The Real Estate Council of Ontario (RECO) published new guidance outlining how real estate agents and brokerages should use artificial intelligence (AI) while meeting their regulatory obligations.

The guidance, released in October, comes as AI becomes more common in real estate, from drafting communications and preparing documents to conducting research and creating marketing materials.

RECO said it reflects a shift toward proactive regulation, with the aim of setting expectations early and helping agents establish safe practices as technology evolves, rather than responding after major problems arise.

RECO stresses that agents and brokerages remain responsible for all information and decisions involving AI, including compliance with the Trust in Real Estate Services Act (TRESA).

“AI should be used by real estate registrants for support only and never a replacement for professional judgment,” RECO states on its website.

The regulator warns that AI-generated content can contain errors, outdated information or false data. It says agents must independently verify all content before sharing it.

“You remain responsible for ensuring that any information provided to clients or the public is truthful, accurate and not misleading,” the guidelines state.

 

Violations could result in fines, suspension or revocation

 

RECO confirmed that agents and brokerages who breach TRESA or the Code of Ethics regulation through their use of AI could face fines, suspension or revocation of registration.

“The regulatory action RECO takes depends on the specific facts and circumstances of each case,” the regulator said in response to questions from REM.

RECO said the guidance does not introduce new obligations or a separate enforcement framework for AI. Instead, existing rules apply whether an agent uses AI to create a misleading listing description, alter an image in a way that misrepresents a property or improperly disclose confidential client information.

Consumers who suspect a listing or advertisement is misleading because of AI can submit a complaint directly to RECO.

 

Privacy, advertising and brokerage responsibilities

 

The guidance also raises privacy concerns, warning agents against entering confidential client information into public AI platforms.

Asked to clarify how that warning fits with its requirement for written client consent before entering personal details or contract terms into AI tools, RECO said the two instructions reflect agents’ existing confidentiality obligations.

“Personal, financial or confidential client or transaction information should never be entered into public AI platforms,” the regulator said.

RECO added that confidential client information cannot be disclosed without the client’s consent, and that brokerages and agents are also required to protect personal information.

For marketing, RECO says digitally altered property images must be clearly labelled and accurately reflect permanent features. AI-generated advertising must also comply with TRESA requirements, including rules around brokerage identification.

The regulator also advises brokerages to establish internal safeguards, stating that “brokerages should establish clear internal policies, training, and an approved tool list to ensure agents use AI safely.”

Agents are also encouraged to ensure any AI tools they use align with brokerage policies and have the approval of their broker of record.

RECO also recommends reviewing vendors’ privacy practices and security measures, including when existing real estate software introduces new AI features. It also recommends using tools built specifically for real estate to minimize risk.

The guidance also addresses intellectual property, directing agents to create original marketing content or obtain permission before adapting material from other brokerages.

 

AI policies taking shape across Canada

 

The guidance comes as real estate organizations across Canada grapple with how to regulate AI use. The British Columbia Financial Services Authority (BCFSA), for one, published its own AI guidelines in February 2024.

In a June 1 website post, the Canadian Real Estate Association (CREA) also emphasized that AI use does not diminish Realtors’ professional responsibilities, including those related to advertising accuracy under the Realtor Code. The association said it was developing resources and best practices to help members use AI responsibly.

As Real Estate Magazine reported in March, rules around AI-altered listing photos and how they’re enforced vary across the country, with some boards already issuing penalties for violations.