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1 Media Kit Media inquiries:
2 Abut RECO Facts and Stats RECO is a nt-fr-prfit cnsumer prtectin rganizatin. RECO was established in 1997 by the Ontari gvernment as a Delegated Administrative Authrity (DAA) and reprts t the Ministry f Gvernment and Cnsumer Services (MGCS). RECO administers the Real Estate and Business Brkers Act, 2002 (REBBA). REBBA cntains the rules, regulatins and a Cde f Ethics that real estate salespersns, brkers and brkers f recrd must fllw. On behalf f the prvincial gvernment, RECO regulates mre than 80,000 Ontari real estate prfessinals and educates Ontari cnsumers abut buying and selling a hme. RECO is gverned by a 12-persn bard: Nine elected representatives frm the real estate industry; and, Three representatives appinted by the prvincial gvernment. RECO is led by a Chief Executive Officer (CEO), wh manages the day-t-day peratins f the crpratin, and by a Registrar, wh carries ut the pwers and duties as set ut in REBBA. RECO prvides advice and recmmendatins t gvernment n hw best t enhance cnsumer prtectin. RECO currently has mre than 130 emplyees. RECO receives funding frm new registratin dues, registratin renewals, fees frm educatin services agreements, fees charged fr the administratin f the insurance prgram, and revenues frm disciplinary penalties and recveries. In 2016, RECO: Opened 2,529 cmplaints; clsed 2,218 Cnducted 1,015 inspectins Opened 178 investigatins; clsed 162 Laid 79 charges under the Prvincial Offences Act Prsecuted 31 cases Achieved 29 cnvictins that resulted in: $92,800 in ttal fines (t the curt) $57,750 in restitutin t cnsumers Issued 28 prpsals t refuse r revke the registratin f real estate prfessinals
3 Understanding the difference between... The Ministry f Gvernment and Cnsumer Services (MGCS) Real Estate Cuncil f Ontari (RECO) Ontari Real Estate Assciatin (OREA) MGCS is a ministry in the Ontari gvernment that delivers vital prgrams, services and prducts ranging frm health cards, drivers licences and birth certificates t cnsumer prtectin and public safety all t help create a better quality f life fr Ontari s families. Relatinship between MGCS and RECO: MGCS is respnsible fr any amendments t the Real Estate and Business Brkers Act, 2002 (REBBA) and its assciated regulatins, as well as general versight f RECO On behalf f MGCS, RECO enfrces REBBA, and is respnsible fr day-t-day delivery f services The Minister f Gvernment and Cnsumer Services reprts t the Legislative Assembly n the fulfilment f the Statutry Mandate by RECO, and the affairs f RECO RECO s Bard f Directrs is accuntable t the Minister fr the perfrmance f RECO Prduced by the Real Estate Cuncil f RECO is the regulatr fr real estate prfessinals in Ontari. Registratin is mandatry t legally trade in real estate in Ontari. RECO s mandate is cnsumer prtectin n behalf f the Ontari gvernment. As a Delegated Administrative Authrity, RECO enfrces the law in the public interest. RECO s missin is excellence in the delivery f regulatry services that prtects the public interest and enhances cnsumer cnfidence in the real estate prfessin. RECO s rle is t: Help cnsumers make infrmed decisins when buying r selling a hme and understand that there are benefits t wrking with a regulated prfessinal; Administer and enfrce REBBA and a Cde f Ethics. Prvide advice t gvernment regarding cnsumer prtectin legislatin; Help registrants understand and fllw REBBA. Investigate cmplaints abut registrants wh may have vilated REBBA; Be accuntable t the public thrugh the Ontari gvernment; Set the standards fr pre-registratin, articling and brker educatin; Develp and deliver mandatry cntinuing educatin curses; and, Administer a mandatry insurance prgram that includes cnsumer depsit prtectin, errrs and missins cverage and cmmissin prtectin. OREA is a prfessinal assciatin. Membership is vluntary. OREA s mandate is t wrk n behalf f real estate prfessinals. OREA s missin is t help Ontari REALTORS, brkerages and assciatins succeed. OREA s rle is t: Encurage cnsumers t use a REALTOR when they buy r sell a hme; Wrk t create a legislative and regulatry envirnment at Queen s Park that is favurable t REALTORS and real estate; Prvide infrmatin, tls and services, like standard frms, t help REALTORS with their businesses; Be accuntable t its REALTOR members; Deliver pre-registratin, articling and brker educatin curses, as apprved by RECO (beginning mid-2019, a new prvider Humber Cllege and NIIT Canada will deliver preregistratin educatin. OREA s prgram will cntinue until the end f 2020); Prvide vluntary curses fr individual prfessinal develpment; and, Develp frms and clauses fr residential and cmmercial transactins. Fr example, Agreement f Purchase and Sale, Listing Agreement and Buyer Representatin Agreement.
