New requirements related to the contents of representation agreements with clients are introduced.
Currently, an agreement with a client must include the amount the client agrees to pay to the brokerage and, in the case of an agreement with a seller, the amount the client agrees to pay to another brokerage involved in the transaction. Agreements must also clearly, comprehensibly, and prominently, set out the required information.
Under TRESA, representation agreements must identify any circumstances in which the remuneration amounts payable might change and, for each circumstance, an explanation of how the amount might change, and an indication of whether one or more brokerages may receive remuneration.
The existing requirement to include a description of the services to be provided under the agreement continues.
- written in plain language that is clear and concise,
- presented in a manner that brings to the recipient’s attention the information that is required to be conveyed, and
- disclosures must be identified by the prominent placement of the word “disclosure”
The purpose of the new requirements is to promote clarity in communications. Clear communication supports informed decisions and enhances consumer protection and demonstrates professionalism.
Under TRESA, the required disclosure must include the following information:
- The fact that the brokerage is proposing to represent more than one client in the trade.
- The differences between the duties and obligations the brokerage would have if it represents only one client in respect of the trade and the brokerage’s duties and obligations if it represents more than one client in respect of the trade. More specifically, differences relating to:
- the obligations and duties the brokerage would owe to the client
- the services the brokerage would provide to the client, and
- the remuneration arrangements.
Registrants must follow the instructions of their seller client, including any change in the instructions.
For example, a seller client may instruct their registrant to share the content of offers and a few days later, change their mind and instruct their registrant not to share the information.
A registrant representing a buyer client should advise their client that a seller may or may not decide to share the content of offers submitted before their client makes an offer.
A registrant should also advise their buyer client that the seller is at liberty to change their mind about sharing offer information.
- take reasonable steps to determine the material facts relating to the acquisition or disposition of an interest in real estate, and
- disclose the material facts to the client as soon as possible after the determination.
Under TRESA, the disclosure obligation is broadened to the registrant’s client and every person making or receiving an offer.
- A description of the financial benefit, including:
- an indication of whether the financial benefit is direct or indirect
- an estimate of the value of the financial benefit
- a description of the conditions, if any, under which the financial benefit would be provided.
- A description of the relationship between the person who might provide the financial benefit, and the registrant or, if applicable, the person related to the registrant
- An indication of whether the registrant might receive the financial benefit or, if a person other than the registrant might receive the financial benefit, an indication of that fact and a description of the relationship between that person and the registrant
- made the required disclosure,
- advised the client or prospective client to seek independent professional advice with respect to the disclosure,
- taken all reasonable steps to ensure that the client or prospective client understands the conflict or potential conflict of interest, and
- obtained written consent from the client or prospective client to the provision of the registrant’s services despite the conflict or potential conflict of interest
Under the new Code, registrants must not obstruct or attempt to obstruct any person from making a complaint to RECO or obstruct or attempt to obstruct RECO from receiving accurate or complete information. Registrants must not induce or attempt to induce a person to withdraw a complaint made to RECO about the registrant.
Registrants may continue to engage in mediation, settlement discussions, negotiation, or arbitration to resolve a dispute, but any agreement to resolve a dispute must not include a requirement to withdraw, or refrain from making, a complaint made to RECO.
- a registrant is present with the person, or
- the owner of the real estate has consented in writing to the person having access without a registrant being present.
New powers of the Discipline Committee include the authority to:
- apply conditions to a registration,
- suspend a registration, and
- revoke a registration if, in the committee’s opinion, the registrant is not entitled to registration under section 10 of the Act.
Allegations related to misconduct that occurred prior to the date TRESA came into force, will continue to be addressed under REBBA as it read before that date.
Part 2: Information for brokerages
- The brokerage’s liabilities exceed the realizable value of its assets, or the brokerage is unable to pay its liabilities as they become due.
- An insolvency proceeding is commenced by or against the brokerage or the brokerage is in receipt of knowledge that such an insolvency proceeding is imminent.
- A court order or judgment is made against the brokerage in relation to:
- trading in real estate, or
- misappropriation, fraud or breach of trust.
- exercise a power or duty related to the administration of the Act or the regulations
- further regulatory oversight, including assessing trends in the information that may impact compliance and enforcement activities
- further consumer education and awareness regarding the advancement of consumer protection and a fair, safe, and informed real estate market, or
- further registrant education and awareness regarding roles and responsibilities under the Act and the regulations.
For example, RECO may begin collecting information related to the number and type of transactions, details of money held in trust, and other information, to support a risk-based approach to regulation and to fulfill its regulatory oversight obligations.
RECO will provide registrants with advance notice of the information it intends to collect, and the form in which it must be provided.
For any inquiries, please contact RECO at email@example.com or 1-800-245-6910.