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.

 

Introducing REALTOR.ca smart leads

Smart leads

2016 was a busy year for REALTOR.ca with over 240 million visitor sessions and over 300,000 REALTOR.ca accounts created. This means REALTORS® were sent over 1.9 million email leads throughout the year.

Since February, of this year, REALTOR.ca has been making sure you get the most out of your leads with the launch of smart leads. These emails, which are generated when a visitor to your REALTOR.ca listings or profile sends you a lead, will provide you with more information than ever before.

REALTOR.ca smart leads give you more insight into your leads with the addition of the following information:

  • Real estate persona: Are they a first time buyer, residential investor, repeat buyer?
  • Where they are from: Is your lead local, from out of town or even international?
  • Do they have representation: Want to know if they are already working with a REALTOR®? Find out before you even talk to them.

REALTOR.ca smart leads provide additional information to help you build stronger, smarter connections with potential clients.

If you have any questions please contact CREA Member Support.

Note: Users have the option to choose to not share certain types of information when sending an email to a REALTOR®.

Multiple offers and pre-emptive offers:  new Registrar’s Bulletin

RECO has issued a new Registrar’s Bulletin that outlines the steps you need to take before you receive any written direction from your client about “no offers until” and then how to deal with pre-emptive (or “bully”) offers.

The main takeaways for members:

  1. You must act in strict accordance with the instructions you are given by your client, so it is very important that the written direction from the seller is detailed and very clear. As well, you must make sure the seller understands the implications of holding offers.
  1. After giving instructions to hold offers until a particular date, your seller may change his or her mind and wish to view one or more offers. If this happens, you will require new written directions from the seller to override the previous instructions.

For what happens next, the Registrar’s instructions are very clear:

First, you must change the notes to any listing for the property, to accurately reflect the new offer process.

Second, you are expected to notify, in writing, anyone who has expressed an interest in the property of the change to the offer process.  An expression of interest includes parties that have booked viewing appointments, have viewed the property, have informed the brokerage or the listing representative that they will be submitting an offer on the property, or have submitted an offer or an offer summary sheet on the property.  In addition to traditional forms of written notice, text message and email are also acceptable.” (excerpt from Registrar’s Bulletin #2017-1, February 21, 2017)

Read the full Registrar’s Bulletin here

OREA/RECO/CREA News

Do you understand the real estate forms you are using?

OREA has developed a library of video tutorials to help you understand and use OREA’s standard forms.

The tutorials are short, easy-to-follow guides designed to provide crucial information when you need it.  You can find OREA’s growing list of tutorials at any time via the webinar and tutorial archive on OREA’s website (orea.com – log in as a member, then choose “Standard Forms” from the menu on the left).  As well, OREA staff are on hand to help you navigate the tutorials – you can reach them at standardforms@orea.com.

Are you covered?

CREA has prepared a brochure outlining ManuLife Group Insurance benefits for which you may be eligible, and the brochure will be coming to your office in February! Watch for your copy and see what benefits are available to you! Don’t want to wait til then? You can also visit Manulife for more information.

CREA News – CREA Directors wanted!

CREA is looking for candidates for the 2017-2018 Board of Directors. There are four Director-at-Large positions available (three for a two-year term and one for a one-year term) and four Regional Director positions available (for British Columbia/Yukon, Manitoba, Quebec and the Atlantic Region).

Qualifications for Directors:
1. Be a REALTOR® member
2. Have been a REALTOR® member for at least five years
3. Have a minimum of three years’ experience within the last 10 years as a director of a Canadian not-for-profit corporation or a public body
4. Otherwise not be disqualified by the Canada Not-for-Profit legislation
5. In the case of a Regional Director, be licensed in that region
6. If elected, must have completed leadership courses set out in CREA policy within one year of being elected.

The deadline for submissions is January 26, 2017. The election for Directors-at-Large will take place at CREA’s Annual General Meeting in Ottawa on Monday, March 27, 2017. Regional Director elections will take place prior to the CREA AGM.

Want more information?
Check out the video at:
http://www.realtorlink.ca/content/realtorlink/crea/en_CA/about/governance/elections.html

More information about CREA and CREA Directors:
http://rahb.ca/CREA/2017/CREARecruitmentLetter2017.pdf

Apply to be part of the future of real estate in Canada!:
http://fluidsurveys.com/surveys/crea-communications/crea-director-elections-2017/?l=en