OREA urges province to revamp realtor rules
By AdvocateDaily.com Staff
The Ontario Real Estate Association (OREA) has released a number of recommendations to revamp how real estate is sold, including allowing an open bidding process, Toronto real estate lawyer Matthias Duensing writes in The Lawyer’s Daily.
Included in the 28 recommendations to modernize the Real Estate and Business Brokers Act (REBBA) is one suggesting a more transparent, multi-offer process so realtors can disclose competing offers, says Duensing, principal of Duensing Law.
“The intent of REBBA is to govern ‘real estate brokerages, brokers and salespersons, setting the rules for how they conduct business and interact with consumers,’” Duensing writes.
He says the government focused its call for reform around four themes:
- consumer protection
- enhanced professionalism
- modern regulation
- strong business environment
“The government opened its call for comments and consultations on REBBA on Jan. 31, 2019, receiving an estimated 6,500 submissions from interested parties by the March 15 deadline,” Duensing notes in the online article.
“The last substantial reforms to REBBA were proposed in 2002, and finally came into force on March 31, 2006," he says. "Those reforms included how to handle unclaimed trust funds if a transaction does not close, how to handle interest on trust monies, prohibitions against false advertising and falsifying information, opening up ownership of a brokerage to non-brokers (provided there is a broker of record).”
OREA's recently released recommendations include “calls for a more transparent, modernized real estate system, with consumer choice and professionalism at the forefront,” writes Duensing.
He says the association, which represents about 78,000 realtors across the province, also warns against a mandatory “open offer” selling system.
“Under the most commonly used current process, buyers submit bids to the seller and are not able to access the bid submissions of other interested buyers,” explains Duensing. “Buyers in markets such as Toronto were subjected to a very stressful process, often bidding well above the asking price, in the hopes of submitting the winning bid on the property.
“Though rare, sellers could open up the offers received to other buyers, provided that all parties agree to the open ‘auction’ process.”
He says OREA wants the government to allow more details of the bids, such as closing dates and other conditions of competing offers, although it has “cautioned against” requiring an open process for all transactions.
“The choice on how to manage the sale should still be in the hands of the individual sellers and buyers,” sums up Duensing.
He says the association has also asked the government to prohibit “bully offers” — those made in advance of a stated offer period — and escalation clauses, where a seller can offer to beat the highest bid by a fixed amount.
“These tactics are alternatively considered unfair and complicated, or competitive and useful,” writes Duensing.
“We eagerly await the next round of government consultations on REBBA,” he says.