For the RECOrd: Q4 2024

RECO holiday schedule

Warmest wishes to all!

Please see below for RECO's holiday schedule.

• December 23: open 8:30 a.m.-4:30 p.m.
• December 24: open 8:30 a.m.-12 p.m.
• December 25/26: closed
• December 27/30: open 8:30 a.m.-4:30 p.m.
• December 31: open 8:30 a.m.-12 p.m.
• January 1: closed
• January 2/3: open 8:30 a.m.-4:30 p.m.

Interested in becoming a RECO board director in 2025?

At the RECO Annual General Meeting (AGM) in 2024, RECO amended its by-laws to reduce its board from 12 to nine members in accordance with Minister’s Orders. At the same time and under the same orders, the by-laws were also amended to reduce the number of sector directors — that is, individuals from the real estate services sector, including registrants — to no more than three members of the board.

The terms for each of the three sector directors currently on RECO’s board expire at the 2025 AGM on May 29, 2025.

RECO will need to elect three new sector directors at this AGM.

Changes to the election process

RECO’s previous election process for sector directors (previously known as industry directors) involved a region-based vote to establish the final three nominees, who were then voted in at the AGM by the members.  Starting at the 2025 AGM, a new policy on director recruitment applies, which establishes the election process for directors as follows: 

• Three vacant sector director positions will be filled by an election at the 2025 AGM.
• Interested registrants will be invited to submit an application for consideration between January 13 and February 3, 2025. Eligibility to stand for election will be based on established criteria which will be shared with applicants.   
• This review and eligibility process will be facilitated by an external third-party firm experienced in board recruitment.  
• Applicants will undergo a vetting and selection process which will result in the development of a short-list of the highest rated candidates for approval by the board of directors.
• RECO members will have the opportunity to vote to fill the three vacant positions from the short-list of candidates presented at the RECO AGM on May 29, 2025.
• All those who wish to vote in the sector director election must be in attendance at RECO’s AGM to be able to vote. This is the only opportunity to vote for candidates — which is a change in process from prior years when two separate votes were undertaken (one prior to the AGM, and one at the AGM).

To provide more information to potential candidates and to answer questions, RECO will host a webinar for registrants at 10 a.m. on Tuesday, January 7, 2025.

More details, including a link to register for the webinar and submit questions in advance, will be circulated soon.

New independent provider to administer exams to real estate learners in Ontario

As part of our preparations to expand real estate education providers in the coming year, RECO announced in November that we have engaged a leading independent exam provider, Meazure Learning, to administer exams for Ontario real estate learners, beginning in mid-2025. This ensures that all learners, regardless of the school they choose, will undergo the same rigorous, standardized exam process.

Meazure Learning’s industry-leading exam infrastructure — spanning over 1,500 test centres globally and advanced remote proctoring — provides secure, reliable exam delivery, whether learners test remotely or at a testing centre.

We look forward to sharing details of the successful real estate education providers in early 2025.

Brokers of record: New mandatory annual reporting for unclaimed trust money coming in 2025

Currently, as part of a brokerage’s biennial registration renewal, the broker of record is required to declare if the brokerage is in possession of any unclaimed trust money:

• that has been in its possession for more than two years, and
• for which entitlement has not been determined or is unclear, or the entitled person(s) cannot be located.

Beginning in January 2025, brokers of record will be required to declare the unclaimed trust money annually, both on the brokerage renewal application, and in the non-renewal year through a new and separate online reporting tool. As an example, for greater clarity, if a brokerage made a declaration on its brokerage renewal application in January 2024, it would make another using the online tool in January 2025.

When the non-renewal declaration is required, brokers of record will receive an email with instructions, and complete the declaration electronically via a simple form accessible right from the email.

Brokers of record are encouraged to complete the declaration as soon as they receive the email to avoid any delays and additional reminders.

If you have any questions, please contact registration@reco.on.ca.

RECO implementing periodic Criminal Record and Judicial Matters Checks

Since 2010, individuals have been required to provide a Criminal Record and Judicial Matters Check (CRJMC) in support of their initial application for registration.

Beginning in 2025, registrants will be required to periodically obtain a CRJMC as a condition of registration renewal. Expanding the use of CRJMC to add periodic checks will assist in validating the information reported by applicants to maintain the integrity of the application process.

RECO will be phasing in the requirement over two years. In 2025 and 2026, RECO will prioritize salespersons and brokers applying to renew their registration who might not have submitted a CRJMC when they first applied to become registered. From 2027 onwards, any individual applying for renewal of registration might be required to provide a current CRJMC as part of the renewal process. RECO is working to make the process seamless and efficient to minimize delays.

RECO will also be moving to a convenient and cost-effective online platform for registrants to use to request and submit their CRJMC.

More information on the implementation of periodic CRJMCs at time of renewal will be provided in early 2025. 

Promoting and protecting the best interests of your clients

Agents and brokerages must promote and protect the interests of the clients they represent.

This means, above all else, that you must put your client’s interests ahead of everyone else’s, including your own, except when law explicitly requires otherwise. Every obligation owed to a client, whether it is providing advice, providing and explaining disclosures, or avoiding conflicts, is ultimately rooted in this duty, in respect of the services agreed to be provided.

Over the past year, each edition of For the RECOrd has explored a different aspect of this fundamental duty and highlighted related RECO discipline decisions. General non-compliance right through to serious contraventions of the Trust in Real Estate Services Act, 2002 (TRESA) can often be traced back to an agent or brokerage failing to act in the best interests of their client.

