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TRESA to reshape business practices for Ontario realtors

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Phase 2 of the Trust in Real Estate Services Act (TRESA) comes into force on Dec. 1, and it will impact how Ontario’s 96,000 realtors do business.

TRESA replaces the decades-old Real Estate and Business Broker’s Act (REBBA), and three of the most significant changes include:

  1. Self-represented parties;
  2. Sharing the contents of offers; and
  3. Designated representation.


Self-represented parties


The difference between being a “client” or a “customer” during real estate transactions has been a source of confusion for some.

To eliminate confusion, the term “customer” will be removed from TRESA. Once TRESA is effective, real estate consumers can choose to be either a client of the brokerage or self-represented. The expectation is that former customers will become clients.  

TRESA also defines and puts rules in place for self-represented parties.

Put simply, a self-represented party is a consumer who chooses to represent themselves in a real estate transaction.

A self-represented party is not to receive any services from a brokerage. This is very different from being a customer who could receive services under REBBA.

So then, what can realtors do for self-represented parties? They can only provide assistance while ensuring that implied agency is not created.

TRESA states that implied agency is not created if “as a service provided to a client, or incidental to a service provided to a client, a registrant provides assistance to another person without encouraging the other person to rely on the registrant’s skill or judgement in response of a trade in real estate.”

In other words, providing assistance is acceptable as long as the self-represented party does not rely on the registrant’s skill or judgment.

For example, if a buyer who chooses to be self-represented asks you to show them another brokerage’s listing, you can’t. TRESA is clear that you can only provide assistance “as a service provided to a client.” Another brokerage’s seller is not your client.

Another example: A self-represented buyer is interested in purchasing one of your brokerage’s listings, and the buyer has a home to sell; the buyer should determine the language required in the purchase and sale agreement for the sale of their property. The realtor assisting the buyer should not recommend the wording for a condition because determining the correct wording requires their “skill or judgment.”


Sharing the content of offers


Another big change effective Dec. 1 is being able to share the content of competing offers.

REBBA requires that all buyers are made aware of the number of competing offers. This requirement remains under TRESA. However, TRESA allows realtors to share the contents of offers with every buyer who submits an offer at the seller’s written direction.

A seller shall decide which content is to be shared so long as the information disclosed is not the personal information of the person making the offer. Examples would include the buyer’s name or the address of the buyer’s property should the buyer have a home to sell. 

It is important to note that seller’s agents are not required to decide if they will share the content of offers at the time their property is listed for sale or not later than the presentation of offers. For this reason, buyers’ agents should ask their clients how they would feel if the contents of their offer were shared with other buyers. 

If a buyer is opposed to a seller disclosing the terms of their offer, the realtor may want to recommend a condition in the offer to this effect. 


Designated representation


The last of the many changes under TRESA is the introduction of designated representation.

The agency relationship exists between the brokerage and all its representatives in common law agency. When practicing designated representation, however, the agency relationship is between the consumer and the realtor designated as their agent.

By way of example, ABC Realty Inc. has a listing, and the brokerage also happens to represent a buyer who is interested in that listing. In other words, the brokerage represents the seller and the buyer; today, this is known as multiple representation. Practicing a designated representation model, the listing agent would be able to represent the seller, while another agent at ABC Realty Inc. would represent the buyer on behalf of the brokerage to advocate solely for the buyer. The brokerage would retain oversight responsibility for the designated agent’s fulfillment of their duties to the clients.

It is important to note that brokerages need not pick one agency model over the other. The Ontario Real Estate Association (OREA) was successful in convincing the provincial government to allow brokerages to select either common law agency or designated representation on a transaction-by-transaction basis. 

There are many other regulations under TRESA that Ontario realtors must be aware of. Members can visit OREA’s Guidance Hub to find the information needed to navigate the new regulations. This includes a detailed FAQ, backgrounders and video explainers that dive into important topics.



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