A new phase of the Trust in Real Estate Services Act (TRESA) came into effect on December 1, bringing with it a whole host of changes to the way Ontario's 96,000 real estate professionals will operate.
Introduced by the provincial government in November, TRESA replaces the Real Estate and Business Brokers Act. The new rules are intended to tighten consumer protections while enhancing transparency for the hundreds of thousands of Ontarians who buy and sell homes each year.
From facilitating open offers to stiffer penalties for rule-breaking realtors, here's what you need to know about the changes TRESA has brought forward.
Allowing Open Offers
One of the major changes under TRESA is that realtors — if given permission by their sellers — will be allowed to share the details of competing offers with other buyers. This will allow for an open offer process, though any personal or identifying information will be withheld.
There has been a big push for open offers over the past year, with CREA rolling out the option to display offers publicly on a home's REALTOR.ca listing page earlier this year. Some provincial legislation, however, has prevented the sharing of offer information (in Ontario, only the number of offers was allowed to be disclosed on a listing) but Ontario brokerages will now, at their client's direction, be able to conduct a much more open offer process. Sellers are able to choose how much information is shared, and can change their minds at any time.
No More "Customers"
Under TRESA, the term "customer" will no longer be used. Instead, there will be a "client" or a "self-represented party." A client is a client of a brokerage, whereas a self-represented party is not a client of any brokerage. If any service is being provided by a brokerage, whoever is receiving that service has to be a client of the brokerage, meaning a representation agreement must be entered into.
Introducing Designated Representation
Brokerages will now have the option to offer designated representation — a model that has been used in other provinces like Alberta and is now debuting in Ontario. Under designated representation, a brokerage can retain multiple clients in a transaction without it leading to a multiple representation situation.
If a single client enters into a designated representation agreement, they are represented by the entire brokerage but can work with a specific broker or salesperson. When this leads to a brokerage having multiple clients in a single transaction, the brokerage is required to remain impartial and each client will be represented by a specific broker or salesperson.
Stronger Powers for RECO
The Real Estate Council of Ontario (RECO), which is responsible for regulating real estate professionals in the province, has earned some new powers under TRESA. Previously, RECO'S disciplinary committee could only handle allegations of non-compliance with the Code of Ethics but will now have the authority to take on any compliance failures related to TRESA. The committee will also have the power to suspend, revoke, or apply conditions to a realtor's registration.
An Updated Code of Ethics
All Ontario real estate professions have an updated Code of Ethics to comply with, with the changes intended to help protect Ontarians from fraud as well as reduce conflicts of interest. The new Code of Ethics is significantly smaller in size than the old one (two pages versus 11 pages) and will only contain the ethical requirement laid out for realtors. The technical and procedural requirements that were previously included in the Code of Ethics have been moved elsewhere.
The previous Code stated that realtors must make "best efforts" to not engage in fraud or unethical behaviour, whereas the new version instructs them to "not engage." Language around inaccurate representation has also been upgraded from instructing realtors to "not knowingly make an inaccurate representation" to "[realtors] shall make best efforts to ensure that any representations are accurate and are not misleading."