OREA Standard Forms Update

The 2018 OREA forms are now posted on the OREA website, as well as the document “OREA 2018 Standard Forms and Clauses Summary of Revisions” Your OREA login credentials will be required to access these links.

The three-part OREA Form 200 Listing Agreement: Seller Representation Agreement Authority to Offer for Sale will be available for sale in the Realty Shoppe early in the new year. Contact the Shoppe at realtyshoppe@rahb.ca or 905-529-5979 to place your order.

We will let you know when the 2018 OREA form updates are available on WEBForms™.

If you are interested in attending an in-class session about what forms have been updated and what’s new, check out the RAHB education calendar for the upcoming session: “2018 Forms & Clause Revisions Update”.

CREA’s take on the new National Housing Strategy

The federal government released Canada’s first ever National Housing Strategy (NHS). The strategy is a 10-year, $40-billion plan focused on giving more Canadians a place to call home.

The Canadian Real Estate Association (CREA) was pleased to participate in the consultations and provided input through a submission in 2016. The submission emphasized the importance of maintaining a complete view of the housing spectrum, which includes keeping homeownership as an affordable and accessible housing option for all Canadians.

The goal of the NHS is to ensure Canadians have access to housing that meets their needs and is affordable.

Over the next 10 years, the government will focus on the following aspects:

Housing Rights Are Human Rights—The federal government intends to take steps to ensure the right of every Canadian to access adequate housing through the creation of new programs, such as the Federal Housing Advocate and a National Housing Counsel.

National Housing Co-Investment Fund—$15.9 billion commitment to create 60,000 new units of housing and repair up to 240,000 existing social housing units.

Canada Community Housing Initiative—$4.3 billion to support provinces and territories to protect and build a sustainable community-based housing sector.

National Housing Benefit—$4 billion to support struggling and low-income households who can’t make ends meet, in both social and private market housing.

Federal-Provincial/Territorial Housing Partnership—An additional $16.1 billion in federal investment to provincial and territorial housing programs (cost-matching programs).

Improving Homeownership Options for Canadians—Through government-backed mortgage loan insurance and better detection and prevention of mortgage fraud.

Evidence-Based Housing: Research, Data and Modelling—$241 million for housing research and data, to ensure better housing information is available to all levels of governments to make educated, research-evidence based data-driven housing policy decisions.

CREA applauds the government for recognizing that there are housing challenges and needs across the entire housing spectrum. However, CREA is disappointed that housing affordability for all Canadians was not adequately addressed and will continue to push the government to recognize that affordability challenges exist for more than just lower income Canadians.

OREA News: Provincial Development Approval Roundtable Action Plan

OREA has been taking part in a provincial roundtable convened as a result of the Ontario Fair Housing Plan. The roundtable’s goal is to produce an action plan to address the artificial barriers holding back housing supply.

OREA’s specific recommendations around

  • tying infrastructure investment to better zoning by municipalities for more housing;
  • cutting red tape for a more streamlined development approvals process; and
  • a commitment for home development intensification along transportation corridors

were all incorporated into the Province’s action plan, which will streamline the residential development approval process and bring needed housing to market more quickly and efficiently.

Learn more about the Development Approval Roundtable Action Plan at http://www.mah.gov.on.ca/Page16623.aspx%23Action%20items.

When it comes to legal documents, consistency is key

Question: I just saw a listing where the Co-operating Brokerage commission has a condition reducing the commission paid if a buyer is shown the listing by the listing salesperson, but an offer is brought by another REALTOR®. Is this ok?

Answer:  Yes, this is perfectly acceptable, provided the condition in the Remarks section of the listing is the same as the commission on the Listing Agreement, which are both signed by the Seller.

Conditions to the Co-operating Brokerage commission can’t be added to the Remarks section of the Property Information Form, or to an additional Schedule, if they are different than what is on the Listing Agreement. By ensuring that the commission to the Co-Operating Brokerage is the same on the Listing Agreement, Property Information Form, any Schedule to the Listing Agreement and in the Remarks section, you will be complying with Sections 38 and 39 of the RECO Code of Ethics.

