Obligations of All Registrants (REALTORS®)

Real estate is a highly regulated business in Ontario. These regulations protect consumers, establish standards and provide for a method of delivering consistent, predictable and professional services. It also provides a means to discipline those that do not uphold those standards. Real estate professionals standards include regulatory (TRESA), fiduciary (legal) and general obligations to consumers. Let’s look at the key players first then move on to standards of practice.

The Ministry of Government and Consumer Services (MGCS)

MGCS is a ministry in the Ontario government that delivers vital programs, services and products — ranging from health cards, drivers licences and birth certificates to consumer protection and public safety — all to help create a better quality of life for Ontario’s families.

Relationship between MGCS and RECO:
• MGCS is responsible for any amendments to the Trust in Real EState Services Act, 2002 (TRESA) and its associated regulations, as well as general oversight of RECO
• On behalf of MGCS, RECO enforces TRESA, and is responsible for day-to-day delivery of services
• The Minister of Government and Consumer Services reports to the Legislative Assembly on the fulfilment of the Statutory Mandate by RECO, and the affairs of RECO
• RECO’s Board of Directors is accountable to the Minister for the performance of RECO

Real Estate Council of Ontario (RECO)

RECO is the regulator for real estate professionals in Ontario. Registration is mandatory to legally trade in real estate in Ontario.

RECO’s mandate is consumer protection on behalf of the Ontario government. As a Delegated Administrative Authority, RECO enforces the law in the public interest.

RECO’s mission is excellence in the delivery of regulatory services that protects the public interest and enhances consumer confidence in the real estate profession.

RECO’s role is to:
• Help consumers make informed decisions when buying or selling a home and understand that there are benefits to working with a regulated professional;
• Administer and enforce TRESA and a Code of Ethics. Provide advice to government regarding consumer protection legislation;
• Help registrants understand and follow TRESA. Investigate complaints about registrants who may have violated TRESA;
• Be accountable to the public through the Ontario government;
• Set the standards for pre-registration, articling and broker education;
• Develop and deliver mandatory continuing education courses; and,
• Administer a mandatory insurance program that includes consumer deposit protection, errors and omissions coverage and commission protection.

Ontario Real Estate Association (OREA)

OREA is a professional association. Membership is voluntary.

OREA’s mandate is to work on behalf of real estate professionals.

OREA’s mission is to help Ontario REALTORS®, brokerages and associations succeed.

OREA’s role is to:
• Encourage consumers to use a REALTOR® when they buy or sell a home;
• Work to create a legislative and regulatory environment at Queen’s Park that is favourable to REALTORS® and real estate;
• Provide information, tools and services, like standard forms, to help REALTORS® with their businesses;
• Be accountable to its REALTOR® members;
• Deliver pre-registration, articling and broker education courses, as approved by RECO (beginning mid-2019, a new provider — Humber College and NIIT Canada — will deliver preregistration education. OREA’s program will continue until the end of 2020);
• Provide voluntary courses for individual professional development; and,
• Develop forms and clauses for residential and commercial transactions. For example, Agreement of Purchase and Sale, Listing Agreement and Buyer Representation Agreement.

TRESA 2002 Regulations & Code of Ethics

In Ontario, the provincial government writes the rules that real estate salespeople, brokers and brokerages must follow, and RECO enforces those rules on the government’s behalf. Below, find legislation and regulations that govern RECO and the real estate profession.

The Trust in Real Estate Services Act, 2002, S.O. 2002, C.30, Sched. C (TRESA 2002) is the legislation that real estate salespersons, brokers and brokerages must follow. Associated regulations are in the links below:

Obligations of Registrants

Brokers and salespersons

2. (1) A broker or salesperson shall not do or omit to do anything that causes the brokerage that employs the broker or salesperson to contravene this Regulation. O. Reg. 580/05, s. 2 (1).

(2) Subsection (1) does not apply to a contravention by the brokerage of section 32, 33 or 41. O. Reg. 580/05, s. 2 (2).

Fairness, honesty, etc.

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity. O. Reg. 580/05, s. 3.

