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

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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:

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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

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“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.”

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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

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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.

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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