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Brian Madigan LL.B., Broker
BRMadigan@Rogers.com

RE/MAX West Realty Inc.,
Brokerage
Independently owned and operated

96 Rexdale Blvd. 
Toronto, Ontario 


Phone: 416-745-2300

Cell: 647-404-8150 
Toll Free: 1-888-507-0817

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Real Estate Legislation Changes November 2013

November 29, 2013 - Updated: November 29, 2013

 

There are some changes to the Real Estate and Business Brokers Act, 2002.

 

They just passed 3rd Reading and are expected to come into force next month.

 

Essentially, there are three issues:

 

  1. all agreements are to be in writing,
  2. commissions can now be a fixed dollar amount, a fixed or decreasing percentage of the sale price, or both, and
  3. the selling or listing brokerage in multiple offer situations must retain certain evidence for RECO audit in order to prove the number of bids.

 

The evidence to be retained could be copies of the offers or certain other documents to be prescribed. In this regard, OREA could draft a form to be signed by the bidders or the representatives confirming that they submitted a bid. This way, the actual offer remains confidential, which protects the bidders.

 

This alternate form of documentation will have to be developed over the next month. December is usually the month selected for changes in documentation and the introduction of new documents.

 

Here is a copy of the changes which passed together with commentary:

 

"REAL ESTATE AND BUSINESS BROKERS ACT, 2002

   1.  The Real Estate and Business Brokers Act, 2002 is amended by adding the following section:

Offers to purchase real estate

   35.1  (1)  No registrant shall,

  (a)  while acting on behalf of a purchaser, present an offer to purchase real estate except if the offer is in writing;

  (b)  represent to any person that a written offer to purchase real estate exists except if the offer is in writing.

Records

   (2)  A brokerage acting on behalf of a seller shall retain, for the period of time prescribed, copies of all written offers that it receives to purchase real estateor copies of all other prescribed documents related to those offers .

Request for inquiry by registrar

   (3)  A person who has made a written offer to purchase real estate or a registrant acting on behalf of such a person may request that the registrar make an inquiry to determine the number of written offers that the brokerage acting for a seller has received to purchase the real estate.

Inquiry

   (4)  On receiving a request under subsection (3), the registrar may make an inquiry of the brokerage and the brokerage shall,

  (a)  respond within a reasonable period of time, or within the time that is prescribed; and

 

  (b)  at the request of the registrar, provide the registrar with copies of the written offers or other documents that it is required to retain under subsection (2). 

Disclosure by registrar

   (5)  The registrar shall determine the number of written offers that the brokerage has received to purchase the real estate and shall disclose the number of the offers as soon as practicable, or within the period of time that is prescribed, to the person who requested the inquiry under subsection (3), but shall not disclose the substance of any of the offers or the identity of the person making any of the offers.

Other action by registrar

   (6)  Nothing in this section limits the authority of the registrar to take any other action against a registrant that this Act authorizes the registrar to take.

   2.  Subsection 36 (1) of the Act is repealed and the following substituted:

Commission and remuneration

   (1)  All commission or other remuneration payable to a brokerage in respect of a trade in real estate shall be an agreed amount or percentage of the sale price or rental price, as the case may be, or a combination of both.

If no agreement

   (1.1)  If there is no agreement as to the amount of the commission or other remuneration, the rate of it or other basis for determining it shall be that generally prevailing in the community where the real estate is located.

Commencement

   3.  (1)  Subject to subjection (2), this Schedule comes into force on the day the Stronger Protection for Ontario Consumers Act, 2013 receives Royal Assent.

Same

   (2)  Section 1 comes into force on a day to be named by proclamation of the Lieutenant Governor.

 

REAL ESTATE AND BUSINESS BROKERS ACT, 2002

Schedule 3 to the Bill amends the Real Estate and Business Brokers Act, 2002. A registered brokerage acting for a seller is required to retain, for the period of time prescribed by the regulations made under the Act, copies of all written offers that it receives to purchase real estate or copies of all other prescribed documents related to those offers . A person who has made a written offer to purchase real estate or a registrant under the Act acting on behalf of such a person may request that the registrar appointed under the Act make an inquiry to determine the number of written offers that a brokerage acting for a seller has received to purchase the real estate. The registrar is required to disclose that number to the person who requested the inquiry.

 

As well, at present, the parties can agree that all commission or other remuneration payable to a brokerage in respect of a trade in real estate must be a certain amount or percentage of the sale price or rental price, as the case may be, but not a combination of both. The Schedule amends the Act so that the commission or other remuneration can be a combination of both an amount and a percentage. "

 

 

 

 

Brian Madigan LL.B., Broker

www.iSourceRealEstate.com


Tagged with: rebba 2002 commissions multiple offers bidding wars ontario law
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Brian Madigan LL.B. Broker

RE/MAX West Realty Inc. Brokerage

Independently owned and operated

96 Rexdale Blvd. , Toronto Ontario,

Phone: 416-745-2300

BRMadigan@Rogers.com

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