Phase two of the new regulations under the Trust in Real Estate Services Act (TRESA) comes into effect on December 1 in Ontario. TRESA replaces the Real Estate and Business Brokers Act (REBBA) and impacts how nearly 100,000 realtors will conduct business in the province.
In a statement, TRESA task force chair Ray Ferris says the new regulations will bring consumer choice, protection and transparency to the next level.
Designated representation, transparent offer process, SRP
“One of the most impactful changes coming on December 1st is the new transparent offer process option, which is at the discretion of sellers. Home sellers will now be able to allow their realtors to share the contents of offers with every buyer who submits an offer. This change is a big win for consumer choice and transparency, and aims to empower Ontarians to be confident when making the biggest purchase of their lives,” says Ferris.
“The new TRESA regulations are also introducing ‘designated representation’. In designated representation, the representation is between the designated real estate professionals (not the brokerage) and the consumer. To put it simply, this means you can work with the realtor of your choice, advising and advocating for you, whenever you want.”
Ferris says there is also the elimination of the term “customer” within the TRESA regulations. The difference between being a “client” or a “customer” during real estate transactions has been a source of confusion for some, and this change will alleviate that. A new term, self-represented party (or SRP), is introduced in TRESA to make it clear to real estate consumers that they are either represented as a client or they are not.
“The new regulations go into finer details but to put it simply, once TRESA is effective, real estate consumers can choose to be either a client of a brokerage or self-represented. The expectation is that former customers will become clients, as a self-represented party is not to receive any services from a brokerage,” he explains.
TRESA guidance hub
The Ontario Real Estate Association (OREA) has launched the TRESA Guidance Hub, a one-stop shop with all of the information realtors will need to help them navigate the new rules and regulations.
Christopher Alexander, president of Re/Max Canada, says REBBA is more than 20 years old.
“The industry evolves so much. Technology has sped up the way we do business and it’s presented new challenges and new opportunities. So, I think having an updated act for the industry to abide by is important,” he says.
“They’ve gotten really tough on bad actors which I think is really good. Because, let’s face it, when REBBA came out, property values were 25, 30 per cent of what they are today, and so agents are earning more on average per deal … So, having bigger fines and more teeth to help deter unscrupulous behaviour is a good thing.”
Alexander points out how the updates are redefining the agency relationship in some ways. “In Ontario, there used to be a customer service that you could offer under REBBA but now you can’t. You’re either representing a party or you’re not, which I also think is a good thing.
With any new policies, there’s going to be an adjustment period. I just hope that for any potential oversights that occur as a result of the new policy, OREA will be amenable to making the right changes if they have to. By all accounts and my experience with them, if they need to make a change, they will.”
Brokerages and realtors prepare
Karen Yolevski, chief operating officer of Royal LePage Real Estate Services, says realtors right now are very busy ensuring that they understand the new rules.
“We have been very, very active in terms of training our realtors, our broker managers and our owners to ensure that everyone is aware and has a good understanding of the new rules. They take a little time, of course, when something is new to ensure that (they’re) feeling confident and able to execute with confidence, but we’re confident that our people will get there and that realtors will be able to take these in stride as they have with so many other regulatory changes that they’ve seen over the last number of years,” she points out.
Yolevski also feels the act is good for consumers: “It’s good when there are rules that are in place to help consumers, and it’s good for our industry … We think that overall it’s very positive and that professionals will be able to show their value to consumers and the consumers will see their value.”
The COO notes that Royal LePage has been talking a lot to its realtors about designated representation, multiple representation and self-representation.
“There are different forms of representation that this contemplates. For those who are practicing, there are a lot of things that are very much the same in terms of different forms, maybe different names, nomenclature is different. One thing that is different, certainly, is the ability to share content of offers — that would be the thing that’s new. Many other things are amendments, changes, slight differences. But sharing the content of offers is certainly a new component here.”
Yolevski says the new regulations will introduce the ability to share the content of competing offers. A seller would be the one to decide what content is shared, but it can’t be personal information. For example, the seller could share the bidding prices.
“This is something that could not be done before under the legislation,” she mentions.
“We welcome the changes and the industry will adapt. The industry has been through changes in legislation before and we’ve seen this in other provinces, as well. Realtors as professionals take it in stride, they do their due diligence, they ensure that they’re educated and up to date and lots of positives will come from these changes as they’re rolled out and as realtors absorb the changes and they’re able to continue to provide consumers with guidance and support — as they always have. None of that has changed under the legislation.”
Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.
On December 1st home buyers will no longer be protected by a single set of operational rules across the industry nor will they even be able to trust a process that was established when they signed an offer will be the same one followed throughout it.
Can you imagine a consumer having to ask let alone know to ask each and every realtor they speak to about a listing what form of representation does the listing brokerage operate under. Then keep track of it when looking at or considering multiple homes.
I have had 3 clients and 2 family members review the RECO explainers and all universally said they have never been as confused as they were after watching.
Have you prepared even your Remuneration presentation let alone listing schedule of services?
Understanding TRESA is not for the faint of heart, each time I have watched the presentations I have felt sick, at first I thought I had caught a bug or eaten something that was tainted, but now I realize my gut feeling was telling me something was wrong. Some of the changes may be useful, but overall they are confusing and not consistent. To have Ray Ferris admit that you can work with a consumer under implied agency, means that we are continuing as we did before. Assistance and Help are basically the same, but we are not supposed to use our skills or knowledge??? I think when we tell a consumer that unless we have a Representation Contract signed I can’t give you advice or assistance will be very annoying. I recently dealt with a widow who was trying to sell her deceased husband’s business, of which she had very little understanding or knowledge, to tell this woman that I could not give her advice based on my skills or knowledge without her signature on an agreement with me would have made the whole process even harder for her. We seriously need to ensure that we are properly protecting the public and not making their need to sell or buy property more difficult.
Sellers want to get the most for their property. So, what seller is going to want to divulge pricing to any buyers. This TRESA solves nothing. It continues to protect only the seller. RECO is supposed to be a consumer protection agency, up ’til now, in regards to multiple bids, they have always only protected the seller, by not allowing bids to be open and transparent. All TRESA does is take that irresponsible decision away from RECO and put it on the seller.
I am totally agree with you. New Open bid process is nothing different as it required consent of the seller to divelge the price of competing offers. No seller will provide conset to this. So this is an eye wash that now we have open bid process in place.
I do agree that the open offer thing is still in the best interest of the sellers since the sellers get to decide what to share of which offer. All a seller wants to share is the highest price of an offer, an acceptable closing date from another offer, and no condition from a 3rd or 4th offer, these are pretty much all sellers want, highest price, best closing date, and no conditions.
All new and appreciate the input
So we are assume that mere postings (by default) will no longer be allowed. Until now agencies merely posted a listing on MLS but did not “represent” the Seller….not they are not allowed to provide any service without representation.
Excellent point !
These Rules & Regulations are so confusing!! I had Sellers not telling the truth to the agents and buyers in regarding the bidding prices. Sometimes ” Friends ” could be your ” Clients ” ; ” Clients ” could be your ” Friends ” …… so how could we define if they are ” Self -Represent ” themselves or not at the beginning ?? Without chatting with the agent and feeling comfortable with the agents , knowing that they are knowledgable , how can the consumer retain you as their representative ?