Best interests

4. A registrant shall promote and protect the best interests of the registrant’s clients. O. Reg. 580/05, s. 4.

Conscientious and competent service, etc.

5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services. O. Reg. 580/05, s. 5.

Providing opinions, etc.

6. (1) A registrant shall demonstrate reasonable knowledge, skill, judgment and competence in providing opinions, advice or information to any person in respect of a trade in real estate. O. Reg. 580/05, s. 6 (1).

(2) Without limiting the generality of subsection (1) or section 5,

(a) a brokerage shall not provide an opinion or advice about the value of real estate to any person unless the opinion or advice is provided on behalf of the brokerage by a broker or salesperson who has education or experience related to the valuation of real estate; and

(b) a broker or salesperson shall not provide an opinion or advice about the value of real estate to any person unless the broker or salesperson has education or experience related to the valuation of real estate. O. Reg. 580/05, s. 6 (2).

Dealings with other registrants

7. (1) A registrant who knows or ought to know that a person is a client of another registrant shall communicate information to the person for the purpose of a trade in real estate only through the other registrant, unless the other registrant has consented in writing. O. Reg. 580/05, s. 7 (1).

(2) If a broker or salesperson knows or ought to know that a buyer or seller is a party to an agreement in connection with a trade in real estate with a brokerage other than the brokerage that employs the broker or salesperson, the broker or salesperson shall not induce the buyer or seller to break the agreement. O. Reg. 580/05, s. 7 (2).

Services from others

8. (1) A registrant shall advise a client or customer to obtain services from another person if the registrant is not able to provide the services with reasonable knowledge, skill, judgment and competence or is not authorized by law to provide the services. O. Reg. 580/05, s. 8 (1).

(2) A registrant shall not discourage a client or customer from seeking a particular kind of service if the registrant is not able to provide the service with reasonable knowledge, skill, judgment and competence or is not authorized by law to provide the service. O. Reg. 580/05, s. 8 (2).

Remuneration

9. A registrant shall not indicate to any person, directly or indirectly, that remuneration is fixed or approved by the administrative authority, any government authority, or any real estate board or real estate association. O. Reg. 580/05, s. 9; O. Reg. 539/20, s. 1.

Information before agreements

10. (1) Before entering into an agreement with a buyer or seller in respect of trading in real estate, a brokerage shall, at the earliest practicable opportunity, inform the buyer or seller of the following:

1. The types of service alternatives that are available in the circumstances, including a representation agreement or another type of agreement.

2. The services that the brokerage would provide under the agreement.

3. The fact that circumstances could arise in which the brokerage could represent more than one client in respect of the same trade in real estate, but that the brokerage could not do this unless all of the clients represented by the brokerage in respect of that trade consented in writing.

4. The nature of the services that the brokerage would provide to each client if the brokerage represents more than one client in respect of the same trade in real estate.

5. The fact that circumstances could arise in which the brokerage could provide services to more than one customer in respect of the same trade in real estate.

6. The fact that circumstances could arise in which the brokerage could, in respect of the same trade in real estate, both represent clients and provide services to customers.

7. The restricted nature of the services that the brokerage would provide to a customer in respect of a trade in real estate if the brokerage also represents a client in respect of that trade. O. Reg. 580/05, s. 10 (1).

(2) The brokerage shall, at the earliest practicable opportunity and before an offer is made, use the brokerage’s best efforts to obtain from the buyer or seller a written acknowledgement that the buyer or seller received all the information referred to in subsection (1). O. Reg. 580/05, s. 10 (2).

Contents of written agreements

11. (1) A brokerage shall not enter into a written agreement with a buyer or seller for the purpose of trading in real estate unless the agreement clearly, comprehensibly and prominently,

(a) specifies the date on which the agreement takes effect and the date on which it expires;

(b) specifies or describes the method for determining,

(i) the amount of any remuneration payable to the brokerage, and

(ii) in the case of an agreement with a seller, the amount of any remuneration payable to any other brokerage;

(d) sets out the services that the brokerage will provide under the agreement. O. Reg. 580/05, s. 11 (1); O. Reg. 539/20, s. 2.

