The Trust in Real Estate Services Act (TRESA), effective December 1, 2023, brings key changes to empower Ontarians in their real estate transactions. It focuses on educating buyers and sellers on their rights and what is legally required of a real estate agent.
The Trust in Real Estate Services Act, (TRESA), is consumer protection legislation governing the conduct of real estate agents and brokerages trading in real estate in the province of Ontario. It replaces The Real Estate and Business Brokers Act, also known as REBBA (2002).
REALTORS® are mandated to provide consumers with an information guide and explain the contents of the guide before providing any services to Home Buyers or Home Sellers.
So as a home buyer or a home seller, this is the first form that you would need to review and sign to formalize your working relationship with your Realtor.
As a Buyer or a Seller you must acknowledge that the real estate agent you are working with has provided you with the The Real Estate Council of Ontario’s (RECO) Information Guide, and explained the content.
You can view and read the entire TRESA Information Guide here.
To summarize, TRESA aims at facilitating the following:
A Clear and Open Approach to Offers
Sellers can now choose to disclose information about competing offers to potential buyers. All confidential details that could reveal the identity of the prospective buyer will be kept confidential.
In this updated transparent offer process, the seller has the flexibility to opt for either an open or closed offers approach. In the case of an open offer process, the buyer will receive information about competing offers, including prices, terms, conditions, deposits, and closing dates.
It’s important to note that the seller retains the right to change their decision at any point during the offer process, provided the seller’s agent includes this clause.
Transitioning from Customers to Clients
In the past, real estate professionals operated with buyers and sellers under the Real Estate and Business Brokers Act (REBBA), categorizing them as either clients or customers.
Recognizing the confusion these terms caused among the public, the Ontario Real Estate Association (OREA) introduced a shift towards using the terms client and self-represented party (SRP).
In the current framework, when an individual opts not to have representation in a real estate transaction, they are now identified as an SRP.
This designation comes with access to more information about the associated risks and the potential assistance they can receive from a real estate agent.
The term client is now reserved for individuals receiving dedicated representation from a real estate agent.
Revisions to the REBBA Code of Ethics
The Code of Ethics has undergone updates, placing a significant focus on integrity, quality of service, and conflicts of interest.
The latest version of the Code is notably more concise than its predecessor, condensing all ethical obligations that real estate agents must adhere to.
Technical and procedural recommendations have been relocated to the general regulations, streamlining the Code’s content.
This reduction in size, now spanning two pages as opposed to the previous 11, is aimed at providing real estate agents with a more accessible and navigable reference for regulatory compliance.
Improved RECO Discipline Procedures
The Real Estate Council of Ontario (RECO), the regulatory authority for real estate professionals in Ontario, has enhanced its disciplinary process.
Formerly, RECO could only address allegations of non-compliance with the Code of Ethics. However, it now has the authority to hold real estate registrants accountable for non-compliance related to TRESA.
Additionally, RECO is empowered to take actions such as suspension, revocation, or the imposition of conditions on a real estate agent’s registration.
Introduction of Designated Representation Agreements
Presently, real estate agents have the option of engaging in multiple representation, wherein one agent represents both the buyer and seller, albeit with limited disclosure of information.
While multiple representation continues to be a valid approach, the advent of designated representation introduces a new dynamic. Under this arrangement, a client can opt for designated representation, allowing two real estate agents from the same brokerage to represent a buyer and a seller in the same transaction.
This enables agents from the same brokerage to share more information, providing mutual benefits to both the buyer and seller. This real estate model is already successfully implemented in other provinces, including Alberta and Nova Scotia.
The incorporation of designated representation into TRESA marks a historic moment for Ontario real estate agents, equipping them with the necessary tools to act in the best interests of their clients.
Read full details in the TRESA Information Guide.