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TRESA starts December 1: What does it mean? How is the industry preparing?

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.”

 

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