(2) A brokerage shall not, for the purpose of trading in real estate, enter into a written agreement with a buyer or seller that provides that the date on which the agreement expires is more than six months after the date on which the agreement takes effect unless,

(a) the date on which the agreement expires is prominently displayed on the first page of the agreement; and

(b) the buyer or seller has initialled the agreement next to the date referred to in clause (a). O. Reg. 580/05, s. 11 (2).

(3) A brokerage shall ensure that a written agreement that is entered into between the brokerage and a buyer or seller for the purpose of trading in real estate contains only one date on which the agreement expires. O. Reg. 580/05, s. 11 (3).

Copies of written agreements

12. If a brokerage and one or more other persons enter into a written agreement in connection with a trade in real estate, the brokerage shall ensure that each of the other persons is immediately given a copy of the agreement. O. Reg. 580/05, s. 12.

Seller representation agreements

13. If a brokerage enters into a seller representation agreement with a seller and the agreement is not in writing, the brokerage shall, at the earliest practicable opportunity and before any buyer makes an offer, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the seller for signature. O. Reg. 580/05, s. 13.

Buyer representation agreements

14. If a brokerage enters into a buyer representation agreement with a buyer and the agreement is not in writing, the brokerage shall, before the buyer makes an offer, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the buyer for signature. O. Reg. 580/05, s. 14.

Agreements with customers

15. If a brokerage enters into an agreement with a customer in respect of a trade in real estate and the agreement is not in writing, the brokerage shall, at the earliest practicable opportunity, reduce the agreement to writing, have it signed on behalf of the brokerage and submit it to the customer for signature. O. Reg. 580/05, s. 15.

Disclosure before multiple representation

16. A brokerage shall not represent more than one client in respect of the same trade in real estate unless it has disclosed the following matters to the clients or prospective clients at the earliest practicable opportunity:

1. The fact that the brokerage proposes to represent more than one client in respect of the same trade.

2. The differences between the obligations the brokerage would have if it represented only one client in respect of the trade and the obligations the brokerage would have if it represented more than one client in respect of the trade, including any differences relating to the disclosure of information or the services that the brokerage would provide. O. Reg. 580/05, s. 16.

Nature of relationship

17. If a registrant represents or provides services to more than one buyer or seller in respect of the same trade in real estate, the registrant shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all buyers and sellers involved in that trade of the nature of the registrant’s relationship to each buyer and seller. O. Reg. 580/05, s. 17.

Disclosure of interest

18. (1) A registrant shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the following matters to every client represented by the registrant in respect of the acquisition or disposition:

1. Any property interest that the registrant has in the real estate.

2. Any property interest that a person related to the registrant has in the real estate, if the registrant knows or ought to know of the interest.

3. Any property interest that a personal real estate corporation controlled by the registrant has in the real estate.

4. Any property interest that a person related to a personal real estate corporation controlled by the registrant has in the real estate, if the registrant knows or ought to know of the interest. O. Reg. 580/05, s. 18 (1); O. Reg. 539/20, s. 3 (1).

(2) A brokerage shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the matters referred to in paragraphs 1 and 2 of subsection (1) to every customer with whom the brokerage has entered into an agreement in respect of the acquisition or disposition. O. Reg. 580/05, s. 18 (2).

(3) A broker or salesperson shall, at the earliest practicable opportunity and before any offer is made in respect of the acquisition or disposition of an interest in real estate, disclose in writing the matters referred to in paragraphs 1 and 2 of subsection (1) to every customer of the broker or salesperson with whom the brokerage that employs the broker or salesperson has entered into an agreement in respect of the acquisition or disposition. O. Reg. 580/05, s. 18 (3).

(4) A registrant shall disclose in writing to a client, at the earliest practicable opportunity, any direct or indirect financial benefit that the registrant or a person related to the registrant may receive from another person in connection with services provided by the registrant to the client, including any remuneration that may be received from another person. O. Reg. 580/05, s. 18 (4); O. Reg. 539/20, s. 3 (2).

