Buying, selling, or leasing real estate in Ontario involves important legal, financial, and strategic decisions. Under Ontario’s Trust in Real Estate Services Act, 2002 (TRESA), consumers now receive additional disclosures and information regarding the different types of relationships that may exist when working with a real estate brokerage.

One of the most important consumer education documents introduced under TRESA is the RECO Information Guide.

The guide helps consumers better understand:

• what representation means,
• the duties owed to clients,
• the risks of representing yourself,
• and the differences between brokerage representation, designated representation, and self-representation.

Understanding these relationships is important because the type of relationship you choose can significantly affect:

• the services you receive,
• confidentiality protections,
• negotiation guidance,
• loyalty obligations,
• and the level of professional advice available throughout a transaction.

What Is the RECO Information Guide?

The RECO Information Guide is a mandatory consumer disclosure document produced by the Real Estate Council of Ontario (RECO).

Ontario real estate agents are generally required to review the guide with consumers before providing services or assistance in a trade in real estate.

The guide explains:

• how representation relationships work,
• what duties are owed to clients,
• risks associated with self-representation,
• multiple representation considerations,
• and what consumers should review before signing representation agreements.

The guide was introduced to help consumers make more informed decisions regarding how they wish to proceed in a real estate transaction.

What Is a Client Relationship?

When you become a client of a real estate brokerage, you enter into a representation agreement with the brokerage.

As a client, the brokerage and/or designated representative owe you important legal and professional duties, including:

• promoting and protecting your best interests,
• confidentiality,
• disclosure obligations,
• avoiding conflicts of interest,
• loyalty,
• and providing professional advice and guidance throughout the transaction.

This relationship allows the brokerage or designated representative to:

• provide recommendations,
• negotiate in your best interests,
• advise you on pricing and strategy,
• discuss risks and opportunities,
• and assist with transaction decisions.

For many consumers, this is the relationship they expect when working with a REALTOR®.

What Is a Self-Represented Party?

Under TRESA, if you choose not to become a client of a brokerage, you may instead proceed as a self-represented party.

This means:

• you are representing your own interests,
• you are not receiving representation,
• and the brokerage does not owe you the same duties owed to a client.

The RECO Information Guide specifically explains that self-represented parties face important risks because they are navigating the transaction without professional representation while the other party may still be receiving advice and guidance from their own representative.

A self-represented party is responsible for protecting their own interests, which may include:

• determining value,
• reviewing transaction terms,
• preparing or reviewing agreements,
• understanding conditions,
• evaluating risks,
• and negotiating terms independently.

Consumers should carefully consider whether they fully understand the risks and obligations before proceeding without representation.

Important Difference: Assistance Is Not Representation

One of the most misunderstood concepts under TRESA is that a real estate agent may still provide limited assistance to a self-represented party while legally representing the client on the other side of the transaction.

However, this does NOT create a client relationship.

This is extremely important for consumers to understand.

If the agent represents the seller, for example:

• the agent’s duty is to the seller,
• not to the buyer who is self-represented.

Similarly, if the agent represents the buyer:

• the agent’s duty is to the buyer,
• not to the self-represented seller.

This means the self-represented party should not assume:

• the agent is protecting their interests,
• advocating for them,
• or providing strategic advice on their behalf.

The RECO Information Guide also explains that anything shared with the agent may need to be disclosed to the agent’s client where required in the client’s best interests.

For example:

• motivation to buy or sell,
• preferred pricing,
• negotiating flexibility,
• or preferred conditions
  may not remain confidential.

Brokerage Representation vs Designated Representation

TRESA also introduced designated representation in Ontario effective December 1, 2023.

Consumers now may encounter two primary representation structures.

Brokerage Representation

Under brokerage representation:

• the brokerage and all of its agents represent the client.

This means the entire brokerage owes duties to the client.

One agent may act as the primary contact, but legally the brokerage itself represents the client relationship.

Designated Representation

Under designated representation:

• one or more specifically identified agents are designated to represent the client.

The designated representative owes duties directly to the client, while other agents within the brokerage must treat the client impartially and objectively.

Designated representation was introduced to help reduce some of the complications associated with multiple representation situations.

Consumers should ask their brokerage:

• what type of representation is being offered,
• how it works,
• and what impact it may have on the transaction.

Understanding Multiple Representation

Multiple representation occurs when:

• a brokerage or designated representative represents more than one client with competing interests in the same transaction.

Examples may include:

• representing both buyer and seller,
• or representing multiple competing buyers on the same property.

Under Ontario law, multiple representation generally requires informed written consent from all affected clients before proceeding.

Consumers should understand that agreeing to multiple representation can significantly change:

• the advice available,
• negotiation limitations,
• confidentiality restrictions,
• and the brokerage’s ability to advocate fully for one client over another.

The RECO Information Guide explains that in multiple representation situations:

• brokerages must remain objective and impartial,
• cannot maintain undivided loyalty,
• and cannot advise clients on specific negotiating positions such as pricing or offer strategy.

Consumers uncomfortable with multiple representation may refuse consent and discuss alternatives with the brokerage.

Representation Agreements Matter

Many consumers focus only on commission discussions when reviewing representation agreements.

However, representation agreements are important legal contracts that should also clearly explain:

• the services being provided,
• the scope of representation,
• payment terms,
• holdover clauses,
• termination provisions,
• designated representation structure,
• and the duration of the agreement.

Consumers should carefully review all terms and ask questions before signing.

Clear communication and proper documentation help reduce misunderstandings and disputes later in the transaction.

Informed Consumers Make Better Decisions

The RECO Information Guide was introduced to improve transparency and help consumers better understand their options when working with Ontario real estate brokerages.

Every consumer’s situation is different.

Some consumers may prefer:

• full representation,
• limited service arrangements,
• or independent self-representation.

However, consumers should fully understand the differences between these relationships before proceeding.

Understanding:

• who represents you,
• whose interests are being protected,
• what duties are owed,
• and what services are actually being provided
  can have a significant impact on the outcome of a transaction.

Final Thoughts

Real estate transactions involve significant financial, contractual, and practical considerations. The relationship you choose with a brokerage affects the guidance, representation, confidentiality, and professional services available throughout the process.

Consumers are encouraged to:

• review representation agreements carefully,
• ask questions,
• understand their options,
• and seek independent legal advice where appropriate before making important real estate decisions.

Professional representation is not simply about completing paperwork — it is about helping consumers better understand risk, obligations, opportunities, and the implications of important transaction decisions.

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Written by Rodney Harvey, Broker of Record at Konfidis, Brokerage providing advisory-focused commercial, industrial, investment, and real estate brokerage services across Oshawa, Durham Region, and Ontario.

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