Introduction
Get ready for the significant TRESA changes in Ontario that will take effect on December 1, 2023. This article will guide you through these important updates, impacting both consumers and real estate professionals.
New Rules for Buyer Representation Agreements
Designated Representation Agreements (DRAs)
Starting December 1, real estate brokers must use Designated Representation Agreements (DRAs) with their clients. Unlike traditional agreements, DRAs are more formal. They clarify the services you’ll receive and the fees you’ll pay.
Examples to Understand DRAs
- Exclusive vs. Non-Exclusive: A DRA will state if the broker represents you exclusively or not. Exclusive means the broker can’t work with other buyers on the same property. On the other hand, non-exclusive allows the broker to work with other buyers but still puts your interests first.
- Fee Structure: The DRA will outline your fees, whether it’s a commission based on the purchase price or a flat fee.
New Rules for Dual Agency
No More Dual Agency
TRESA will mostly ban dual agency, where one broker represents both the buyer and the seller.
Examples to Understand Dual Agency
- Fair Price: A dual agent can’t negotiate a fair price easily because they represent both parties.
- Information Disclosure: The dual agent might hesitate to disclose all relevant information, putting the deal at risk.
New Rules for Disclosure of Conflicts of Interest
You Must Know the Conflicts
Brokers must now disclose any actual or potential conflicts of interest.
Examples to Understand Disclosure
- Financial Interest: If a broker has a financial interest in a property you’re interested in, they must tell you.
- Personal Relationships: If the broker knows the buyer personally, like a friend or family member, they must disclose it.
New Rules for Trust Accounts
Your Money is Safe
Brokers must now deposit all client funds into trust accounts.
Examples to Understand Trust Accounts
- Bankruptcy Protection: If a broker goes bankrupt, the trust account protects your funds.
What Does TRESA Mean for Consumers?
TRESA aims to protect consumers by eliminating conflicts of interest, ensuring financial security, and promoting transparency. So, if you’re planning to buy or sell property in Ontario, you should familiarize yourself with these changes.
What Does TRESA Mean for Real Estate Professionals?
Real estate professionals will need to adjust their business practices. However, these changes aim to strengthen the industry and protect consumers. RECO offers various resources, including online courses and training materials, to help brokers comply.
Conclusion
TRESA brings significant changes to Ontario’s real estate laws. Both consumers and real estate professionals should take the time to understand these new rules before they take effect on December 1, 2023.
Additional Resources
- RECO Website: RECO, the regulatory body for real estate professionals in Ontario, offers many resources to help you understand and comply with the new TRESA regulations.
I hope these examples clarify the upcoming changes to TRESA. If you have more questions, feel free to contact me. Your understanding and compliance with these new rules are crucial for a smooth transition into the new era of real estate in Ontario.