Have Your Say: Modernizing REBBA 2002

OREA REBBA Reform

Did you know that OREA is leading the charge to modernize REBBA 2002, and they want to hear from you?

The first phase of the review of REBBA 2002 addressed the Province’s interest in banning double-ending real estate transaction. The Ontario Real Estate Association sent the message to Queen’s Park that REALTORS® are interested in higher standards in the real estate profession and that a complete ban on double-ending would not be productive. OREA’s submission was prepared after consultation with real estate boards and associations across Ontario (RAHB was part of the consultation). Watch for updates on how this plays out legislatively this fall.

In Phase 2, the emphasis will be on re-writing REBBA, and OREA is asking you for your input. This is going to be a complete overhaul of REBBA 2001, and everything is on the table. This is the best chance for you, RAHB and OREA to play a significant role in writing the next, better version of REBBA.

How? Over the next few months, OREA will be posting on its website, REBBAReform.ca, a series of white papers with a number of proposals for what changes should be made to REBBA. You can download the complete white paper, or just read the proposals from it, then provide your feedback directly to OREA. It’s simple, it’s fast, and you’ll keep informed about what is happening.

OREA’s white papers will cover:

August – Enforcement (already posted and ready for your comments!)

September – Continuing Education

October – Entrance Education

November – Code of Ethics

 

Check out the website today, and have your say in the future of real estate!

Failure to disclose multiple representation leads to major fine

This article was originally published by RECO on January 27, 2017

Multiple representation is garnering media attention, and a disciplinary decision from last year emphasizes the consequences of mishandling the disclosure process.

All registrants should know that full disclosure is required when a brokerage represents two parties for the same trade in real estate (including when two different salespeople from the same brokerage are involved), and that disclosure is also required for any commission reduction agreement.

In an April 2015 hearing considering the conduct of Zahra Shaker-Shariat-Panahi (also known as Farah Shaker-Shariat-Panahi at that time, now registered as Zahra Panahi, also known as Farah Panahi), the discipline panel focused heavily on the close relationship between non-disclosure of multiple representation and non-disclosure of a reduced commission agreement.

“The disclosure of multiple representation on the part of a listing salesperson could easily raise the issue of a collateral commission agreement, something which other registrants and would-be buyers would have a clear interest in understanding and considering in making any offers,” it noted.

In the hearing it was revealed that:

  • Panahi failed to inform all the participants to the trade that she was the salesperson representing both a potential buyer and the seller.
  • She failed to disclose the terms of the reduced commission agreement to not only other buyers and their brokerages, but her own brokerage as well.

This is important to note because registrants can only trade on behalf of the brokerage that employs them. For this reason, registrants must do their part to ensure the brokerage conducts its affairs ethically on all levels. Panahi should have informed her brokerage of the details of the commission agreement to ensure it could comply with its own disclosure requirements.

The discipline panel described Panahi’s conduct as “disgraceful, dishonourable, and unprofessional”. Failure to disclose multiple representation and her commission agreement created an “effective monopoly over information,” which led to an “uneven playing field” over the trade of the property. As a result, Panahi was ordered to pay a $15,000 fine, and to complete an educational course on Ethics and Business Practice.

The panel concluded that Panahi breached the following sections of the Code of Ethics:

Brokers and salespersons

2. (1) A broker or salesperson shall not do or omit to do anything that causes the brokerage that employs the broker or salesperson to contravene this Regulation (With reference in this case to s.25 of the Code of Ethics set out below).

Agreements relating to commission

25. (1) If a brokerage has a seller as a client and an agreement between the brokerage and the seller contains terms that relate to a commission or other remuneration and that may affect whether an offer to buy is accepted, the brokerage shall disclose the existence of and the details of those terms to any person who makes a written offer to buy, at the earliest practicable opportunity and before any offer is accepted.