Your client is relying on you

Your client is relying on you to guide them through their real estate transaction. When it is personal real estate, it is about your client’s “home,” something more than just a property or real estate asset.

From providing and explaining the RECO Information Guide through to completion of the transaction, every action you take should actively promote and protect your client’s best interests. Your role is to advocate for them, to ensure they fully understand the information provided to them and what is happening at each step of the transaction, to explain the options available to them, and to help them grasp the potential outcomes of the decisions they make.

Think about what you would need if you were in your client’s position. What would you expect from a professional representing you? What questions would you ask? What information would you want clarified? How might real estate terms or processes seem confusing to someone without your expertise?

A dedicated and loyal agent can significantly benefit a client during a real estate transaction. This consistent commitment is crucial for building trust, promoting positive outcomes, and enhancing both your reputation and that of the real estate industry. This truly is the core value a real estate agent brings to a client. 

In the news: Helping agents navigate the homebuilding industry

In October, Real Estate Magazine featured an article by one of RECO’s fellow regulators, the Home Construction Regulatory Authority (HCRA), entitled “Protecting new homebuyers: What every Ontario agent should know.”

For agents and brokerages who may be involved in transactions that relate to new builds, this article offers important insights including:

• the importance of ensuring that homebuilders are licensed, and
• the risks of disciplinary action if a real estate agent were to knowingly or unwittingly facilitate an illegal sale.

The full article can be found here: https://realestatemagazine.ca/protecting-new-homebuyers-what-every-ontario-agent-should-know/

In case you missed it: Working with a landlord or tenant client in a rental transaction

Rights and responsibilities of real estate agents are governed by the Trust in Real Estate Services Act, 2002 (TRESA) and agents must comply with the law when dealing with rental transactions.

When representing a client, an agent must promote and protect the interests of their client and to do that, one must understand the nuances of the type of transaction and property, which requires due diligence, including compliance with the laws and bylaws that apply beyond TRESA. Let’s start with TRESA.

The following are key aspects of TRESA that relate to rental transactions. 

Clarity in representation

• Individual representation of either a tenant or a landlord in a rental transaction makes it very clear whose interests the agent is to be promoting and protecting. Remember that an agent or brokerage is prohibited from representing two clients in a transaction, unless the required disclosures have been made and the clients or prospective clients make an informed decision whether to proceed.
• If a real estate agent and their brokerage would like to represent both a tenant and a landlord, this is multiple representation. As such, the brokerage must make the necessary disclosures to the clients or prospective clients and obtain consent before proceeding, just like if the clients were involved in a purchase or sale of a property. A written disclosure must explain:
  • How the brokerage’s duties or the designated representative’s duties to their clients will change,
  • the differences in the services clients will receive, and
  • any change to how much clients will pay the brokerage the brokerage.
• An agent and brokerage engaging in multiple representation must inform all clients and prospective clients that the agent proposes to represent more than one party, and how their duties to each party would differ if they represented one client or more than one client in the transaction. It’s important to understand that in the case of multiple representation none of the clients are fully represented. The clients no longer receive the full benefit of the client relationship because of restrictions on the services that can be provided, the information that can be shared, and the advice that can be given, in a multiple representation situation.

Disclosure of services, fees and renumeration

• A proper written representation agreement must be in place when an agent and brokerage are representing either a tenant or a landlord. The agreement must outline the duties to their client and the services being provided so that all parties are aware and can avoid any disputes.
• Fees and remuneration for real estate agents related to rental properties may vary, and the full details of the compensation and distribution must be outlined in any representation agreement.

Other relevant laws

While TRESA governs the conduct of registrants representing clients and dealing with those engaged in real estate transactions, there are additional legislative requirements that govern rental transactions.

It is important for registrants who represent a client in a rental transaction to familiarize themselves with these obligations to advise a client on their rights and obligations, to avoid advising a client to breach other legislation.  

Residential Tenancies Act - Tenant and landlord rights and responsibilities

• The relationship between tenants and landlords, and their rights and obligations are governed by the Residential Tenancies Act, 2006 (RTA) and enforced by the Landlord and Tenant Board (LTB).
• While real estate agents are not expected to have a deep knowledge of the RTA, agents should be aware of key requirements under the RTA, particularly those related to common concerns such as deposits, rental agreements and landlord access, which tend to be the majority of complaints we receive about agents trading in rental properties. 

Human Rights Code - Human rights protection

• Landlords and their agents must adhere to the Ontario Human Rights Code (HRC) and cannot select or refuse tenants based on protected grounds.
• When representing a tenant or a landlord in a rental transaction, agents should be aware of questions they are and are not permitted to ask or answer under the HRC. When representing a client, an agent is not permitted to say or do something that their client is not permitted to do.

Condominium Act, 1998 - Condominiums

• In many instances, real estate agents trade in rental properties that are condominiums, and it is important that agents and brokerages be aware of, and adhere to, the unique rules of condominium living on behalf of their clients, including the condominium corporation’s own rules. ​​​​
• In addition to the laws that regulate condominiums, agents should be aware of the two main regulatory authorities in Ontario that govern condominiums: the Condominium Management Regulatory Authority of Ontario (CMRAO), and the Condominium Authority of Ontario (CAO). CMRAO regulates the management companies that manage condominiums, and the CAO provides information, education and dispute resolution to condo communities.