OREA's roadmap to a new REBBA
North American Leading Real Estate Regulation
The Real Estate and Business Brokers Act, 2002 (REBBA), is the foundation of this profession’s business practices as well as the ethical standards which guide every interaction between consumers and registrants in Ontario.
Industry practices, business models and technology, which are common place today, did not exist when REBBA was drafted.
If REALTORS® are going to continue to be trusted professionals used by the overwhelming majority of Ontario home buyers and sellers, REBBA and its Code of Ethics must reflect the highest standards of consumer protection and a modern real estate marketplace.
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Strengthen Protections for New Home Buyers
All real estate registrants (REALTORS®, brokers, salespersons) in Ontario abide by the same rules – those written in REBBA, 2002. Real estate registrants receive the same education, go through the same process to attain registration and are held to the same standards of professional conduct and ethics enforced by RECO. These rules are in place to protect consumers during the largest financial transaction most will ever make.
However, REBBA exempts builders and developers from having to register under the Act to trade in real estate. As a result, consumers who purchase a property from a builder or developer do not enjoy the same protections that exist under REBBA, creating a two-tiered system for consumers in Ontario.
Consumers have a right to expect that whether they are buying a home using a real estate registrant or a builder, they will enjoy equal protections under the law. The builder loophole in REBBA should be eliminated.
Provide Parties With The Option For a More Transparent Offer Process.
Consumer expectations are changing. They want to have more control over how the transaction unfolds. Under the current system, registrants are not permitted to disclose the contents of any offer to any other party apart from the seller.
If the parties (buyers and sellers) want a transparent, multiple-offer process, REBBA and the REBBA Code should allow for it with the consent of all parties. A transparent process could allow buyers to feel they have a better chance to make their best offer and for the seller to feel confident that they have accepted the best offer since all buyers have had opportunity to compete openly.
Whether consumers decide to consent to a transparent multiple offer process or not, they should have the choice under REBBA.
Review Term Limits For Buyer and Seller Contracts.
Registrants are legally obligated to look out for the best interests of their clients. Consumers rightly expect that their registrant will work hard for them throughout the duration of their contract. There are two sides to a real estate agreement: the buyer/seller and the brokerage. As the market continues to become more complex, and consumers more sophisticated, contract provisions should be reviewed to ensure that they reflect a modern real estate market.
Maintain the consumer’s right to choose a real estate professional they know and trust
The previous government successfully passed Bill 166, Strengthening Protection for Ontario Consumers Act, 2017 during the last Parliament which provides the government with the ability to introduce Mandatory Designated Representation (MDR) with facilitation through regulation. This model ensured two consumers could continue to work with one registrant/broker/salesperson on the same real estate transaction provided both parties consented to the arrangement.
This change allows a consumer to continue to have the ability to work with a registrant they know and trust. It would also not limit access to real estate services for consumers living in rural and remote communities.
“Real estate professionals in other provinces can incorporate. Most other professions can incorporate. REALTORS® in Ontario can’t. We just want to be treated fairly.”
~David Kurt, Member of the REBBA Review Taskforce
Sales Representative/Team Leader, Coldwell Banker Charles Marsh Real Estate
Fair tax treatment for REALTORS®
Ontario’s REALTORS® are among the most civically engaged profession in the province. Their volunteer, philanthropic and civic efforts, make their communities a better place to live. Unfortunately, an outdated piece of red tape is preventing real estate salespeople and brokers from operating their businesses through professional corporations.
Other professions, including accountants, architects, lawyers and insurance brokers all have the ability to incorporate. In addition, registrants are able to incorporate in six other provinces, including British Columbia, Quebec, Alberta, Saskatchewan, Manitoba, and Nova Scotia, while Ontario remains an outlier.
It is time for Ontario to follow suit and allow registrants to incorporate.
New rules to protect consumers against unlicensed operators
The term “trade” in REBBA is one of the most important definitions under the Act. It forms the pillar of consumer protection by underpinning the prohibition that an individual cannot trade in real estate unless they are registered. A lack of clarity in the definition has permitted some unregistered individuals to operate outside of the law (i.e. REBBA).
Unregistered consultants and non-registrants representing themselves as real estate professionals, often target new Canadian communities and pose a significant risk to consumer protection. The definition of “trade” should be expanded/clarified to eliminate grey areas like these.
Implement a "Cooling Off" period for registratnts who have had their license revoked.
When RECO revokes a registrant’s registration, that person is free to apply for re-registration after waiting only one year. Historically, revocation of a license only happens under extreme circumstances, such as a major violation of REBBA. Considering revocations only happen in very serious cases, one year is too short. There should be a mandatory “cooling off” period of at least two years before the person can re-apply for registration.
Replace the term salesperson
The term “salesperson” under REBBA is vague and not reflective of the services provided by a real estate professional. Registrants are highly-trained individuals who do much more than simply sell a product. They are negotiators, contract experts and communications specialists that help buyers and sellers navigate what is likely the most significant and costly purchase of their entire lives. It is time for a term that more accurately describes the profession. The term would be dependent on further consultation with real estate professionals.
Create a specialty licensing class for commercial registrants
Many aspects of commercial real estate are different than residential real estate. Commercial real estate requires different levels of training and expertise.
Currently, a real estate consumer has no way to determine if someone specializes in commercial real estate. OREA recommends that REBBA is amended to permit a specialty designation or licensing for commercial registrants.
Broker of record signing authority
When a Broker of Record is out of the office for any significant period of time, they are required to appoint a designate to serve as a signing authority. The legislation dictates that the designate has to be within the same brokerage, even though there could be someone more suitable outside of the brokerage. The Broker of Record should have the ability to designate signing authority to whoever they see fit.
Standard real estate identification for entering homes
When real estate professionals enter people’s homes they typically provide a business card as identification. As a result, consumers have no way to verify a registrant’s registration (i.e. license status). RECO should create an identification card, similar to a driver’s license, that has a photo of the registrant, confirmation of their registration status and the expiration date. This should be shown before anyone is given access to a property to conduct a showing.
Even though RECO has a mobile application that allows registrants to identify themselves, not every real estate professional has a smartphone to make use of the application. A physical, photo identification card would ensure that every registrant can identify themselves to a consumer.
“Our clients put their trust in us every day. There is no room for rule breakers and unethical activity in our business. Ontario needs tougher penalties and a regulator that isn’t afraid to throw the book at the small number of agents who break the rules.”
~Stacy Evoy, Member of the REBBA Review Taskforce
Broker, Royal LePage Triland Realty