Real estate agents in Ontario will face closer public scrutiny and tighter regulation in April when an act aimed at improving consumer protections finally becomes law more than three years after being passed by the Legislature.
Proclamation of REBBA 2002, a revision of the Real Estate and Business Brokers Act, is slated for March 31 after a lengthy consultation process on the regulations attached to the act.
"The actual legislation passed in December, 2002, and at the time we were quite excited about having something new in a short period of time," said Tom Wright, president of the Real Estate Council of Ontario, which administers the act on behalf of the government. "But it took a little longer."
Under the revised law, RECO will have the power to suspend a real estate agent's licence pending the outcome of a disciplinary or court hearing, and to stop brokerages making false advertising claims.
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The council would even be able to prescreen brokerages' future advertising if claims (to being No. 1, for example) can't be substantiated.
The council will publish licence suspensions and revocations, charges and convictions against agents, as well as the status of their insurance, on its website, Mr. Wright said in an interview. It will add these details to its lists of registered agents' names, addresses and brokerage affiliation.
"It provides more transparency to the public," Mr. Wright said. "It takes away some of the mystery. It's not that there are that many charges that go ahead each year, but it lets people do independent searches around a person they're working with."
The legislation also requires brokerages to disclose and repay any interest accrued on money held in trust for clients' closing costs, and compels agents to obtain written consents from both buyers and sellers when taking on "dual agency" - a situation in which he or she facilitates both sides of a deal and there is potential for a conflict of interest.
As well, the new law changes the rules for ownership of a real estate brokerage, removing the requirement that a registered broker must own 51 per cent.
It also attacks the issue of mortgage fraud by establishing penalties for falsification of documents relating to a real estate transaction.
Individual agents who falsify records -- for example, creating separate sales agreements showing different prices in order to get extra cash from a lender -- or counsel anyone else to do so will face fines of up to $50,000.
Brokerages will face fines up to $200,000.
Associations representing real estate agents say they support the changes -- in fact, have lobbied for them for a quarter century. "The immediate suspensions [provision] gives the registrar more clout, and that's good for principled registrants," Tim Lee, president of the Ontario Real Estate Association, said in an interview.
"It's more protection for consumers, and we're in favour of that."
Mr. Lee said the website reporting of discipline decisions means the information will be in the public eye for much longer than in the days when decisions were reported in local newspapers.
"We feel the punishment should fit the crime, and lobbied to have the information pulled off after two years, but in the end I think it was decided it would be five years," he said.
But he added that the industry is content with that.
"It's a good deterrent for everyone to have it published."
Dorothy Mason, incoming president of the Toronto Real Estate Board, said that "for the most part, agents welcome the changes."
Anything that instills greater confidence in consumers will be advantageous to the industry, Ms. Mason said.
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