4 Frequently Asked Questins What is RECO? RECO is a cnsumer prtectin rganizatin that regulates real estate salespersns, brkers and brkerages n behalf f the Ontari gvernment. As a Designated Administrative Authrity (DAA), it administers the Real Estate and Business Brkers Act, 2002 (REBBA). What is RECO s rle? RECO prtects the public interest thrugh a fair, safe and infrmed marketplace. It des this by: Enfrcing the standards t btain and maintain registratin fr brkerages, brkers and salespersns; Establishing educatin requirements t becme a salespersn r brker, r t maintain registratin thrugh cntinuing educatin; Cnducting rutine inspectins f brkerage ffices t ensure they cmply with REBBA; Addressing inquiries, cncerns and cmplaints abut the cnduct f real estate salespersns, brkers and brkerages; Establishing and administering an insurance prgram that includes cnsumer depsit prtectin; and, Prviding helpful buying and selling infrmatin thrugh cnsumer educatin. What des RECO nt d? RECO des NOT: Have authrity ver buyers and sellers, r ver the valuatins f prperties; Manage the Multiple Listing Service, als knwn as MLS (this is wned and managed by CREA); Cllect, maintain r distribute sales figures r market data (Sales figures are maintained by CREA); Have the authrity t reslve mnetary r cntractual disputes, r t assess r award damages;
5 Regulate builders (builder regulatin is the respnsibility f Tarin Warranty Crpratin); and, Regulate the sale f new hmes (Tarin regulates hme builders t prtect the rights f new hme buyers). What is a DAA? Delegated Administrative Authrities are respnsible fr ensuring that a number f Ontari s cnsumer prtectin and public safety laws are applied and enfrced. The Ministry f Gvernment and Cnsumer Services currently versees 10 administrative authrities: Bereavement Authrity f Ontari (BAO) Ontari Film Authrity (OFA) Electrical Safety Authrity (ESA) Ontari One Call (ON1Call) Ontari Mtr Vehicle Industry Cuncil (OMVIC) Real Estate Cuncil f Ontari (RECO) Tarin Warranty Crpratin Technical Standards and Safety Authrity (TSSA) Travel Industry Cuncil f Ontari (TICO) Vintners Quality Alliance Ontari (VQA) What is REBBA? The Real Estate and Business Brkers Act, 2002 is the legislatin that real estate salespersns, brkers and brkerages must fllw in Ontari. The law includes rules, regulatins and a Cde f Cnduct that real estate prfessinals must fllw when helping cnsumers buy r sell a hme. What is the gvernment review f REBBA all abut? The Ministry f Gvernment and Cnsumer Services has annunced it will be reviewing REBBA and its regulatins, in tw phases. The gal f the review is t mdernize the rules t strengthen cnsumer prtectin and standards fr real estate prfessinals. In the first phase f the review, the ministry is cnsidering measures t address cncerns raised abut the practice f multiple representatin and ther matters. Phase 2 will start in the spring f 2018 and will be a brader review f the legislatin. Page 2 f 4
6 The ptential measures being cnsidered in the first phase f the review f REBBA are intended t: Increase cnsumer cnfidence by minimizing the cnflict f interest invlved in multiple representatin situatins; Make it easier fr cnsumers t better understand the nature f the agreements they are entering; and, Strengthen cnsumer prtectin by mdernizing the penalties fr unethical behavir fr cntraventins f the Cde f Ethics. Hw des rganized real estate wrk? While RECO regulates real estate prfessinals, a number f rganizatins advcate n behalf f real estate prfessinals and the industry t cnsumers and gvernment. These include: The Canadian Real Estate Assciatin (CREA), the natinal trade assciatin fr real estate agents. Its membership includes mre than 100,000 real estate brkers, agents and salespeple, wrking thrugh 100 real estate Bards and Assciatins acrss Canada. The Ontari Real Estate Assciatin (OREA), the prvincial trade assciatin fr real estate agents. Its membership includes abut 70,000 real estate brkers and salespeple members f Ontari's 39 real