Reviewing multiple representation
I understand the rules around multiple representation by real estate reps is being reviewed. When this will happen and what could change?
The Ontario government’s review of multiple representation was launched at the end of this past June. I’d like to provide some background and context.
In April, the government announced the “Ontario Fair Housing Plan,” which included a package of measures intended to help more people find affordable homes, increase supply, protect buyers and renters, and bring stability to the real estate market. Part of those measures included a commitment to review the Real Estate and Business Brokers Act, 2002 (REBBA) and its regulations, which is the legislation that the Real Estate Council of Ontario (RECO) enforces. It includes provisions relating to practices such as multiple representation — also known as dual agency or double-ending, when a brokerage represents both the buyer and seller. One of the most common forms of multiple representation involves a real estate salesperson or broker representing the buyer and the seller, and in the same transaction. There are very strict disclosure and consent rules in place because, at its core, there is an inherent conflict of interest when one person represents a buyer and a seller. These two parties to a trade have different interests: a seller’s primary goal is likely to sell their property for as much money as they can, whereas a buyer would aim to purchase a property for as little as they can.
Over the past few years, multiple representation emerged as a growing issue. At RECO, we saw an increasing number of questions and complaints related to the practice. So, in March 2016, we issued a Registrar’s Bulletin to real estate professionals to clarify and emphasize the rules.
In January of this year, RECO submitted recommendations about how to enhance the rules in REBBA’s Code of Ethics around multiple representation so that consumer protection is strengthened. We recommended the Ontario government revise the rules to:
Prevent or prohibit conflict-ofinterest situations;
Eliminate or drastically reduce the financial benefits of acting unethically;
Ensure consumers are provided with clear, consistent information regarding the nature of their relationship with their representative, and the services they’ll provide
Provide RECO with appropriate tools and penalties to respond to consumer harm.
We’re happy that the government has committed to modernizing the rules for real estate professionals and we look forward to being a key participant in the review.
There are two phases for the review, the first of which is taking place right now with a focus on multiple representation. Phase 2 will encompass a broader review of the rules and it is scheduled to begin in spring 2018.
From now to July 24, you have an opportunity to provide your input about Phase 1. You can read the government’s consultation paper at ontariocanada.com/registry. This is a key step in changing this legislation, and so we hope that you will take the time to engage in this opportunity to provide your feedback. Joe Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to askjoe@reco.on.ca. Find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at youtube.com/RECOhelps.
Ontario’s Fair Housing Plan is the first phase of addressing multiple representation, which is when a broker works on both ends of a sale