Saturday , April 17 2021

Ontario is studying the renovation of the real estate rules in the corridors

In case consumers have the right to see competing offers on the same property. Should a real estate agent represent both the buyer and the seller in the same transaction?

These are some of the issues that the province is considering in a modernization of the 2002 norms governed by the Ontario real estate industry, known as the Real Estate Brokers Law (REBBA).

The Ministry of Government and Consumer Services collects ideas to promote consumer protection and improve the professionalism of the industry through an online survey to close on March 15.

"One of the most important things we are going to do as people or families is to buy a home. We want to make sure that we are with time. We want to make sure that we listen to both the consumer and the professional and make sure that we have legislation that reflect the current economy and the world today, "said Minister Bill Walker.

The update of REBBA began with the previous Liberal Government, which modified the legislation to allow the regulatory agency, the Ontario Real Estate Council (RECO), to double the fines for agents and brokers who violated the ethical code.

But the liberals were voted out of office before the new ones were decided on the education of industry, professional practices, language and disclosures.

A query document published by the Progressive Conservative government of the province places reinforced powers for RECO on the table, suggesting more severe sanctions for non-regulatory realtors.

"Now RECO disciplinary procedures are archaic. Consumers who file a complaint can wait for years for resolution," said the Ontario Real Estate Association CEO (OREA), Tim Hudak, a former Ontario PC party leader . RECO should be able to dismiss the realtors and force them to hand over their commissions that can overcome the sanctions, he said.

"The average price (for a house in 2002) was $ 275,000. You can not buy a hut on the back of anyone today for this price," Hudak said.

Changes in some practices, including the privacy surrounding competing offers, will be difficult, for example some agents.

  • Multiple offers: Keeping the confidential multiple offers among buyer buyers has been criticized for raising prices in hot markets.

Elli Davis of Royal LePage does not want to see her change. "I think a buyer has the opportunity to make his best offer. They will know if they are in competition. They will know how many offers there are in total and I think that there is enough to know. I do not think it's correct that someone sees the private offer of another buyer, "he said.

John Pasalis, from Realosophy Brokerage in Toronto, said he can not see how the details of the offer do not guarantee the same confidentiality as other businesses.

But he acknowledged that the system is problematic. "Sometimes, they end up getting this buyer paying $ 50,000 to $ 100,000 more than he needed because it is a blind auction," although the highest price offer does not always win, Pasalis said. Sometimes sellers want different conditions instead of more money.

Offers must be disclosed only with the consent of all parties, starting with the seller, who would have the final decision to know if it is an open bidding process, said the RECO recorder, Joe Richer. He points out that it is interesting for the seller to keep private offers.

"What is this solution in a wider public interest? Let's reduce the risk of opportunity for someone to empty everyone out of the water with $ 50,000 (bid) during the next best offer. You will not have this because everyone will see everything. As a seller, he could say: "I want an opportunity in this opportunity to slip land," Richer said.

Nothing prohibits the kind of open tender auction that is standard in Australia, he said. "What happens is that, in North America, it is seen as a firefight. You will not expect to pay the highest price, you will expect to pay the cheapest price," Richer said.

  • Completion: known as a "dual agency", where an agent represents the buyer and the seller in a single transaction, he must finish off in Ontario, as British Columbia has banned the practice, says RECO. Supports a system called Compulsory designated representation that allows an intermediary to manage the two ends of an agreement, but a different agent must represent each client and intermediation should ensure that both agents do not share customer information.

There would be exceptions for remote areas with limited real estate services or circumstances such as handling a family property.

That the act allows real estate agents to act on behalf of clients while serving another person known as "client" is "limited to non-ethics," said Richer. The real estate agent is acting in the interest of a customer. They can provide services to the client, but they do not have the same fiduciary duty.

OREA has said that, as in the case of Alberta, buyers and sellers should sign a declaring form that they understand that they use the same agent. But the real estate agent will not allow sharing of any confidential information.

Davis says he has sold many of the houses that he has listed to his own clients. "If I hire to sell a property and I have an advantage and port … (this), this should be interpreted as a good thing, not bad, as long as it reveals that it could be on both sides of the transaction, I see no problem (with) that, "he said.

There are about 82,000 realtors and brokers in Ontario. RECO fined 69 individuals and six brokers a total of $ 712,950 in 2017. Among the 2,926 complaints received by the agency this year, the handling of competitive bids and competent services was one of the more common It represented 9 percent and 8 percent of totals, respectively.

Tess Kalinowski is a Toronto-based journalist who covers real estate. Follow it on Twitter: @ Tesskalinowski

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