(5) A brokerage that has entered into an agreement with a buyer or seller that requires the buyer or seller to pay the brokerage remuneration in respect of a trade in real estate shall not charge or collect any remuneration under another agreement entered into with another person in respect of the same trade unless,

(a) the brokerage discloses at the earliest practicable opportunity to the other person, in writing, the terms of the agreement with the buyer or seller that require the payment of remuneration; and

(b) the brokerage discloses at the earliest practicable opportunity to the buyer or seller, in writing, the terms of the agreement with the other person that require the payment of remuneration. O. Reg. 539/20, s. 3 (3).

Properties that meet buyer’s criteria

19. If a brokerage has entered into a representation agreement with a buyer, a broker or salesperson who acts on behalf of the buyer pursuant to the agreement shall inform the buyer of properties that meet the buyer’s criteria without having any regard to the amount of remuneration, if any, to which the brokerage might be entitled. O. Reg. 580/05, s. 19; O. Reg. 539/20, s. 4.

Seller property information statement

20. If a broker or salesperson has a seller as a client and knows that the seller has completed a written statement that is intended to provide information to buyers about the real estate that is available for acquisition, the broker or salesperson shall, unless the seller directs otherwise,

(a) disclose the existence of the statement to every buyer who expresses an interest in the real estate; and

(b) on request, make the statement available to a buyer at the earliest practicable opportunity after the request is made. O. Reg. 580/05, s. 20.

Material facts

21. (1) A broker or salesperson who has a client in respect of the acquisition or disposition of a particular interest in real estate shall take reasonable steps to determine the material facts relating to the acquisition or disposition and, at the earliest practicable opportunity, shall disclose the material facts to the client. O. Reg. 580/05, s. 21 (1).

(2) A broker or salesperson who has a customer in respect of the acquisition or disposition of a particular interest in real estate shall, at the earliest practicable opportunity, disclose to the customer the material facts relating to the acquisition or disposition that are known by or ought to be known by the broker or salesperson. O. Reg. 580/05, s. 21 (2).

Agreements with third parties

22. A registrant shall not, on behalf of a client of the registrant, enter into an agreement with a third party for the provision of goods or services to the client unless,

(a) the registrant has disclosed in writing to the client the subject-matter of the agreement with the third party and the identity of the person responsible for paying for the provision of the goods or services;

(b) the client has consented to the registrant entering into the agreement with the third party; and

(c) the registrant has disclosed in writing to the third party the identity of the person responsible for paying for the provision of the goods or services. O. Reg. 580/05, s. 22.

Steps taken by registrant

23. A registrant shall inform a client of all significant steps that the registrant takes in the course of representing the client. O. Reg. 580/05, s. 23.

Conveying offers

24. (1) A registrant shall convey any written offer received by the registrant to the registrant’s client at the earliest practicable opportunity. O. Reg. 580/05, s. 24 (1).

(2) A broker or salesperson shall establish a method of ensuring that,

(a) written offers are received by someone on behalf of the broker or salesperson, if the broker or salesperson is not available at the time an offer is submitted; and

(b) written offers are conveyed to the client of the broker or salesperson at the earliest practicable opportunity, even if the broker or salesperson is not available at the time an offer is submitted. O. Reg. 580/05, s. 24 (2).

(3) Without limiting the generality of subsections (1) and (2), those subsections apply regardless of the identity of the person making the offer, the contents of the offer or the nature of any arrangements for remuneration. O. Reg. 580/05, s. 24 (3); O. Reg. 539/20, s. 5.

(4) Subsections (1) to (3) are subject to any written directions given by a client. O. Reg. 580/05, s. 24 (4).

(5) Subsections (1) to (4) also apply, with necessary modifications, to,

(a) written amendments to written offers and any other written document directly related to a written offer; and

(b) written assignments of agreements that relate to interests in real estate, written waivers of conditions in agreements that relate to interests in real estate, and any other written document directly related to a written agreement that relates to an interest in real estate. O. Reg. 580/05, s. 24 (5).

(6) Subsections (1) to (5) apply, with necessary modifications, if a brokerage and a customer have an agreement that provides for the brokerage to receive written offers. O. Reg. 580/05, s. 24 (6).

(7) Subsections (1) to (5) apply, with necessary modifications, to brokers and salespersons employed by a brokerage, if the brokerage and a customer have an agreement that provides for the brokerage to receive written offers. O. Reg. 580/05, s. 24 (7).

