The Role of the Organizations in the Fair Rules Business
Assuming that we are to come up with a series of “fair rules” for multiple offers and multiple representation, which organizations should be involved?
We have a few to choose from:
RECO is the Real Estate Council of Ontario. This is the regulating body which oversees the Real Estate and Business Brokers Act, 2002, the registrants and protects consumers. It is a self-governing profession, so most of the members of the Board are real estate practitioners themselves.
OREA is the Ontario Real Estate Association. It is a provincial association of real estate practitioners in Ontario who choose to be part of organized real estate. At the federal level we have CREA, or the Canadian Real Estate Association. CREA owns and controls the MLS system.
TREB is the Toronto Real Estate Board. It is the local rung on the TREB/OREA/CREA ladder. It actually operates the local MLS system. By joining TREB, a registrant becomes a member automatically of OREA and CREA as well.
Certainly, 70% to 80% of all RECO registrants are members of “organized real estate”.
This is the Ministry of Government and Consumer Services. It administers both the Real Estate and Business Brokers Act, 2002, as well as most Acts involving real estate transactions, including the Registry Act and the Land Titles Act and others.
All of the above qualify as “interested parties”. If we aim at the MLS system, we could for example have local rules which simply apply to TREB. Now, that’s actually where most of the problems arise, so that could be enough. Hopefully, some other boards would adopt similar rules if they too were at risk. There are about 52,000 members of TREB at the present time. Transgressions could be handled directly by TREB as part of its discipline process.
The problem here is that this singles out Toronto when the same fundamental issue is really province wide. Through OREA, we could seek some changes at their level, but this would still leave out as many as 30% of the registrants.
We could have the matters in issue transferred to RECO for handling. They have a province-wide mandate, so that should work.
RECO can only do what it is authorized to do. It’s stuck with the legislation which exists now.
Following the CBC Marketplace expose, all the interested parties agreed that revisions and updating were required to bring REBBA up to date.
In British Columbia, faced with similar issues, the Provincial Government decided to abolish multiple representation (dual agency) and while they were at it, the Real Estate Council of British Columbia (RECBC), the RECO equivalent. They concluded that RECBC was not doing a proper job. It was a waste of money. As the Regulator of a self-governing profession, it was a dismal failure. So, the Province took its functions “in-house”.
Submissions were made by RECO, OREA and TREB to the Ministry about changes to the Act. While it’s still in progress, RECO suggested “designated agency” and OREA with the support of TREB agreed with “designated agency with some exceptions”. The exception being sought was confirmation that both the Seller and the Buyer wished to be represented by the same person, whatever their reasons might be. Hence, one more FORM! This approach was accepted by the Ministry as the correct solution.
Just remember in BC, they made it illegal to represent BOTH parties in a transaction, and the abolished the Regulator. In Ontario, with all the same issues and substantially more transactions, one more Form is the solution. Hard to believe, but that’s the current state of affairs.
SEEMS like a LOT of POLITICS here!!!
The Internal Battleground
As a backdrop to the reformation process, you need to be aware of the internal conflict between RECO and OREA. Until recently, they got along well. OREA was the designated education provider for all pre-registration courses in Ontario. This mandate was pulled from OREA by RECO and awarded to two other parties. How significant was this in the grand scheme of things? OREA made $32 million annually from this contract. The rest of OREA’s budget is only $7 million. Now, OREA proudly proclaims that it will have the time to focus its efforts on its true mandate, namely its members. AND, it has taken on a NEW JOB! It will now oversee RECO’s role on behalf of its membership.
Hence, there was no agreed upon submission to the Ministry. OREA got its way. Designated agency would be an improvement, but signing a Form to get around it, is just the status quo.
If we go with TREB, we are dealing with 52,000 registrants. If we go with OREA we have substantially more. It will cover all of the registrants dealing with the MLS system. The registrants not members of organized real estate are usually property managers, appraisers, leasing agents etc. If we deal with RECO, then we have everybody, now in excess of 80,000 registrants.
I think that the natural choice would be to have changes to the Real Estate and Business Brokers Act, 2002 and the Regulations. That’s where we would deal with the new rules. RECO would enforce the new rules under its present disciplinary system.
Brian Madigan LL.B., Broker