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DO I HAVE TO BE PRESENT FOR A HOME INSPECTION?
RECO’s new education program gets top marks
RECOrdF O R T H E
PUBLISHED BY THE REAL ESTATE COUNCIL OF ONTARIO FOR REAL ESTATE PROFESSIONALS • FALL 2013
There’s no “off the record” real estate advice
2 F A L L 2 0 1 3
New continuing education program
Speaking of the education program
launch, we have received a great deal
of positive feedback from registrants, as
well as suggestions for improvements.
We have taken these suggestions
seriously and implemented changes
where appropriate. The launch was the
culmination of a great deal of work by
RECO staff to design an easy-to-use
program that features content that
is practical to registrants’ day-to-day
work. I would also like to recognize
the important role registrants played,
by providing valuable feedback that
informed the design of the program.
A select group of registrants also
engaged in critical pre-launch testing.
I’d like to extend my thanks to both
staff and registrants for their efforts.
We want to hear from you We’ll be turning to registrants again
soon to gather feedback on how we
can improve. This fall RECO will be
conducting a registrant survey to
determine your satisfaction with
RECO’s services, publications and more.
Watch your inbox for a message from
InfoFeedback, which will conduct the
survey on our behalf. Filling out the
survey is your opportunity to tell us
how we’re doing. It only takes a
few minutes and it provides us with
essential feedback on how we can
make RECO better for you.
Changes to RECO’s by-laws You should also keep an eye out for
details on upcoming changes to RECO’s
by-laws. The changes are mandatory
under the Federal government’s new
Canada Not-for-profit Corporations
Act. While the revisions will be
technical in nature, their approval at
the 2014 Annual General Meeting is
essential so that we can meet the
compliance deadline of October 2014.
RECO is committed to keeping you
informed about these changes, so stay
tuned for more info.
I am thankful to be able to serve as
RECO’s Chair during a period when
we are moving the real estate
industry forward professionally and
technologically. I encourage you to
read this edition of For the RECOrd
thoroughly to learn more about our
initiatives and inform yourselves
about emerging issues.
By Glenda Brindle
MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS
We think of summer as a time to relax and recharge, but for
RECO it’s been a summer of hard work and important new
initiatives. In fact, in terms of phone inquiries it was our busiest
summer ever. In July and August, RECO staff answered more
than 31,000 calls regarding insurance, education and general
inquiries. With the launch of RECO’s new mandatory continuing
education program and our insurance renewal season falling
in the same period, it was a real test of RECO’s resources. I’m
proud to report that we were up to the task.
Over the years, RECO has received
complaints about property damage,
theft and even personal injury
sustained when, contrary to a seller’s
expectations, non-registrants were
given access to the property without a
real estate professional in attendance.
While there is no section in the Real
Estate and Business Brokers Act, 2002
(REBBA 2002) that specifically requires
a registrant to be in attendance, RECO’s
Discipline Committee has made it clear
that it is unacceptable for a home
inspection to take place without a
registrant present unless there is written
consent from the seller. In addition,
many local real estate boards have a
rule to address these situations. For
example, the Toronto Real Estate Board
has a rule that requires the buyer’s
representative to be, “in continuous
attendance during any showing of the
property, buyer visits or inspections
necessary to fulfill conditions.”
Registrants have an obligation to
protect a client’s best interests under
the Code of Ethics. As such, any time
a non-registrant requires access to the
property in the course of completing
a trade RECO recommends that you
obtain clear written confirmation from
your client about whether you are to
be present. This applies whether you’re
representing the buyer or the seller.
“Given your obligation under the Code
of Ethics to promote and protect your
client’s best interests, it’s a good idea
to discuss and document whether you
will be present during home inspections
and the like,” says RECO’s Registrar,
Joseph Richer. “If something does go
wrong, a written record confirming
the arrangement demonstrates your
diligence in seeking direction from
your client. An acknowledged email
would suffice.”
Consider clarifying the arrangement
with your client while fulfilling the
obligation to identify the services that
will be provided, as required under
REBBA 2002. Doing so will help avoid
misunderstandings and help manage
expectations.
Once an offer is made on a property, various professionals will probably require access before
the transaction is finalized. Regardless of whether it’s a home inspector, appraiser, engineer or a
contractor, it’s in your best interest to clarify with your client (whether it be a buyer or seller) if
you will or will not be present for those visits.
Obtain written confirmation before third-party entry
HOME INSPECTIONS:
3 F A L L 2 0 1 3
4 F A L L 2 0 1 3
Whether you’re providing real estate
guidance in your brokerage office or at
a backyard barbecue, it’s important to
remember that as a real estate
professional you’re still held to the
same standards.
