For those in the dark, the rules in Ontario’s real estate game have changed as of late. In 2020, the Trust in Real Estate Services Act (TRESA) began its initial roll-out, replacing the 2002 Real Estate and Business Brokers Act. The three-phase act is heavily supported by the Ontario Real Estate Association (OREA) and introduces new rules and regulations to the real estate industry, with an ultimate goal of increasing transparency and fairness.
Key reforms were implemented with Phase Two in December 2023, like the transparent offer process and the replacement of the term “customer” with “self-represented party.” A self-represented party does not have a brokerage relationship. So, anyone receiving brokerage services must enter a representation agreement and become a client of the brokerage. The updated rules now mean that brokerages have the option to offer designated representation, a model used in provinces like Alberta that allows a brokerage to retain multiple clients in a transaction without it leading to a multiple representation situation.
The rules also expanded the powers of the Real Estate Council of Ontario (RECO), allowing it to take on any compliance failures related to TRESA. Previously, RECO'S disciplinary committee could only handle allegations of non-compliance via its Code of Ethics. The December 2023-implemented rules also grant the disciplinary committee the power to suspend, revoke, or apply conditions to a realtor's registration. Finally, they also introduced an updated realtor Code of Ethics for the province.
Many Ontario realtors, like Newmarket-based Heather Kennedy, say the new rules are a good thing for the industry and are long overdue. She says that the most impactful change to the job brought by TRESA is the new option for sellers to disclose the content of offers. “This includes not just the price, but also the deposit, closing date, clauses and conditions, or lack thereof,” says Kennedy. “When there are multiple offers and bidding wars, it often causes controversy. This is a step towards more transparency. I don’t think it will temper prices, if anything, it may actually have the opposite effect when the market is hot and demand outweighs supply. I hope it will help the public to gain trust for realtors and the process of buying.”
Realtor Heather Kennedy
Like most legislative changes, however, TRESA isn't without its shortcomings and its critics. “Unfortunately, the way it was rolled out felt disorganized and was a moving target,” says Kennedy. “There were many changes still being made months after it began, which caused a lot of confusion amongst realtors and their clients.”
Kennedy also points to a grey area when it comes to rules surrounding multiple representation – a situation when the same realtor is representing both the buyer and seller in the same transaction. “For example, in British Columbia, it's flat out banned, whereas in Ontario, it is 'strongly discouraged',” says Kennedy. “However, I still see many realtors double-ending deals and there appears to be no investigation or consequence.” As for clients, Kennedy says many agree that multiple representation is a conflict of interest. “With that said, there are still many buyers who think if they work with the listing realtor, it will benefit them or give them an advantage," she says.
While it’s not directly TRESA-associated, Kennedy points to the Realtor Cooperation Policy that was implemented in January 2024 that states that realtors can only promote listings three days prior to listings on MLS as a positive move. “This means realtors can’t put a 'coming soon' sign on the lawn or promote a listing as 'coming soon' on social media prior to this time," says Kennedy. "There was one real estate team in particular which used to list properties exclusively for weeks or even months. They would host open houses without anything being on MLS at all. They sent it out to their database of clients and were clearly trying to double-end it before even hitting the market. This is not fair to other buyers, let alone other realtors. Not to mention, it is not in their seller clients’ best interest.”
As they say, a few bad apples spoil the bunch. “Unfortunately, the public has lost trust in the real estate profession because of these sorts of tactics over the years,” says Kennedy. “I am glad RECO, OREA, and CREA have stepped in to bring some regulation to the industry for everyone's sake.”
Sign sold in front of a detached house in residential area. Real estate bubble, new listings, hot housing market, overpaid, overpriced property, buyer activity, spring and summer sale concept.storeys.com
In October, OREA released its latest whitepaper on improving professional standards for Ontario realtors. The report, titled Continuing to Raise the Bar for Real Estate in Ontario, contains nine policy recommendations for TRESA’s third phase. Its policy recommendations are "aimed at improving consumer confidence with increased protections, raising the bar on REALTOR® education and professionalism, and deterring bad behaviours with stronger penalties," according to a press release.
“Buying or selling a home is one of the biggest decisions anyone can make in their lives, which is why OREA led the charge in advocating to strengthen the rules that govern the real estate profession," Rick Kedzior, President of OREA, tells STOREYS. "OREA’s recent Trust in Real Estate Services Act (TRESA) white paper titled Continuing to Raise the Bar for Real Estate in Ontario contains nine bold policy proposals, focusing on consumer protection and higher professional standards, that Ontario REALTORS® are calling on the Government of Ontario to implement in the third and final phase of TRESA."
OREA proposes enhancing consumer confidence by requiring auctioneers dealing in real estate to register with Ontario's industry regulator. "There’s currently an outdated exemption that allows auctioneers to sell homes by auction without having to register with the Real Estate Council of Ontario (RECO), which can pose heavy risks for consumers," says Kedzior. "We’re calling on the government to ensure auctioneers are registered under RECO and follow the Code of Ethics under TRESA."
Toronto condos/Shutterstockstoreys.com
The whitepaper also proposes that TRESA mandate written disclosure for guaranteed sales and include additional rules regarding latent defects and disclosure obligations. Bringing RECO in line with over 1,000 other government agencies, they recommend Ombudsperson oversight to instill registrant and public confidence in the regulator's programs and processes. “We support all interested parties in the real estate services sector sharing their views with the government, as legislation may be updated from time to time,” a rep from RECO tells STOREYS. “We don’t have any specific comment on the OREA report, other than that, when it was issued in the fall, we noted some long-standing positions that pre-date TRESA, as well as some new ones.”
On the education front, OREA wants to see the addition of a new two-year articling and mentorship requirement for new registrants. They are also requesting that the government enact Section 8 of TRESA, which would allow the use of specialty certification designations. To crack down on bad behaviour, OREA proposes that RECO be able to issue administrative monetary policies for clear violations and force registrants to give up profits for breaking TRESA and its Code of Ethics. "We’re calling on the government to expand the scope of RECO’s discipline process for those who violate consumer trust," says Kedzior. "One of the ways this can be accomplished is by allowing RECO to issue administrative monetary penalties (AMPs) for clear cut, indefensible actions, like advertising violations." OREA's final recommendation is to increase the reapplication waiting period for major TRESA violators to two years less a day.
"If implemented, these policy proposals will enhance consumer protection, improve realtor education, and penalize rule breakers in the profession, cementing Ontario REALTORS® as North American leaders in real estate," says Kedzior. "We look forward to working with the Government of Ontario this year to ensure that we have real estate legislation that works for both consumers and realtors.”