(2) Subsection (1) applies, with necessary modifications, to a brokerage that has a seller as a customer, if the brokerage and the seller have an agreement that provides for the brokerage to receive written offers to buy.

Fairness, honesty, etc.

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

Best interests

4. A registrant shall promote and protect the best interests of the registrant’s clients.

Conscientious and competent service, etc.

5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services.

Nature of relationship

17. If a registrant represents or provides services to more than one buyer or seller in respect of the same trade in real estate, the registrant shall, in writing, at the earliest practicable opportunity and before any offer is made, inform all buyers and sellers involved in that trade of the nature of the registrant’s relationship to each buyer and seller.

Inaccurate representations

37. (1) A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate.

Error, misrepresentation, fraud, etc.

38. A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate.

Unprofessional conduct, etc.

39. A registrant shall not, in the course of trading in real estate, engage in any act or omission that, having regard to all of the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional or unbecoming a registrant.

 


This article was reprinted with the permission of RECO.

New FINTRAC requirements soon in effect

New FINTRAC requirements that were announced in 2016 are just now coming into effect for REALTORS® on various dates starting June 17, 2017.

These changes will affect you in four ways:

1) The way you identify individuals has been improved to add more flexibility. There are three methods for identification:

  • Using a single piece of government-issued photo identification
  • Verifying the client’s name, date of birth and address match information obtained from a Canadian credit bureau that has been in existence for at least three years
  • Using two original, valid and current documents or information from independent and reliable sources, such as utility bills or bank statements

2) Whenever your brokerage uses a mandatory to identify a client on your behalf, you will now have to keep more detailed records of when you received identification information from the mandatary. You will also need to review the information to make sure nothing is missing.

3) The regulations expand on existing obligations to keep a record when you use reasonable measures to satisfy certain obligations under the law. The reasonable measure record obligations are reflected in:

  • New sections A.4 and B.1 in the Individual Identification Information Record
  • New sections A.3 and B.1 in the Corporation/ Entity Identification Information Record
  • New section E of the Receipt of Funds Record (which has also been reorganized to reflect additional FINTRAC guidance)
  • New records related to large cash transactions and suspicious transactions

4) Clients who have been identified by your brokerage in the past do not need to be identified again if you or your Broker of Record/ Manager have no doubts about the information you obtained previously.

This is only a very brief summary of the changes taking effect in June, 2017. To read the details and get the information you need about changes to forms and what it all means for you, go to the CREA site on REALTOR Link® and check out the new information in the Compliance Centre. [REALTOR Link > CREA > Resources and Compliance > Compliance Resources > Money Laundering (FINTRAC)].

Once you are on the FINTRAC page, be sure you check out the links to helpful documents near the bottom of the page – all the material has been updated. The FAQ document may be particularly helpful.

All CREA forms have been updated to reflect your new obligations under FINTRAC. Revised forms are now available on WEBForms®.

(Note: you may use your old forms until June 17, 2017. After that time, only the revised forms will satisfy your obligations.)


Thank You to Our Sponsor:

Canadian home sales drop in April

According to statistics released by The Canadian Real Estate Association (CREA), national home sales declined in April 2017.
 Highlights:
  • National home sales fell 1.7% from March to April.
  • Actual (not seasonally adjusted) activity in April was down 7.5% from a year earlier.
  • The number of newly listed homes jumped 10% from March to April.
  • The MLS® Home Price Index (HPI) was up 19.8% year-over-year (y-o-y) in April 2017.
  • The national average sale price rose 10.4% y-o-y in April.
Home sales over Canadian MLS® Systems fell by 1.7% in April 2017 from the all-time record set in March.
Read the complete news release.

CREA News – New FINTRAC requirements soon in effect

New FINTRAC requirements that were announced in 2016 are just now coming into effect for REALTORS® on various dates starting June 17, 2017.