“When it comes to helping with a
real estate trade, nothing you do is off
the record” says RECO Registrar
Joseph Richer. “No matter what the
circumstances are, the rules still apply.”
All advice and guidance provided
by registrants must abide by the
requirements of the Real Estate and
Business Brokers Act, 2002 (REBBA
2002). This is true even if you’re not
being paid for your services.
For example, what if your friend has
decided to sell his home on his own but
would like your help in putting together
a listing, including measuring the rooms
and providing a description of the
property? You are still obligated to
abide by REBBA 2002 in this situation,
despite not being the seller’s
representative.
As a registered real estate professional,
the general public sees you as an expert
in your field and may act upon any
advice, guidance or tips you provide
about buying or selling a home.
If a doctor performs a medical
procedure outside of the hospital or
clinic where they work, or a lawyer
offers pro bono legal advice outside of
their firm, they are still subject to
regulatory requirements. The same is
true in the case of the real estate sector.
Any guidance you provide, even in an
informal setting or relationship, must
meet the same level of diligence as that
you would provide to a customer or
client. Your obligations as a professional
never sleep.
For more information about your
obligations under REBBA 2002, view
RECO’s library of Registrar’s Bulletins
available at www.reco.on.ca > Industry
Professional > Registration > Registrar’s
Bulletins.
WHEN YOU PROVIDE REAL ESTATE HELP IT’S ALWAYS ON THE RECORD
5 F A L L 2 0 1 3
“The comments we’ve received have been extremely helpful,” says RECO Registrar Joseph Richer. “Registrants’
suggestions have helped us find ways to enhance navigation and select topics to develop into new courses.”
After they complete a course, registrants can answer a survey. The results to date have been very encouraging:
• 93% agreed or strongly agreed that the course content was interesting and easy to follow
• 96% agreed or strongly agreed that the course content was relevant to their real estate practice
• 95% agreed or strongly agreed that they enjoyed the flexibility and convenience of online learning
In comments provided with the survey, registrants have recognized the advantages of online learning and praised
the quality of the course content. Here’s what they told us.
RECO’S CONTINUING EDUCATION PROGRAM GETS TOP MARKS FROM REGISTRANTSSince RECO’s new mandatory continuing education program launched on August 1, over 5,600 registrants have registered for the program, and many of them have provided valuable feedback.
For more information on the new mandatory continuing education program, visit RECO’s website (www.reco.on.ca).
To register for the program, logon to MyWeb (https://myweb.reco.on.ca).
“Very relevant, practical
and current. For example, the
inclusion of advertising using Internet
technology (LinkedIn, Facebook,
etc.) was very interesting
and reassuring.”
“Easy pace. Able to exit and
rejoin course at will. No need to
travel to a course venue and commit
a whole day to the course. This is
the first on-line course I have
ever completed.”
“The explanations and
practical examples given are
very helpful to understand
the whole text.”
“Visually it
was strong, it was very
interactive and well
laid out.”
“The scenarios were helpful
so that I could relate them
to my own real estate
experiences.”
6 F A L L 2 0 1 3
When the time comes to sell your own
property it may be tempting to handle
the transaction yourself. After all, as a
real estate professional you have the
knowledge and skills to make it
happen.
The Real Estate and Business Brokers
Act, 2002 (REBBA 2002) permits this
arrangement as long as you promptly
and properly disclose in writing any
interest you, or any person related to
you, has in the property. The interest in
question may be direct (for example, if
you or a relative are the buyer or seller)
or indirect (for example, you hold a
mortgage on the property or the buyer
or seller is a corporation for which you
or a relative are a shareholder).
However, completing the transaction
yourself carries additional risks because
the errors and omissions coverage
under RECO’s insurance program may
not cover you for all activities during
the trade.
As the name suggests, errors and
omissions coverage protects you in
the event that a client makes a claim
against you due to a mistake or
negligent action committed in the
course of your professional services.
While each claim is evaluated on its
own merits, the insurance is not
intended to cover liability arising from
the role of a seller. Therefore, acting
as both the salesperson and seller can
affect the degree to which the policy
can respond, if at all.
One of the most common causes
of loss under errors and omissions
coverage is a failure to disclose facts
considered material to the purchase
and sale. REBBA 2002 (section 32)
requires “full disclosure of all facts
within the registrant’s knowledge that
affect or will affect the value of the
real estate.” If you’re selling your own
property, you may be held to a higher
disclosure standard than a registrant
selling someone else’s property.
