A new ‘watchdog’ on the realty block
OREA reinvents itself after losing education function
The Ontario Real Estate Association (OREA) is calling for tougher fines for realtors who break the rules and updated industry standards for transactions where the same agent acts for the buyer and seller.
The association says it is looking out for consumers as well as agents by declaring itself a “watchdog” for the real-estate industry’s regulatory agent, the Real Estate Council of Ontario (RECO).
RECO remains responsible for professional realestate standards, including fines for agents who violate the real-estate act. It also provides continuing education for agents already registered to practise in the province.
OREA has, for years, been RECO’s training provider for new realtors working towards being registered agents. That has been the association’s core function and a key source of revenue. But this year, RECO named Humber College and its partner NIIT Canada as the new realtor training body starting in mid-2019.
So OREA is re-branding and re-orienting itself as the voice of the real-estate industry and an advocate for home ownership in Ontario. The change comes as the Ontario government is reviewing the Real Estate Business and Brokers Act of 2002.
In a five-year strategic plan, it promised more direct communication with the 70,000 real estate agents it represents through Ontario’s 39 real estate boards. Realtor members pay $110 annually in dues to OREA through their boards.
Last year, the association hired former Ontario Progressive Conservative Party leader Tim Hudak as its CEO. He spoke to the Toronto Star about re-positioning the organization. The following is an edited version of that interview:
Are you reinventing your organization because you’ve lost your education mission?
A number of things came together. Consumers have become increasingly sophisticated and demanding when it comes to real estate purchases. Technology is changing faster than ever and, given the hot housing market we saw in the spring of 2017, government and media are watching closely.
Combine that with the fact that OREA will no longer deliver real estate education after 2020, it was a perfect opportunity for us to build a new OREA.
But would you be building a new OREA if you hadn’t lost the education component?
I suspect so. The (OREA) board wanted to contribute at a higher level when it comes to public affairs. They wanted to do more in terms of being pro-homeowner, lining up with consumers on the issues and raising industry standards.
OREA’s strategic plan prescribes higher standards of education for realtors. Aren’t the current standards high enough or are you concerned that a new education provider will lower the standard?
A lot of the professional standards and education requirements that were set in 2002 — fines, for example — reflect the market of 15 years ago but not today. When the legislative and regulatory rules were set we didn’t have social media, a big part now of realtor advertising. Consumers have far more tools on hand. That really calls for raising the bar on professional standards and on education.
Over the years, OREA has asked for a tougher curriculum to raise the bar. RECO has been slow to act on that so we’re upping the pressure.
Are there too many realtors?
I would challenge anybody to find a more competitive industry. Many realtors will go through the education system, but up to 50 per cent don’t make it back to a second year.
That tells me we could do a much better job of putting practical education in the curriculum. So we have become smart when it comes to the technical aspects of the job but we could do a better job when it comes to the negotiations, the bidding process, building and running your own business. We’re going to become much greater champions of raising the bar so realtors graduate and can be successful and give the best advice to consumers.
What is it OREA does that realestate boards such as the Toronto Real Estate Board don’t do?
Local boards collect (sales) data and share it with provincial and federal associations. They also have their own arbitration in case there’s a dispute between realtors about a transaction. They try to solve it at a local level. The provincial association, our main function besides education, has been government relations, supporting the Realtor trademark brand through higher quality standards, standard forms and leadership training. If we had a whole series of 100 websites with real-estate information, that would not be good for the consumers. On a lobbying level too it’s important to have a single voice.
The strategic plan refers to technology as a threat to the industry. What technology?
There’s always a risk people will just use the latest app as opposed to calling a realtor. But U.S. studies have shown that the number of transactions involving a realtor has actually increased. The thing about real estate is you’re making an investment on where you’re going to raise your family. They want to have somebody to find good properties and advocate for them when they’re spending so much money. We want to make sure our members are using the best technology to better service their customers and to give them more time in direct contact with customers.
What’s OREA’s position on doubleending, where the same agent represents the buyer and the seller?
We’re calling for doubling of the fines for those who break the rules or take advantage of consumers. The model we’ve brought forward is called designated representation. It’s very similar to models in Alberta and Nova Scotia. It means a realtor cannot represent both sides of the deal. They can only have a fiduciary duty on one side. Ultimately, it does allow consumers to choose a realtor they trust. It’s just a realtor could not have a fiduciary responsibility on both sides. That relationship would become what’s called a transactional relationship. The realtor could bring parties together and help facilitate a bid that they negotiate between themselves. But the realtor would be prohibited from providing any insider information such as what to offer on a home or the buyer or seller’s motivation.