Resource for Home Buyers - RECO

 Did you know that real estate in Ontario is a regulated profession?  That means all salespersons and brokers must be trained, registered and abide by regulations as well as a code of conduct. The body that oversees training and enforcement of the regulations is RECO.

 

According to their website, the Real Estate Council of Ontario (RECO) “enforces the rules that real estate salespeople, brokers and brokerages must follow. [They] protect the public interest through a fair, safe and informed marketplace.” The Real Estate and Business Brokers Act, 2002 (REEBA 2002) outlines the rules and the code of conduct.

 

The vast majority of real estate professionals are working in accordance with the rules. There are approximately 79,000 salespersons and brokers in Ontario and only a relative few of them have had complaints lodged with RECO.

 

When a complaint is made about a registered broker or salesperson, RECO manages an escalating complaints process depending on the nature of the complaint. In some cases, RECO mediates between the parties towards Dispute Resolution (RDR). In other cases some form of disciplinary action may be taken  - anything from a Registrar’s discipline decision to a Discipline Committee decision to a Provincial Offences Court decision in the most serious cases.

 

Here is a good illustration of the process. The full pdf can be found here.

 

 

I took a look at the recent disciplinary action decisions and here is what I found:

 

One quarter (25%) of decisions were about salespersons knowingly falsifying or omitting information. A further quarter (25%)of decisions were about salespersons releasing lockbox information to buyer clients or leaving buyer clients/home inspectors alone in a seller’s home. Just over one fifth (21%) of decisions involved errors in due diligence/disclosure issues such as failing to independently confirm taxes/lot measurements or failing to disclose known title issues. 13% were serious decisions involving the misuse of trust funds. These involved hefty fines in addition to the broker having their registration revoked entirely. 8% of decisions involved unlicensed “assistants” working on behalf of salespersons and 8% of decisions involved salespersons reneging on promises to rebate commission.

 

 

 

I also looked at the number of disputes that were settled without disciplinary actions.  Of these, one third (33%) were about salespeople either not cancelling a showing or turning up outside of their appointed time and one quarter (25%) involved misunderstandings about deposits/rebates.

 

Once again, this information is based on a small number of total complaints given the number of registered salespersons. Because of the small base of complaints, this can’t be considered statistically significant in any way.

 

Recent enforcement decisions are listed on the RECO website here, and they maintain a searchable database of salespeople to make sure they are registered and in good standing. Any disciplinary actions taken against the sales person in the past five years will show up on the database. You can find it here. 

 

Before you start to work with a new-to-you real estate salesperson, be sure you do your homework. Check the RECO website to ensure they are in good standing, and ask to speak to a couple of their former clients. Don’t sign either a Listing Agreement or a Buyer Representation Agreement until you’re comfortable working with the salesperson and be certain that all verbal agreements are documented.