estate bards. Lcal real estate bards, such as the Trnt Real Estate Bard (TREB), that represent agents lcally. There are 39 real estate bards in Ontari; TREB is the largest bard, serving mre than 48,000 real estate brkers and salespersns. Hw des a brkerage wrk? A brkerage is a cmpany that emplys peple t help cnsumers buy r sell real estate. Its peratins are verseen by a Brker f Recrd wh is respnsible fr all emplyees salespeple, brkers and supprt staff wh wrk there. What shuld yu d if yu have an issue with yur real estate agent? When yu have an issue with yur agent, yu shuld first speak with them, making it clear which expectatins they aren t meeting. If yu can t reslve the prblem with the representative, speak with their Brker f Recrd. If the Brker f Recrd Page 3 f 4
7 is unable r unwilling t reslve the matter, r yu have serius cncerns related t a representative s cnduct, yu can file a cmplaint t RECO. What is multiple representatin? Multiple representatin, als called duble-ending r dual agency, is when a real estate brkerage represents bth the buyer and the seller in a real estate transactin. This culd happen with each party having a different representative f the same brkerage, r each party having the same representative in a trade. In Ontari, multiple representatin is currently allwed if bth parties (buyer and seller) prvide written and infrmed cnsent t the brkerage. If ne party des nt give written cnsent, the brkerage must release ne f their clients. In January 2017, RECO submitted recmmendatins t gvernment n hw t enhance the rules in REBBA arund multiple representatin s that cnsumer prtectin is strengthened. We recmmended that the Ontari gvernment revise the rules t: Prevent r prhibit cnflict f interest situatins; Eliminate r drastically reduce the financial benefits f acting unethically; Ensure cnsumers are prvided with clear, cnsistent infrmatin regarding the nature f their relatinship with their representative, and the services they ll prvide; and, Prvide RECO with apprpriate tls and penalties t respnd t cnsumer harm. In June 2017, the gvernment launched a cnsultatin n prpsed changes t the rules arund multiple representatin. RECO welcmed the gvernment s review and urged registrants and ther industry stakehlders t cntribute t the gvernment s cnsultatin. What is illegal trading? Illegal trading is the practice f trading in real estate withut registratin t d s. In Ontari, individuals wh are in the business f trading in real estate must be registered with RECO. If they are nt registered, they are perating illegally. Page 4 f 4
8 @RECOhelps Discipline Paths and Outcmes Real estate prfessinals (ften called agents ) in Ontari must fllw the Real Estate and Business Brkers Act, 2002 (REBBA 2002) including a Cde f Ethics. If they breach these rules, there are varius discipline paths and utcmes, depending n the severity f the ffence. RECO receives cmplaint/ miscnduct is alleged. 58% OF COMPLAINTS FALL INTO THESE TWO CATEGORIES N actin Cmplaint clsed/ n actin Des RECO have authrity t deal with the cmplaint? Is the cmplaint supprted by evidence? RECO reviews/ gathers evidence Misunderstanding between the parties RECO Dispute Reslutin (RDR) RECO helps the parties discuss the cmplaint and pssible slutins Mre serius ffences (Breaches f Cde f Ethics) Matter ges t Discipline Hearing RECO prsecutes Discipline Cmmittee makes decisin Examples f ptential penalties: - Ordered t take educatinal curses - Salespeple and brkers rdered t pay a fine f up t $50,000; brkerages rdered t pay a fine f up t $100,000 (Breaches f REBBA 2002 ther than Cde f Ethics) Matter ges t Prvincial Offences Curt RECO prsecutes Justice f the Peace r judge makes decisin Examples f ptential penalties: - Individuals: fines f up t $50,000 and/r prisn terms f up t 2 years less a day - Crpratins: fines f up t $250,000 33% OF COMPLAINTS FALL INTO THESE TWO CATEGORIES 9% OF COMPLAINTS FALL INTO THESE TWO CATEGORIES Minr ffences RECO Registrar makes decisin Examples f ptential penalties: - Given a warning - Ordered t take an educatinal curse - Required t make a crrectin, such as fix an advertisement Mst serius ffences (Breaches f REBBA 2002 r very serius registrant miscnduct) RECO's mst serius remedy: Registrar prpses t revke, refuse t renew, suspend, r attach cnditins t registratin f registrant If registrant desn t appeal, Registrar carries ut prpsal If registrant appeals, Licence Appeal Tribunal makes decisin If the Registrar prpses t suspend r revke a registratin, the Registrar may als issue an immediate suspensin rder if the Registrar cnsiders it in the public interest t d s
