QUICK HITS
- The Real Estate Council of Ontario is reducing registrant fees effective March 2023.
- The province’s regulator says reserves, which have grown recently with a surge in registrants, will fund the fee reduction.
- Some industry leaders say they would have liked to see more resources allocated to education and investigating complaints.
At a time when high inflation is leading to an increase in the cost of countless expenses, Ontario’s industry regulator is cutting fees.
On Tuesday, the Real Estate Council of Ontario (RECO) announced plans to slash registrant fees effective March 2023. In an email to members, RECO says the council’s reserves will fund the fee reductions and be in place for the foreseeable future.
Longtime Toronto Realtor, Barry Lebow, applauds the move, “They say they’ve got a reserve, and they don’t need the money.
In an email, RECO stated its reserve has grown, primarily over the past two years, with a surge in registrants. The regulator says it can deliver on its mandate using the funds in its coffers to cover any annual shortage. As of Oct. 31, more than 103,000 salespersons are registered with RECO.
“I think it’s legitimate. It’s no different than a good condominium corporation saying, ‘hey, we built up the reserve, we don’t need to raise our fee, and we’re not raising it for the next two years,'” Lebow adds.
For all new, renewal and reinstatement applications, the fee will drop from $390 to $306; for registrants who transfer brokerages, the cost drops from $100 to $25; for new and reinstatement applications, the review fee will drop from $200 to $50.
Though, not everybody in the industry is in favour of the impending price cut.
Ontario Realtor, Virginia Munden, said she was initially surprised by the news — that feeling quickly turned to frustration.
“I think we’re owed more,” says Munden. “Reducing our fees isn’t going to make us happy. I will pay double the fees if RECO is going to do (its) job properly and start penalizing the realtors acting unethically.”
The Oakville, Ont.-based realtor is referencing a recent CBC Marketplace investigation. Using hidden cameras, CBC journalists exposed a network of real estate agents, mortgage brokers, and bank employees, facilitating mortgage fraud in the GTA. The province’s regulator has remained tight-lipped on the matter, though it says it’s investigating the allegations.
RECO did not grant Real Estate Magazine’s request for an interview for this article, though a representative did respond to questions in an email. When asked whether it considered allocating excess funds towards investigating complaints or improving education for registrants, the regulator says:
RECO has reviewed immediate and mid-term initiatives supporting its strategic plan that could be accelerated or added to existing plans. These have already been built into RECO’s business planning model.
Munden wants to see action, “There is no accountability here. Provide us with a plan of action to combat this bad behaviour.”
Editor’s note: While RECO did not meet REM’s deadline, the council did answer questions via email the following day. The article has been updated to include its responses.
Jordana is the editor of Real Estate Magazine. You can reach her by email.
Send wrong message. Should have definitely created more resources to execute their mandate of “protecting the consumer”. Absolutely ridiculous!
Good for RECO for acknowledging its reserves are in excess. What I would like to see instead of a cut is more initiatives to raise the bar. If RECO can cut fees because of increased membership, that begs the question, what CREA, OREA and TRREB doing with all the excess funds they are getting from the same increased membership. Have you registered a standards complaint with TRREB lately? Seems to fall on deaf ears with no results. We really need an independent auditor to go in and examine the books and see where all this excessive membership money is going and where it could be redirected. My opinion, we have too many boards in Ontario, we really only need one, a provincial board that serves all members of Ontario along with RECO. CREA has outlived it usefulness due to technology. Independent companies are now doing a far better job, and CREA is standing in the way of progress. A good example of this is CREA’s new mandate to control concierge services such as the exclusive listing which is intended not to be controlled by the MLS services and restricts consumers choice.
It is just assisting the new Registrants and not going to curbe the Fraud or Illegal activity in the Industry we need tougher action on the fraudgulant activity and Protect the Consumers which is the Responsibility of RECO.
Best reporting yet! congrats and pls continue!
RECO’s move to reduce fees reflects a financial responsibility to its stakeholders. The fee paying registrant and the public benefactors deserve to have funding levels that are adequate, but not a penny more or a penny less.
Whether the services offered are adequate invokes debate related to enforcement or education, as the article points out.
Most competent, career minded registrants welcome an effort to cause stricter adherence to professional standards. No doubt, similarly, those registrants welcome education that supports that outcome.