Agreements relating to remuneration

25. (1) If a brokerage has a seller as a client and an agreement between the brokerage and the seller contains terms that relate to remuneration and that may affect whether an offer to buy is accepted, the brokerage shall disclose the existence of and the details of those terms to any person who makes a written offer to buy, at the earliest practicable opportunity and before any offer is accepted. O. Reg. 580/05, s. 25 (1); O. Reg. 539/20, s. 6.

(2) Subsection (1) applies, with necessary modifications, to a brokerage that has a seller as a customer, if the brokerage and the seller have an agreement that provides for the brokerage to receive written offers to buy. O. Reg. 580/05, s. 25 (2).

Competing offers

26. (1) If a brokerage that has a seller as a client receives a competing written offer, the brokerage shall disclose the number of competing written offers to every person who is making one of the competing offers, but shall not disclose the substance of the competing offers. O. Reg. 580/05, s. 26 (1).

Written and legible agreements

27. (1) A registrant who represents a client in respect of a trade in real estate shall use the registrant’s best efforts to ensure that,

(a) any agreement that deals with the conveyance of an interest in real estate is in writing; and

(b) any written agreement that deals with the conveyance of an interest in real estate is legible. O. Reg. 580/05, s. 27 (1).

(2) Subsection (1) applies, with necessary modifications, if a brokerage and a customer have an agreement that provides for the brokerage to provide services to the customer in respect of any agreement that deals with the conveyance of an interest in real estate. O. Reg. 580/05, s. 27 (2).

Copies of agreements

28. (1) If a registrant represents a client who enters into a written agreement that deals with the conveyance of an interest in real estate, the registrant shall use the registrant’s best efforts to ensure that all parties to the agreement receive a copy of the agreement at the earliest practicable opportunity. O. Reg. 580/05, s. 28 (1).

Delivery of deposits and documents

29. Except as otherwise provided by law, if a registrant is representing a client or providing services to a customer in connection with a trade in real estate, and the client or customer has entered into an agreement in connection with the trade that requires the registrant to deliver a deposit or documents, the registrant shall deliver the deposit or documents in accordance with the agreement. O. Reg. 580/05, s. 29.

Business records

30. In addition to the records required by Ontario Regulation 579/05 (Educational Requirements, Insurance, Records and Other Matters) made under the Act, a brokerage shall make and keep such records as are reasonably required for the conduct of the brokerage’s business of trading in real estate. O. Reg. 580/05, s. 30.

Certificate of registration: broker or salesperson

31. Every broker or salesperson shall carry his or her certificate of registration and, on the request of any person, shall show it to the person. O. Reg. 580/05, s. 31.

Certificate of registration: brokerage

32. (1) A brokerage shall ensure that every certificate of registration issued to the brokerage is kept at the office to which the certificate relates. O. Reg. 580/05, s. 32 (1).

(2) A brokerage shall, on the request of any person, show to the person any certificate of registration issued to the brokerage. O. Reg. 580/05, s. 32 (2).

Certificates of registration for brokers and salespersons kept by brokerage

33. (1) A brokerage shall ensure that all duplicate original certificates of registration given to the brokerage in respect of brokers and salespersons employed by the brokerage are kept in a safe place. O. Reg. 580/05, s. 33 (1).

(2) A brokerage shall, on the request of any person, show the duplicate original certificate of registration given to the brokerage in respect of a broker or salesperson employed by the brokerage to the person. O. Reg. 580/05, s. 33 (2).

Current forms

34. A registrant shall ensure that forms used by the registrant in the course of a trade in real estate are current. O. Reg. 580/05, s. 34.

Financial responsibility

35. A registrant shall be financially responsible in the conduct of business. O. Reg. 580/05, s. 35.

Advertising

36. (1) A registrant shall clearly and prominently disclose the name in which the registrant is registered in all the registrant’s advertisements. O. Reg. 580/05, s. 36 (1).

(2) A brokerage that identifies a broker or salesperson by name in an advertisement shall use the name in which the broker or salesperson is registered. O. Reg. 580/05, s. 36 (2).