9 Examples f typical ffences frm minr t serius* RECO receives mre than 2,000 cmplaints annually. Every case is unique and there are many ptential utcmes. This chart is a snapsht f the kinds f infractins we see and pssible utcmes that may result. A registrant makes an errr that csts mney t fix (fr example, a registrant lses a key) // RECO Dispute Reslutin - The parties agree t settle their dispute when registrant agrees t cver csts f changing the lcks A registrant breaks an advertising rule (fr example, the advertisement desn t clearly state the name f the brkerage) // issued a warning A registrant repeatedly breaks an advertising rule // issued a warning, required t take educatinal curse and crrective actin, such as establishing and fllwing a plicy MORE SEVERITY LESS OF OFFENCE A registrant gives a client access t a hme that is fr sale, but desn t accmpany the client // breach f Cde f Ethics, $6,000 fine A registrant makes a prmise t give a client a rebate and des nt keep the prmise // breach f Cde f Ethics, $6,000 fine A registrant fails t disclse pertinent infrmatin t all buyers, giving unfair advantage t ne buyer (fr example, nt disclsing that ne f the buyer s representative is waiving cmmissin) // breach f Cde f Ethics, $10,000 fine A registrant signs a dcument as a witness when in fact they were nt a witness // breach f Cde f Ethics, $12,000 - $15,000 fine A registrant causes financial harm t a client by signing r ding smething n behalf the client (fr example, a registrant representing bth a seller and a buyer fails t tell their seller client abut a secnd, higher ffer frm anther buyer) // breach f Cde f Ethics, $25,000 fine A registrant makes an imprper declaratin n a registratin renewal applicatin (fr example, the registrant fails t disclse criminal histry) // guilty under REBBA 2002, fine n an individual f up t $50,000 and/r prisn term f up t 2 years less a day and/r prpsal t revke registratin A registrant fails t put a client s depsit int a trust accunt // guilty under REBBA 2002, fine n an individual f up t $50,000 and/r prisn term f up t 2 years less a day r fine n a crpratin f up t $250,000 A registrant takes mney frm a trust accunt withut authrizatin // issued a prpsal t suspend r revke registratin with r withut an immediate suspensin; must replace funds, faces criminal charges A registrant cmmits mrtgage fraud // issued a prpsal t suspend r revke registratin with r withut an immediate suspensin; faces criminal charges Repeat ffenders RECO recgnizes that sme infractins are hnest mistakes. Hwever, if the same infractin like breaking an advertising rule is made repeatedly, smething mre serius is happening. Hence, we take a prgressive discipline apprach. Fr example: 1st ffence Warning. Must crrect the prblem. 2nd ffence Warning + Curse. Must crrect the prblem. Must take the RECO Advertising Wrkshp curse ($225 + HST). 3rd ffence Discipline hearing. A ptential fine f up t $25,000 fr the brker f recrd and/r up t $25,000 fr a sales representative. *This is nt a legal dcument. It is intended fr cnsumer educatin. As such, it is nt binding and the infrmatin and examples are illustrative nly. There are many variatins f ffences, discipline paths and utcmes fr each breach f REBBA 2002 and the Cde f Ethics nt every pssibility is captured here. Phrases like minr ffence and serius ffence are used fr clarity and simplicity RECO treats all cmplaints and ffences seriusly.