Unfortunately for those so inclined, it is hard to accept the way regulators work is to enforce the minimum standard. More on that in a moment.
Unsurprisingly commentary will mix the foregoing desires with a financial picture assessment, and conclude that funds should not be given back but rather re-deployed to the desired efforts as above. It cannot work that way. It has to work the way RECO is operating on this point. Give the unneeded funds back. It would be preferrable to refund fees for lots of very sound reasons, including the reserve was built by those who paid it not those who will pay next year, many of which will be new registrants. As the way these funds are credited to registrants is a horse out of the barn, it is not worth arguing the manner of the giving too strenuously. Kudo’s to RECO for recognizing the proper use of the funds is not to sit in a reserve. (And the gifting of surplus resources back t is something all ORE should do also).
Without fulsome data, opinion about RECO’s performance is entirely subjective. For my part, my opinion is RECO should be more involved, more influential at service to its mandate, more encouraging of ORE as a partner in those roles. RECO should remove itself or its management team from commenting on marketing matters or what is best in class service to clients, customers and consumers – save and except for that which is narrowly defined application of the Act and regulations.
The education program to update registrants is wholly inadequate, IMO. From the opinions of others who are informed about or have taken the registration courses, they too are inadequate. That is worthy of attention.
However, beyond those RECO is not suited to overall training registrants to be truly professional, experienced and competent service providers. Despite being well resourced and keenly interested in the benefits of a properly trained professional, RECO’s only role is consumer protection; some education and enforcement are the parts that support this goal. Unfortunately, these two roles seem to fall short of what competent registrants believe is necessary.
The misunderstanding about the regulator role is simply having an expectation it should be accountable to registrants. That is where the fee issue becomes mixed in. Registrants are paying yes, but we are not the benefactors of the payment. We are paying for the sole right to perform services for others for which we are paid and the cost to regulate us in that service. We are not the group being protected by the legislation, or at least not the target of any protection.
However, we do pay a fee to others to protect our interests. ORE. That is where the resources are that should be utilized to ensure professionalism reigns.
I’m in fundamental agreement with Cameron on this, however!! The issue is that RECO has legislation behind it to act in a way that protects the consumer and not the real estate registrant. They are also responsible for ensuring those registrants meet the educational requirements that they deem appropriate. But anyone that has taken any form of post-secondary education and then found employment in their specific field of endeavour knows that you learn more in the first 6 months of on-the-job work than you do in the 3 or 4 years of formal education. It likely goes back childhood experiences where you can be told a hundred times to not do something because you might get hurt, but until you actually experience the hurt, the warnings don’t seem to sink in. Unfortunately, not all registrants are included in ORE, and ORE has no legal mandate to do anything when it comes to compelling professionalism. In fact, it is so poorly equipped in that regard that if a person is a Registrant, and an ORE brokerage decides to employ that person, ORE has no choice but to accept their membership, regardless of how misbehaved they may be. There are some limited situations where RECO has agreed to have ORE handle some of the minor infractions that impact ORE registrants more than the public, but that’s an area where more could be done.
Ah ORE, you never cease to disappoint. First the CREA nonsense now this. ORE’s deepest, truest recruitment strategy, goes something like this: ‘critical thinkers and true, insightful innovators need not apply’. Why do what’s right when you can do what’s easy? That’s just too much work, plus, there’s a little bit of risk! Take a look around, even in the comments and articles and the quality of the arguments for both sides. You will notice that there are only words, and sometimes even fancy and well constructed sentences and paragraphs, that support these latest decisions, while the evidence-based, rational, ethical, and forward-thinking arguments all appear to say ORE needs to give its head a vigorous shake. Change is coming, and decisions like these make me think (hope!?) ORE as it currently stands will not be any major part of what comes afterward.
So, agents in the profession and who have been in it contributing for a number of years, and really the ones who contributed to the excess funds are now subsidizing the fees of new agents coming into the business!
Way to go RECO!
How about giving back to the ones who built the excess funds over the years?!
I agree 100% with Virginia Munden. Use the funds in a smarter way.
RECO absolutely needs to LOOK into the problems caused by agents giving our business a bad name and the labeling the ones that respect it to be seen by the consumer with same eye.
Sure! Instead, make it easier to get into the business and have the agents in the CBC investigation teach the heard coming into the business.
Way to go RECO!