New Real Estate And Business Brokers Act Comes Into Effect Today

Archived Release

New Real Estate And Business Brokers Act Comes Into Effect Today

Ministry of Consumer Services

Legislation Improves Safeguards For Real Estate Buyers And Sellers QUEEN'S PARK, ON, March 31 - People buying and selling real estate in Ontario will be better protected under the new Real Estate and Business Brokers Act, said Minister of Government Services Gerry Phillips. "We know that buying and selling a home are two of the most important decisions Ontarians will make in their lifetime," Phillips said. "This new legislation will help protect consumers and play a role in maintaining a safe and vigorous marketplace for both residential and commercial real estate." The new act better protects consumers by: - Empowering the registrar, in appropriate circumstances, to suspend the registration of real estate agents with immediate effect, instead of having to wait until the conclusion of a hearing in respect of a proposed suspension - Clarifying disclosure rules regarding the deposit of trust monies - interest on deposits remains with the deposit unless otherwise agreed to in the contract - Increasing maximum fines for violations of the act - from $25,000 to $50,000 for individuals and from $100,000 to $250,000 for corporations - Adopting a tougher policy responding to problems such as mortgage fraud schemes - it is now a specific offence for registrants to falsify information or documents in relation to a trade in real estate or to counsel others to do so - Providing stronger accountability under the law regarding the management of real estate brokerages - under the new act, all real estate brokerages must have a broker of record who participates in the management of a brokerage and who is required to ensure that a brokerage complies with the act. The government made new regulations for the act in November 2005 after consultations with the industry. "The new act will benefit both the consumer and the real estate practitioner, as it includes consumer protection initiatives, higher ethical standards and standards of conduct, which, in turn, will strengthen confidence in the buying and selling process for all types of real estate in Ontario," said Real Estate Council of Ontario Chair Bruce Law. "The government is dedicated to protecting Ontarians in our ever-changing and increasingly demanding marketplace while also helping to create the conditions for a prosperous economy," Phillips said. Consumers who want information or advice on how to protect themselves in the marketplace can call the ministry's Consumer Services Bureau at 416-326-8800 or 1-800-889-9768 or visit the ministry's website at www.mgs.gov.on.ca. Disponible en français www.mgs.gov.on.ca Backgrounder ------------------------------------------------------------------------- THE REAL ESTATE AND BUSINESS BROKERS ACT Ontario's Real Estate and Business Brokers Act, 2002 (REBBA, 2002), updates consumer protection in the real estate sales sector and replaces the previous Real Estate and Business Brokers Act. The updated act significantly modernizes the regulatory regime for real estate brokers and salespersons to the benefit of both consumers and the marketplace. The government developed the act in consultation with stakeholders. The act was passed with unanimous consent by the legislature. In 2004, the government released draft regulations for public comment. Regulations were finalized and published in November 2005. The act comes into force today following five months provided to real estate registrants to review the act and prepare for the new provisions. The act is administered on behalf of the Ministry of Government Services by the Real Estate Council of Ontario (RECO). RECO is a self-managed, not-for-profit corporation. RECO's mandate is twofold: - To administer the regulatory requirements of the real estate sales industry as set down by the Government of Ontario - To protect consumers and members through a fair, safe and informed marketplace. As well, RECO administers the regulations under the act, which includes the Code of Ethics. REBBA, 2002 and the associated regulations, including the Code of Ethics, allow RECO to effectively regulate trade in real estate in the public interest. Ontario has more than 44,000 real estate registrants. More information on RECO is available at www.reco.on.ca. Disponible en français www.mgs.gov.on.caFor further information: Paul de Zara, Minister's Office, (416) 327-3072; Jason Wesley, Ministry of Government Services, (416) 327-2805; Sandra Gibney, Manager, Communications and Corporate Initiatives, Real Estate Council of Ontario, (416) 207-4842