10 Prtecting cnsumers thrugh educatin RECO is a cnsumer prtectin rganizatin. Educating real estate prfessinals is ne way that RECO prtects cnsumers and prmtes prfessinalism in the real estate industry. RECO is respnsible fr tw educatin prgrams: Registratin educatin: training aspiring registrants t enter the industry; Mandatry cntinuing educatin: upgrading the knwledge and skills f existing registrants t help them better serve cnsumers in an everchanging industry. 1. New Registratin Educatin prgram Befre becming registered as a salespersn, individuals must cmplete a registratin educatin prgram that teaches them abut the fundamentals f trading in real estate and the rules they must fllw. The industry has changed dramatically ver the years, s RECO is establishing a new prgram t educate aspiring real estate prfessinals. The new prgram will launch in mid-2019 and will aim t ensure that aspiring registrants are practice-ready when they enter the prfessin. While the new prgram will begin accepting students in mid-2019, the existing prgram (run by the Ontari Real Estate Assciatin) will cntinue thrugh 2020, allwing students enrlled in it t cmplete their curses. The new prgram includes: A new curriculum that will fllw the flw f a real estate transactin, prviding students with a practical understanding f every aspect f a real estate trade. In-persn simulatin sessins will allw students t practise elements f a transactin in a structured and interactive classrm envirnment; The use f innvative technlgies. In additin t elearning and physical classrms, students can als chse a virtual classrm as a new ptin fr curse delivery. Augmented reality (cmputer-based interactive learning) that imitates real-life activities f the salespersn is
11 anther example f a new technlgy that will be incrprated int curse cntent; and, A new Knwledge Management System (KMS) that will prvide students and all registered real estate prfessinals with an nline databank fr materials such as jb aids, checklists and guides. The new registratin educatin prgram is being designed, develped, administered and delivered by the cnsrtium f Humber Cllege and NIIT Canada. The cnsrtium was chsen fllwing a rigrus Request fr Prpsals prcess. Befre issuing an RFP prcess, RECO cnducted fur years f research and cnsultatin with the prfessin and ther stakehlders. 2. Mandatry Cntinuing Educatin (MCE) prgram In 2013, RECO intrduced a new nline Mandatry Cntinuing Educatin (MCE) prgram that is administered and delivered by RECO. The prgram was initially created s that registrants culd receive cnsistent infrmatin n all tpics cvered, with a fcus n matters that supprts RECO s mandate, centred n regulatry cmpliance, cnsumer prtectin and current industry issues. Existing real estate prfessinals must take cntinuing educatin curses as a requirement f their registratin renewal. The MCE prgram aims t ensure that registrants knwledge and skills are kept up-t-date as the industry evlves. In 2016, RECO intrduced tw new curses that reflect cmmn issues in the market: cnd transactins and advertising cmpliance. Fur mre electives are planned fr this year. The MCE prgram will nt be affected by changes t the new registratin educatin prgram. Hwever, RECO plans t review the MCE prgram in 2017, as it has been in place nw fr fur years. One majr benefit f the prgram is the nline educatin cmpnent as registrants are prvided with cnsistent and readily accessible educatin acrss Ontari, at a reasnable cst. Still, RECO has received feedback that the prgram can be enhanced. Fr example, sme registrants want an pprtunity t be taught in a classrm, s this will be lked at during the review. Page 2 f 2
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