The bottom line is that while REBBA
2002 allows you to act as your own real
estate professional, you may be held to
a higher standard by the courts in the
event of a claim.
“There are definite advantages to
keeping the roles of registrant and
buyer or seller separate,” says RECO
Registrar, Joseph Richer. “Insurance is
there for peace of mind. Ask yourself
if it’s worth potentially compromising
that coverage.”
Selling your own property:
KNOW THE RISKS
7 F A L L 2 0 1 3
As is usually the case, activity peaked during the week
leading up to the payment deadline when more than 23,000
payments were received and processed. That’s nearly 38
per cent of all renewals processed over the course of five
business days.
More registrants (78 per cent, compared to 72 per cent
last year) opted for the convenience of completing
their insurance renewals online through MyWeb
(https://myweb.reco.on.ca), RECO’s exclusive web
portal for registrants.
Although the majority of insurance renewals were completed
online, RECO still experienced a high volume of calls during
the insurance renewal period. We thank everyone for their
patience during this busy time.
RECO’s insurance program continues to benefit both
registrants and consumers in Ontario, by offering broad
protection at a competitive price. For the 2013-2014 policy
period, the program premium and costs are $1.09 per day.
The program is unique in offering consumer deposit and
commission protection. These insurance features are not
offered in any other Canadian jurisdiction.
INSURANCERENEWAL UPDATE
RECO’s insurance department was buzzing with activity throughout the summer, collecting renewal payments from over 61,000 registrants. That’s about 3,000 more transactions than last year due to the increase in the number of registrants.
8 F A L L 2 0 1 3
True professionalism requires the
consistent application of sound
judgment. Knowledge and skill might
get you a long way in your business,
but if you aren’t able to routinely
exercise good judgment, you won’t
be recognized as a true professional.
Your knowledge and skill are a
reflection of your education and
training. Your judgment is a reflection
of your character and experience.
Professional judgment is about doing
things the right way, even when that
means doing them the hard way. The
true professional recognizes that the
right way exists for a reason – typically
to reduce risk and better protect
the client or themselves. While the
perceived risk of a shortcut may appear
small, a professional recognizes that
they can’t control everything, and even
a small lapse in judgment can create
major problems.
Doing things right may take longer
and require more effort, but by
exercising good judgment you’ll
reap great rewards.
ProfessionalismWhen the right way is the hard way
Professionalism is a hot topic in Ontario’s real estate industry. We all know that a high level of professionalism among
registrants is critical for maintaining consumer confidence in our industry.
But what does it mean to be a professional? There’s more to it than just knowing the rules in REBBA 2002 and
following them.
To shed light on the issue, RECO has produced two videos featuring Chair Glenda Brindle and Director Keith Tarswell
that discuss elements of professionalism in an interesting way, along with some cool animation.
The videos, which cover professional courtesy and record keeping, are available now. To watch them, visit the
“Registration” section of RECO’s website or RECO’s YouTube channel at youtube.com/RECOhelps.
Are You A Professional?
Real Estate Council of Ontario 3300 Bloor Street West Suite 1200, West Tower Toronto, Ontario M8X 2X2 Tel: 416-207-4800 Toll-Free: 1-800-245-6910 Fax: 416-207-4820
PM #40041338
Disclaimer: While RECO makes every effort to ensure that the information in this publication is current and accurate, RECO does not warrant or guarantee that it will be free of errors. The information contained in this publication is not intended to cover all situations. It is general information only and users/readers are encouraged to seek their own independent advice for particular fact situations.
Do you have any comments or inquires about For the RECOrd newsletter? Please send them to: communications@reco.on.ca
RECO is proud to announce that Dave
Tredrea has received the prestigious
Investigative Excellence Award from the
Council on Licensure, Enforcement and
Regulation (CLEAR) for his investigative
work. Dave’s exceptional efforts have
done a great deal to protect the
integrity of real estate transactions in
Ontario. Dave also has an impressive
level of expertise, with more than 30
years of experience working on criminal
investigations for the Toronto Police
Service, including the major crime unit
and drug enforcement squad.
“Dave and our other investigators are
at the front line of RECO’s efforts to
protect the public interest and enhance
consumer confidence in the real estate
profession,” says Joseph Richer, RECO’s
Registrar. “The vast majority of real
estate professionals take pride in
providing quality services to home
buyers and sellers, but when issues
arise they can count on investigators
like Dave to get to the bottom of
the matter.”
RECO investigator wins prestigious award
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