Regulation - LGIC
Phase 2 Regulations - Real Estate and Business Brokers Act, 2002 / Trust in Real Estate Services Act, 2020
Regulation Number(s):
O. Reg. 567/05
O. Reg. 579/05
O. Reg. 365/22
O. Reg. 367/22
O. Reg. 579/05
O. Reg. 365/22
O. Reg. 367/22
Instrument Type:
Regulation - LGIC
Bill or Act:
Real Estate and Business Brokers Act, 2002
Summary of Decision:
The Trust in Real Estate Services Act, 2020 (TRESA, 2020), received Royal Assent in March 2020. TRESA, 2020 amends the Real Estate and Business Brokers Act, 2002, now renamed the Trust in Real Estate Services Act, 2002 (TRESA, 2002).
Regulations are necessary to bring the legislative changes in TRESA, 2020 into force. On October 1, 2020, parts of TRESA, 2020 and related regulations came into force. This first phase of changes made it possible for real estate salespersons and brokers to incorporate and be paid through a personal real estate corporation. The changes also have allowed registrants to use terms such as "real estate agent" and REALTOR® (where applicable) to describe salespersons and brokers in their advertisements.
On December 1, 2023, a second phase of legislative and regulatory changes under TRESA, 2020 came into force. Among other things:
• The Real Estate and Business Brokers Act, 2002 (REBBA) was renamed the Trust in Real Estate Services Act, 2002.
• A new Code of Ethics regulation replaced the previous Code of Ethics regulation. The new Code articulates registrant requirements in relation to matters such as integrity, quality of service and conflicts of interest. Technical and procedural requirements from the previous Code were moved to other regulations under TRESA, 2002.
• Brokerages are now permitted to share details of competing offers, excluding personal or identifying information, with any person making a written offer if directed to do so by their seller client.
• Disclosure requirements for registrants have been enhanced and the Real Estate Council of Ontario (RECO) has developed an information guide that registrants must provide to individuals before providing services or assistance.
• New powers and tools have been provided to RECO including through expanding the scope of its discipline committee.
• Brokerages may now enter designated representation agreements with clients, subject to appropriate safeguards, so that clients can be represented by a specific broker or salesperson at the brokerage who will actively promote their interests in a trade.
Regulations are necessary to bring the legislative changes in TRESA, 2020 into force. On October 1, 2020, parts of TRESA, 2020 and related regulations came into force. This first phase of changes made it possible for real estate salespersons and brokers to incorporate and be paid through a personal real estate corporation. The changes also have allowed registrants to use terms such as "real estate agent" and REALTOR® (where applicable) to describe salespersons and brokers in their advertisements.
On December 1, 2023, a second phase of legislative and regulatory changes under TRESA, 2020 came into force. Among other things:
• The Real Estate and Business Brokers Act, 2002 (REBBA) was renamed the Trust in Real Estate Services Act, 2002.
• A new Code of Ethics regulation replaced the previous Code of Ethics regulation. The new Code articulates registrant requirements in relation to matters such as integrity, quality of service and conflicts of interest. Technical and procedural requirements from the previous Code were moved to other regulations under TRESA, 2002.
• Brokerages are now permitted to share details of competing offers, excluding personal or identifying information, with any person making a written offer if directed to do so by their seller client.
• Disclosure requirements for registrants have been enhanced and the Real Estate Council of Ontario (RECO) has developed an information guide that registrants must provide to individuals before providing services or assistance.
• New powers and tools have been provided to RECO including through expanding the scope of its discipline committee.
• Brokerages may now enter designated representation agreements with clients, subject to appropriate safeguards, so that clients can be represented by a specific broker or salesperson at the brokerage who will actively promote their interests in a trade.
Analysis of Regulatory Impact:
Phase 2 changes (other than designated representation):
• The Phase 2 changes under the Trust in Real Estate Services Act, 2020 enhance consumer protection, enable individuals to make more informed decisions when interacting with a registrant in a trade in real estate, strengthen and streamline ethical requirements, and raise professional standards among real estate registrants. The changes respond to longstanding calls from the sector for regulatory changes to enhance professionalism and increase consumer confidence.
• Direct compliance costs to the sector relate to learning about the regulations; providing individuals with a copy of the information guide and explaining its contents; updating forms for agreements, disclosures, and the offer process; providing disclosures, including information to self-represented parties, and written acknowledgements; and responding to transactional data requests.
Phase 2 changes - designated representation:
• The Phase 2 changes to permit designated representation are permissive rather than mandatory, increasing flexibility for brokerages by providing the option to enter into designated representation agreements with clients. The changes also increase choice and flexibility for the public, provide greater clarity and enhance consumer protection.
• Direct compliance costs for brokerages that choose to enter into designated representation agreements with clients relate to learning about the regulations; updating brokerage policies and processes; and updating forms for designated representation agreements.
• The Phase 2 changes under the Trust in Real Estate Services Act, 2020 enhance consumer protection, enable individuals to make more informed decisions when interacting with a registrant in a trade in real estate, strengthen and streamline ethical requirements, and raise professional standards among real estate registrants. The changes respond to longstanding calls from the sector for regulatory changes to enhance professionalism and increase consumer confidence.
• Direct compliance costs to the sector relate to learning about the regulations; providing individuals with a copy of the information guide and explaining its contents; updating forms for agreements, disclosures, and the offer process; providing disclosures, including information to self-represented parties, and written acknowledgements; and responding to transactional data requests.
Phase 2 changes - designated representation:
• The Phase 2 changes to permit designated representation are permissive rather than mandatory, increasing flexibility for brokerages by providing the option to enter into designated representation agreements with clients. The changes also increase choice and flexibility for the public, provide greater clarity and enhance consumer protection.