(3) A broker or salesperson shall not advertise in any manner unless the advertisement clearly and prominently identifies the brokerage that employs the broker or salesperson, using the name in which the brokerage is registered. O. Reg. 580/05, s. 36 (3).

(4) Subject to subsection (5.1), a registrant who advertises shall,

(a) use the term “brokerage”, “real estate brokerage”, “maison de courtage” or “maison de courtage immobilier” to describe any brokerage that is referred to in the advertisement;

(b) use the term “broker of record”, “real estate broker of record”, “courtier responsable” or “courtier immobilier responsable” to describe any broker of record who is referred to in the advertisement;

(c) use the term “broker”, “broker real estate agent”, “real estate agent”, “real estate broker”, “courtier” or “courtier immobilier” to describe any broker who is referred to in the advertisement; and

(d) use the term “salesperson”, “real estate agent”, “real estate salesperson”, “sales representative”, “real estate sales representative”, “agent immobilier”, “représentant commercial” or “représentant immobilier” to describe any salesperson who is referred to in the advertisement. O. Reg. 580/05, s. 36 (4); O. Reg. 539/20, s. 7 (1, 2).

(4.1) Revoked: O. Reg. 246/06, s. 2.

(5) A registrant who advertises is not prevented from using the trademark “REALTOR®” by itself or followed immediately by the term “broker” to describe a broker who is referred to in the advertisement or from using the trademark “REALTOR®” by itself or followed immediately by the term “salesperson” to describe a salesperson who is referred to in the advertisement if the broker or salesperson, as the case may be, is a member in good standing of the Canadian Real Estate Association. O. Reg. 539/20, s. 7 (3).

(5.1) If a registrant uses the trademark “REALTOR®” by itself or followed immediately by the term “broker” to describe a broker who is referred to in the advertisement or uses the trademark “REALTOR®” by itself or followed immediately by the term “salesperson” to describe a salesperson who is referred to in the advertisement, the registrant is not required to use any of the terms referred to in clause (4) (c) or (d) to describe the broker or salesperson, as the case may be. O. Reg. 539/20, s. 7 (3).

(6) A registrant who advertises shall not use a term to describe any registrant that is referred to in the advertisement if the term could reasonably be confused with a term that is required or authorized by subsection (4) or (5). O. Reg. 580/05, s. 36 (6).

(7) A registrant shall not include anything in an advertisement that could reasonably be used to identify a party to the acquisition or disposition of an interest in real estate unless the party has consented in writing. O. Reg. 580/05, s. 36 (7).

(8) A registrant shall not include anything in an advertisement that could reasonably be used to identify specific real estate unless the owner of the real estate has consented in writing. O. Reg. 580/05, s. 36 (8).

(9) A registrant shall not include anything in an advertisement that could reasonably be used to determine any of the contents of an agreement that deals with the conveyance of an interest in real estate, including any provision of the agreement relating to the price, unless the parties to the agreement have consented in writing. O. Reg. 580/05, s. 36 (9).

Inaccurate representations

37. (1) A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate. O. Reg. 580/05, s. 37 (1).

(2) A registrant shall not knowingly make an inaccurate representation about services provided by the registrant. O. Reg. 580/05, s. 37 (2).

Error, misrepresentation, fraud, etc.

38. A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate. O. Reg. 580/05, s. 38.

Unprofessional conduct, etc.

39. A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all of the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant. O. Reg. 580/05, s. 39.

Abuse and harassment

40. A registrant shall not abuse or harass any person in the course of trading in real estate. O. Reg. 580/05, s. 40.

Duty to ensure compliance

41. (1) A brokerage shall ensure that every salesperson and broker that the brokerage employs is carrying out their duties in compliance with this Regulation. O. Reg. 580/05, s. 41 (1).

(2) A broker of record shall ensure that the brokerage complies with this Regulation. O. Reg. 580/05, s. 41 (2).

Do you have a question of concern regarding the regulatory agencies that govern the real estate profession or obligations of REALTORS®? Just email me or fill out the contact form. I will be glad to answer your questions and offer advice.