Updated Code of Ethics aims to strengthen professionalism in the real estate market
The second phase of legislative and regulatory changes introduced under Ontario’s Trust in Real Estate Services Act (TRESA), 2020 have taken effect as of Dec. 1.
The provincial government said in its news release that these changes would modernize the rules governing its real estate sector, including brokerages, brokers, and salespersons (collectively called registrants) in Ontario.
“Buying, leasing and selling real estate is one of the biggest and most important decisions a person or business will ever make so it’s critical that rules for real estate brokerages, brokers, and salespersons reflect modern business practices that foster a strong and vibrant real estate market,” said Todd McCarthy, Ontario’s minister of public and business service delivery.
The amendments broadly aim to enhance professionalism among registrants, to strengthen consumer protection, to promote consumer confidence, and to educate home buyers and sellers.
“We want to ensure Ontarians feel empowered and informed when participating in real estate transactions, and for professionals in the sector to be seen as trusted and ethical,” McCarthy said in the news release.
Changes in Phase 2
Specifically, the new rules will do the following:
- allow real estate brokerages to disclose the details of competing offers, excluding personal or identifying information, if the seller directs them to do so
- enhance disclosure requirements for registrants
- offer an information guide to assist individuals in making informed decisions when trading in real estate
- require registrants to comply with an updated Code of Ethics that focuses on their obligations relating to integrity, quality of service, and conflicts of interest
- equip the Real Estate Council of Ontario (RECO) with new powers and tools to more effectively hold registrants accountable for non-compliance with the rules
- permit brokerages to enter designated representation agreements so that clients can be represented by a specific broker or salesperson at a brokerage that would actively promote their interests in a trade
TRESA’s first phase took effect in October 2020. The changes at the time enabled salespersons and brokers to incorporate and to receive payment through a personal real estate corporation and permitted registrants to use more recognizable terms such as “real estate agent” and “REALTOR®” in advertisements so that they could better describe the services offered.
“Ontario’s REALTORS® are thrilled to see the Phase Two legislative and regulation changes come into effect,” said Tim Hudak, chief executive officer of the Ontario Real Estate Association. “This marks a historic moment for real estate professionals in Ontario and is the result of a decade of hard work, advocacy and collaboration with the province.”
“Phase 2 of TRESA represents the most significant change in consumer protection measures for Ontario’s real estate sector since the 1990s,” said Michael Beard, the chief executive officer of RECO, which administers and enforces the TRESA.
The TRESA – which amended the Real Estate and Business Brokers Act, 2002 – was passed by the legislature on Feb. 28, 2020 and received royal assent on Mar. 4, 2020.
“Thanks to TRESA, Ontario will raise the bar on consumer protections and become a North American leader in professional standards, ethics, and modern business tools,” Hudak said in the news release.
“Ontarians who buy or sell a home now have greater clarity on their rights, as well as the duties owed to them by real estate agents and brokerages,” Beard said in the news release. “The changes also include new powers that will further strengthen RECO’s compliance and enforcement efforts.”
More regulations are needed to fully implement the changes introduced by the TRESA, the news release said.
“OREA commends the Ontario government for their work on TRESA and looks forward to collaborating on the third phase of implementation,” Hudak said.
“Ultimately, this represents important progress for consumers, while also enhancing professionalism for real estate salespeople and brokers,” Beard said.
