TRESA: A New Era For Ontario Real Estate

On December 1, 2023, the government of Ontario, Canada introduced Phase Two of the Trust in Real Estate Services Act (TRESA), a ground-breaking move that replaced the outdated Real Estate and Business Brokers Act, 2002 (REBBA). TRESA governs Ontario’s real estate sales representatives, brokers, and brokerages, ensuring the interests of buyers and sellers are protected during some of life’s most important transactions.

Three of the significant changes TRESA brings, modernizing the decades old rules for the real estate sector, impact the following ensuring consumer protection and enhancing real estate professionalism.

1. Consumer and Realtor Relationships
2. Sharing Content of Offers
3. Code of Ethics for Realtors

Consumer and Realtor Relationships

Under TRESA, a notable transformation occurs as the concept of customer relationships and agreements is no longer permissible, marking a significant departure from the previous regulatory framework. This change serves to dispel the ambiguity surrounding the terms “customer” and “client,” which had been sources of confusion for some. In the wake of this reform, buyers and sellers now have the autonomy to make a distinct choice: they can either opt into representation agreements with Realtors and brokerages or choose to be a Self-Represented Party in a transaction. As a Self-Represented Party, consumers can navigate transactions independently, eschewing services from Realtors or brokerages—a departure from the previous REBBA regulations where customers could avail such services. On the contrary, those who enter into a representation agreement with a Realtor attain the status of a client, enjoying the privilege of ongoing services from Realtors and brokerages. This nuanced shift in categorization reinforces consumer choice and agency, aligning real estate practices more closely with individual preferences and needs.

Sharing Contents of Offers

During the offer process, TRESA allows Realtors, armed with written consent from the seller, to disclose the contents of offers. This newfound practice allows sellers to direct their Realtors in sharing the details of competing offers with potential buyers and their Realtors. The implications are profound, introducing a heightened level of transparency that stands to benefit sellers by potentially securing the optimal price for their properties. Sellers retain control over this disclosure, being able to decide which specific contents to share, with the caveat that sensitive personal information, such as a buyer’s name, remains protected. The empowerment of sellers in this regard fosters an environment where informed decisions can be made, enhancing the competitive nature of the market. For buyers, the significance lies in open communication with their Realtors about their comfort levels concerning the sharing of offer details, underscoring the importance of a collaborative and transparent relationship throughout the real estate transaction process.

Code of Ethics for Realtors

The ethical obligations of Realtors hold paramount significance in upholding the highest standards of professionalism within the real estate industry. As stewards of trust in real estate transactions, Realtors are entrusted with the responsibility to conduct their business with unwavering integrity, ensuring a commitment to honesty, transparency, and fair dealings. TRESA brings recent updates to the Code of Ethics for Realtors reflecting a concerted effort to articulate explicit requirements, establishing clear guidelines for Realtors to adhere to. These requirements encompass a spectrum of essential aspects, including but not limited to integrity, wherein Realtors are expected to uphold the highest moral and ethical principles in their dealings; quality of service, emphasizing the delivery of exceptional and client-focused services; and conflicts of interest, demanding transparency and the mitigation of any situations that could compromise the Realtor’s ability to act in the best interest of their clients. By delineating these ethical standards, the updated Code of Ethics aims to fortify the real estate profession, fostering a culture of trust, reliability, and ethical conduct.

As TRESA reshapes the real estate landscape, we usher in a new era of transparency, empowerment, and ethical conduct, promising a more resilient and consumer focused real estate environment in Ontario. Firstly, by creating clear distinctions between clients and Self-Represented Parties, offering consumers a more informed choice in presentation; secondly, by permitting Realtors to share details with seller consent, fostering transparency and potentially maximizing competition and property values; and thirdly, by updating the Code of Ethics for Realtors to serve as a cornerstone for ensuring that Realtors conduct their business with the utmost professionalism contributing to a trustworthy and ethical real estate environment.

More information regarding Phase Two of TRESA can be found on OREA’s website: www.OREA.com/TRESA

The information in this blog is not legal advice, and its contents are not guaranteed or warranted.