How real estate representation is changing before our very eyes
As the real estate world in Ontario waits in earnest for the implementation of TRESA (Trust in Real Estate Services Act) to replace REBBA (Real Estate and Business Brokers Act), we will regularly update our blog to outline and elucidate the changes forthcoming. Most recently postponed beyond the expected April 1st, 2023 deadline, TRESA will play a pivotal role in the improvement of real estate professionalism and representation in Ontario.
Starting with the bare basics, under TRESA, a “client” is a person receiving services, including representation under a representation agreement with a brokerage, in respect of a trade. The difference under these redefined terms is the insistence that services, opinions and advice can only be provided to clients, regardless of the scope of services being provided. In this context, the customer service agreement is thereby eliminated, and the definition of customer in any agreement is no longer recognized. A party to a trade now becomes a “client” or a “self-represented party.” However, to avoid any mistaken interpretation of this term, a self-represented party does not replace the designation of customer. Services can only be provided to clients, thereby clarifying the difference between the two. Under TRESA, customer service agreements cannot be entered into, amended, or even extended. And those customer service agreements already in place, will automatically expire 120 days after TRESA comes into effect.
A “self-represented party” is defined as a party who is not a client of a brokerage with respect to a trade. This definition, in essence, determines a client’s independence from receiving services from a registrant. Instead, such a party has chosen to represent themselves. Under TRESA, registrants are prohibited from providing services, opinions, or advice to a self-represented party. In order for a registrant to provide assistance to a self-represented party, the registrant will be required to provide both a mandatory RECO Information Guide, and the mandatory RECO Information and Disclosure to Self-Represented Party form, to the self-represented party.
Stay tuned for more education on this new direction in real estate representation.