• Direct compliance costs for brokerages that choose to enter into designated representation agreements with clients relate to learning about the regulations; updating brokerage policies and processes; and updating forms for designated representation agreements.
Further Information:
Proposed amendments to General Regulation
Proposed amendments to Educational Requirements, etc. Regulation
Proposed new regulation - Code of Ethics
Proposed new regulation - Discipline Committee
Discussion Paper
Proposal Number:
21-MGCS035
Posting Date:
April 29, 2025
Summary of Proposal:
On March 4, 2020, the Trust in Real Estate Services Act, 2020 (TRESA, 2020) received Royal Assent. TRESA, 2020 amends the Real Estate and Business Brokers Act, 2002 (REBBA), the legislation that governs real estate brokerages, brokers and salespersons (registrants) in Ontario. REBBA and its regulations are administered and enforced by the Real Estate Council of Ontario (RECO).
The Ministry of Government and Consumer Services is now consulting on the second phase of draft regulations needed to bring additional provisions of TRESA, 2020 into force, including:
New Code of Ethics Regulation
The ministry first consulted publicly on a proposed updated, principle-based Code from June 1 through July 2, 2021. Informed by the feedback from that consultation, the ministry is proposing further updates to the principle-based Code and is bringing them forward now in conjunction with related regulatory proposals. This proposal includes moving technical and procedural requirements in the current Code to other regulations under REBBA.
Offer Process
The ministry is proposing changes to give the public more choice in the real estate trade process by allowing a registrant to conduct an open offer process and disclose the details of competing offers at the seller's direction. Registrants could not disclose any personal information or identifying information through this process.
Information and Disclosure Obligations
The ministry is proposing changes to improve the information registrants must provide to buyers, sellers and others in relation to providing real estate services. This is intended to help the public understand their choices for engaging or interacting with a registrant, as well as the different obligations registrants have under the different forms of engagement or interaction.
Real Estate Council of Ontario Powers and Tools
Changes are being proposed to help RECO operate more efficiently and focus its compliance and enforcement efforts where they are needed and most effective. The proposed changes include: a) updates to the rules about the information RECO's Registrar must make publicly available; b) specifying the purposes for which the Registrar can require registrants to provide transactional data and related information to the Registrar; and c) providing the Registrar with additional authority over administrative matters related to certain advertising, record-keeping and notice requirements.
New Discipline Committee Regulation
The ministry is proposing to create a new regulation dealing with the rules and procedures of the Discipline Committee, incorporating the relevant provisions currently found in the Code and General Regulation.
Auctioneer Exemption
The ministry is proposing regulation changes to add a condition to the exemption for auctioneers. The draft regulation proposes that as a condition to qualify for the exemption, an auctioneer must have no duties other than receiving, managing and recording competing bids and accepting the highest bid as part of an auction bidding process.
The ministry is also proposing to proclaim certain provisions of the Trust in Real Estate Services Act, 2020.
Interested parties may submit comments by responding to this posting or by sending an email to rebba@ontario.ca no later than January 24, 2022. The ministry is proposing the Phase 2 regulations, if approved, would come into force on September 1, 2022.
The Ministry of Government and Consumer Services is now consulting on the second phase of draft regulations needed to bring additional provisions of TRESA, 2020 into force, including:
New Code of Ethics Regulation
The ministry first consulted publicly on a proposed updated, principle-based Code from June 1 through July 2, 2021. Informed by the feedback from that consultation, the ministry is proposing further updates to the principle-based Code and is bringing them forward now in conjunction with related regulatory proposals. This proposal includes moving technical and procedural requirements in the current Code to other regulations under REBBA.
Offer Process
The ministry is proposing changes to give the public more choice in the real estate trade process by allowing a registrant to conduct an open offer process and disclose the details of competing offers at the seller's direction. Registrants could not disclose any personal information or identifying information through this process.
Information and Disclosure Obligations
The ministry is proposing changes to improve the information registrants must provide to buyers, sellers and others in relation to providing real estate services. This is intended to help the public understand their choices for engaging or interacting with a registrant, as well as the different obligations registrants have under the different forms of engagement or interaction.
Real Estate Council of Ontario Powers and Tools
Changes are being proposed to help RECO operate more efficiently and focus its compliance and enforcement efforts where they are needed and most effective. The proposed changes include: a) updates to the rules about the information RECO's Registrar must make publicly available; b) specifying the purposes for which the Registrar can require registrants to provide transactional data and related information to the Registrar; and c) providing the Registrar with additional authority over administrative matters related to certain advertising, record-keeping and notice requirements.
New Discipline Committee Regulation
The ministry is proposing to create a new regulation dealing with the rules and procedures of the Discipline Committee, incorporating the relevant provisions currently found in the Code and General Regulation.
Auctioneer Exemption
The ministry is proposing regulation changes to add a condition to the exemption for auctioneers. The draft regulation proposes that as a condition to qualify for the exemption, an auctioneer must have no duties other than receiving, managing and recording competing bids and accepting the highest bid as part of an auction bidding process.
The ministry is also proposing to proclaim certain provisions of the Trust in Real Estate Services Act, 2020.
Interested parties may submit comments by responding to this posting or by sending an email to rebba@ontario.ca no later than January 24, 2022. The ministry is proposing the Phase 2 regulations, if approved, would come into force on September 1, 2022.
Contact Address:
Policy, Planning and Oversight Division
Ministry of Public and Business Service Delivery and Procurement
56 Wellesley St. W., 6th Floor
Toronto, ON M7A 1C1
Ministry of Public and Business Service Delivery and Procurement
56 Wellesley St. W., 6th Floor
Toronto, ON M7A 1C1
Effective Date:
December 1, 2023
Decision:
Approved