 

These changes will affect you in four ways:

1.The way you identify individuals has been improved to add more flexibility.

There are three methods for identification:

  • Using a single piece of government-issued photo identification
  • Verifying that the client’s name, date of birth and address match information obtained from a Canadian credit bureau that has been in existence for at least three year
  • Using two original, valid and current documents or information from independent and reliable sources, such as utility bills or bank statements

2. Whenever your brokerage uses a mandatary to identify a client on your behalf, you will now have to keep more detailed records of when you received identification information from the mandatary. You will also need to review the information to make sure nothing is missing.

3. The regulations expand on existing obligations to keep a record when you use reasonable measures to satisfy certain obligations under the law. The reasonable measure record obligations are reflected in:

  • New sections A.4 and B.1 in the Individual Identification Information Record
  • New sections A.3 and B.1 in the Corporation/Entity Identification Information Record
  • New section E of the Receipt of Funds Record (which has also been reorganized to reflect additional FINTRAC guidance)
  • New records related to large cash transactions and suspicious transactions

4. Clients who have been identified by your brokerage in the past do not need to be identified again if you or your Broker of Record/Manager have no doubts about the information you obtained previously.

 

This is only a very brief summary of the changes taking effect in June, 2017. To read the details and get the information you need about changes to forms and what it all means for you, go to the CREA site on REALTOR Link® and check out the new information in the Compliance Centre. [REALTOR Link > CREA > Resources and Compliance > Compliance Resources > Money Laundering (FINTRAC)].

 

Once you are on the FINTRAC page, be sure you check out the links to helpful documents near the bottom of the page – all the material has been updated. The FAQ document may be particularly helpful.

 

____________________________________________________________________________________
All CREA forms have been updated to reflect your new obligations under FINTRAC.  Revised forms are now available on WEBForms®.
(Note:  you may use your old forms until June 17, 2017. After that time, only the revised forms will satisfy your obligations.)

Four advertising shortcuts that lead to consumer complaints

RECO often gets complaints from consumers about advertisements for the home they have bought or sold. Here are four advertising issues that often upset buyers and sellers. Each one could be a breach of the Code of Ethics if you don’t take proper steps and obtain the necessary consent.

 

  1. Their listing shows up where they didn’t expect it

When brokerages share data, listings often end up captured and advertised by another brokerage through a shared advertising agreement. This can catch consumers by surprise if this isn’t how they thought the brokerage would market their home. If the listing will appear across multiple sites, make sure the seller is aware and they’re okay with it. Fully explain the implications of advertising or promotional clauses in listing agreements, and keep in mind sections 3, 4, and 5 of the Code of Ethics.

 

  1. Ads that include images of the home they just bought

Before the transaction is completed, you only need the seller’s written consent to advertise the property. However, after the deal has closed, the buyer’s consent in writing is also required, even if you’re only placing a simple ad that shows the property as sold. See section 36 (8) of the Code of Ethics.

 

  1. Ads that contain info about the buyer or seller

Even if the owner of the property has consented to advertising their property, they may not want any information about themselves to be included. If you want to include any information about either party of the transaction, you must get written consent from that party. See section 36 (7) of the Code of Ethics.

 

  1. Ads that contain info about the transaction

If your ad will include pricing information, or any other aspects of the deal, you need to obtain written consent from both parties. Even if you’re only advertising that the property sold for over asking, that’s private information that requires their permission. See section 36 (9) of the Code of Ethics.

 

REMEMBER TO DEAL WITH THE OTHER PARTY VIA THEIR REPRESENTATIVE

When obtaining consent from the other party, it’s important to communicate with them via their representative. For example, if you are representing the seller, you must obtain consent from the buyer via their representative, unless the buyer’s brokerage has given you written permission to talk to the buyer directly. See section 7 (1) of the Code of Ethics.

 


This article was originally published by RECO on February 28, 2017. Reprinted with the permission of RECO.