Long outdated real estate legislation is being revamped to reflect today’s housing market. The new bill updates the regulations for realtors which includes more disclosure of competing bids for homes, new means of enforcement for ethical breaches, and various rules on business structures.
The bill’s also being renamed from the 2002 Real Estate Business Brokers Act (REBBA) to The Trust in Real Estate Services Act. Practically speaking, it allows for more transparency in real estate transactions for both homebuyers and sellers.
Specifically, home sellers would have the option of revealing the exact details of competing bids in a multiple buyer situation.
Up until now, sellers could only tell prospective buyers the number of bids that had been submitted.
Government and Consumer Services Minister Lisa Thompson said new legislation was urgently needed.
“It’s been nearly 20 years since the Real Estate and Business Brokers Act has been passed, and it’s absolutely overdue for a review,” said Thompson.
“The real estate market in Ontario and, quite frankly across Canada, has seen enormous changes…Economically real estate is booming. Between 2005 and 2015, the total value of all residential properties more than doubled in Ontario.”
Tim Hudak, CEO of the Ontario Real Estate Association, said the bill is essential for establishing a more transparent relationship between sellers, buyers, and the brokers they work with.
“This will make Ontario a leader again when it comes to having faith in your real estate professional,” said Hudak.
“Down the road we want to allow at the sellers’ discretion, not the brokerage’s discretion, we want people to know how much those offers are if they see it as beneficial to them,” said Joe Richer, registrar of the Real Estate Council of Ontario (RECO), an organization that regulates agents and brokerages.
“The reality is that may benefit some sellers. But man may say ‘I like the process the way it is,” he added.
Real estate brokers and agents also run the risk of being fined for minor infractions, such as breaking advertising rules or failing to provide a monthly reconciliation of accounts held in trust by the brokerage.
However, Richer clarifies, saying that it won’t be a trial-type scenario, but would have to be extremely clear-cut to be executed, as he says “things where it’s clear you either did or didn’t.”
RECO would also be able to order specific courses of education for agents who broke specific rules.
“That’s a big thing for us. Today if we want to revoke somebody (take away their registration) we usually go to provincial offences court and then we would use that to get the charges for bad conduct and then we go to licence appeal tribunal,” said Richer.
Considering the gigantic commissions brokers are earning these days, it’s nice to know some accountability comes with the job. Professional standards never hurt anyone.